Austerity is also supposed to reduce debt. In fact, that's the whole point of it. Yet it didn't do it in the REBLLs and it didn't do it in the PIIGS. While all of the REBLLs had extremely low levels of debt—below 20 percent of GDP—going into the crisis, and had the advantage post-Vienna agreement of a sovereign bond market structure populated by patient (local or troika-tied foreign) investors who relieved bond market pressures, today they all have, with the exception of Estonia, more debt now than when they started, in some cases dramatically so. By comparison, imagine what would have happened if already high Greek or Italian debt levels were multiplied by four, as was Latvia's debt when it rocketed from 10.7 percent of GDP in 2007 to 42 percent in 2012. Indeed, the REBLLs will be saddled with much higher debt levels for a long time because of their austerity. Far from blowing up the Debt Star, they have built themselves a bigger one.

Mark Blyth, Austerity, loc. 608