How much austerity can a community take?

Riot police in Spain

Listening to the radio this morning, and hearing about the strikes against austerity that are taking place in parts of Europe today,  I was reminded about my time working with debt clients when an advisor at Citizens Advice.

Over 50 percent of our casework involved people with debt problems.  Our task was to try to help people to budget so that they could gradually clear their obligations.  At the same time we would contact their creditors to try to organise an affordable repayment scheme. This sometimes involved the company writing off part of the debt in order to receive at least some of the money owed.

It was generally accepted by experienced money advisors that a person might be able to stick to a regime of austerity for up to about 5 years. If however repayments needed to stretch beyond that period, then it was unlikely that the individual would be able to cope,  and that bankruptcy was a more realistic solution for them.

How different is the situation of a country full of individuals to that of one individual?  Places such as Greece and Portugal have signed up to austerity regimes lasting 20 to 30 years.  It is hard to believe that whole communities can be expected to manage that which we knew from experience at the CAB our debt clients could not.  How long will it be until Europe as a whole realises this and accepts the necessity of default?