KAL's cartoon. Just what is austerity?
Here's the Wikipedia definition. What austerity amounts to is tightening the belt. After years of living beyond the means of the tax revenue, governments raise taxes and cut spending to pay back the debt that they have accumulated. The problem is, the government typically has to make these changes to taxes and spending during a recession. The measures aren't anti-cyclical but pro-cyclical.
At some time a country has to pay for its borrowing. This is one of the debates about how bears the burden of the debt: future or current generation. In the case of Greece, I believe both will unless the debt is forgiven or Greece defaults.
Recently, Spain has announced austerity programs amid protests. In Spain the unemployment is somewhere are 22%. If the labor force can't generate enough tax revenue to support the government, what is the government supposed to do? Here's one answer. I think another answer is to elect a socialist government like France.