why debtors like the IMF or the EU demand austerity measures when austerity may cause economic downturns like Greece?
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The theory behind demanding austerity is that at the end of the day whatever amount of economic activity is happening in the country, their spending is too high to be supported. That is why they ended up needing IMF help in the first place.
By forcing the government to tighten their belt and spend less they will presumably cut more useless expenditures than useful ones. While there may be some downturn in economic activity through this process business will adapt and recover.
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