In fact, it’s even worse. Since the core countries also run low inflation policies, the troubled countries only recourse, internal devaluation, forces them to run highly deflationary policies which not only kills demand, it also kills nominal growth. Even low nominal growth (let alone zero, or even negative nominal growth) automatically increases the debt burden, this is the so-called denominator effect. Debt/GDP increases where debt increases by interest payments and deficits while the austerity and internal devaluation policies keep GDP growth minimal (or even negative).