According to the IMF, each "austerity euro" is having an impact of €0.9 to €1.7 in the economy - versus the €0.5 initial estimated. This is actually meaning a deeper recession than initially forecasted, generating further public spending deficits.
I am not a big supporter of some IMF measures - they actually have a very long story of wrong predictions and policies. But, this time, I think IMF might only have been naif. Because the fact is that it was probably predicting that Governments would "austerize" spending fats - while, actually, as many of them lack the political ability and courage to do it, they are mainly raising taxes (which has a stronger impact on consumption and hence on GDP). As so, I don't think that it was only a bad prediction from the IMF - I think most of the impact comes from the fact that Governments are implementing the wrong measures.
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