I think this article is interesting to read, in particular this bit:
The ECB’s latest Monthly Bulletin documents this [Private deleveraging and fiscal consolidation are restricting eurozone growth far more than remaining restrictions on credit supply.] , citing multiple indicators of improved credit availability and pricing. Nonetheless, the rate of decline in private-sector loans has accelerated over the last year – from -0.6% to -2% – and low demand is acknowledged to be the main driver of depressed credit growth. Simultaneous private deleveraging and fiscal consolidation are restricting eurozone growth far more than remaining restrictions on credit supply.
The bit in bold shows one major reason (deleveraging) why austerity (fiscal consolidation) is to totally misguided. For an analysis of this, see Richard Koo’s book and in particular his policy recommendations. ‘The world of balance sheet recession, where companies are minimizing debt, is the yin.’