It's a vicious cycle. Cut to get budgets back on track because you have been overspending for years and people won't bail you out if you keep overspending. But when you cut you drive people out of the country, destabilize the government and you slow/get negative growth. That then reduces what you get in revenue so you have no hope to get enough money to pay back the bailout terms and you fall further behind.
It'll be very interesting to watch these next few years. At some point, I can see the German government doing a lot of navel gazing as these countries keep missing their targets - Merkel has a good majority so far but I recall it getting more and more strained as this spiral continues.
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