Europe is tightening its belt and enforcing austerity measures in an attempt to assuage jittery investors unnerved by the fiscal problems in Greece. Some worry that the Europe’s recently adopted frugal attitude may impede the global recovery in the markets and exchange traded funds (ETFs).

Currently, only Greece, Spain, Portugal and Ireland, who collectively make up 18% of the eurozone GDP, have no choice but to heavily reduce budget deficits, reports Marcus Walker for The Wall Street Journal. The United Kingdom and Italy are cutting back slowly in an attempt to obviate possible future pressures from the markets. Core eurozone members around the big economies – Germany and France – are voicing fiscal pains and fiscal austerity, but in actuality, their budget deficits may rise this year. [Europe ETFs: More Trouble Ahead?]

The core members may begin cutting and raising taxes beginning 2011. Keynesian economists, the U.S. Treasury and the International Monetary Fund (IMF) all believe Europe’s more fiscally sound countries should maintain expenditures and the growth that comes with it. [The Upside to a Sinking Euro.]

In the meantime, the depreciation will boost exports, and a sustained 10% drop could add 0.5% to GDP for the eurozone. Though, budget cuts will reduce the E.U.’s GDP by around 1.5% in 2011. The Goldman Sachs Group (NYSE: GS) projects the eurozone economy to expand by around 2% next year.

As a result of the problems in Europe, more international country-specific ETFs are in the bargain basement, Ron Rowland for Money and Markets points out. Rowland also suggests investors should keep an eye on some of these ETFs since they’ll eventually find a bottom and represent buying opportunities. [Emerging Market Financial ETFs On Top.]