Europe has embraced austerity but financial markets still worry about debt sustainability – at least in part due to slow growth that has been associated with fiscal belt-tightening. Is austerity self-defeating? Is it keeping Europeans underemployed for years and thus destroying the medium-run growth needed to pay off the debt? Or are the belt-tighteners wisely steering their nations clear of Greek-like tragedies? The questions for debate are simple: Should governments let up on austerity now that the global economy is weak but credibility on fiscal sustainability is far from granted? And under what circumstances would be wise to do so?