After weeks of relative calm, Europe’s debt crisis is reawakening, as investors fret over a growing pushback in the region against the tough austerity prescribed to cure its fiscal ills.

Europe’s crisis had finally seemed to ebb in late January, with confidence in the region’s ability to put its fiscal house in order and aid its troubled banks easing the turbulence that rocked world markets from London to Hong Kong to New York for nearly 2 1/2 years.

But Europe’s woes are starting to come back. Immediate attention is focused on troubled Spain, where still-ailing banks and a nose-diving economy have raised the prospects of the biggest bailout of the crisis to date.

Yet deepening economic downturns in Spain and Italy are also adding fuel to a growing backlash against the German-backed remedy for the crisis: massive cuts in government spending aimed at reducing deficits that ballooned during the credit bubble of the past decade. Fresh admissions by Spain and Italy that the cuts are driving their economies deeper into the ground and forcing them to slow the pace of austerity are unnerving investors, who sent borrowing costs for both nations surging back toward worrying levels Friday amid concern that they may be reneging on pledges to slash their deficits.

At the same time, just as in the United States, the question of austerity vs. growth has emerged as a major election-year debate in Europe, where myriad nations are years ahead of Washington in making cuts and feeling the pain as a result. Though fiscally conservative Germany — the euro zone’s powerhouse — sees austerity as the best and only solution to the crisis, a growing number of politicians and economists argue that it has been too much, too soon, and is only worsening the region’s prospects by deepening recessions in a host of European countries.

Those critics now include the Washington-based International Monetary Fund, which warned this past week that Spain and other European nations may be slashing budgets too quickly.

In a key test, the French go to the polls Sunday with the Socialist candidate, Francois Hollande, neck and neck with incumbent President Nicolas Sarkozy. Hollande — seen as the favorite in a likely second-round vote on May 6 — has vowed to renegotiate the European fiscal treaty struck in December and aimed at limiting government spending across the euro zone. He has also called for a new round of measures aimed at spurring growth.

Hollande’s platform appears to be resonating with French voters, even as it generates deep concern in Berlin, where Chancellor Angela Merkel has openly endorsed Sarkozy. Ahead of the vote, investors have sent France’s borrowing costs upward, a fact Sarkozy has quickly jumped on.

“If we start hiring civil servants, if we start spending again, it’s not a risk that interest rates will rise, it’s a certainty,” Sarkozy said this past week. “It would immediately set off a crisis of confidence."

Meanwhile, the May 6 elections in near-bankrupt Greece could see the rise of a fragile government that may find it hard to enact the deep cuts promised as part of its bailout deal with the European Union and IMF. With signs that smaller Greek parties opposed to austerity may win new seats in parliament, Athens could find itself in a new confrontation with its lenders, leaving it once again on the cusp of becoming the first country to exit the euro — a move that could unsettle global currency and bond markets.

‘Time seems to be running out’

Taken together, analysts say, the uncertainty over Europe’s direction is threatening to reignite the turbulence calmed last year as European governments issued tighter fiscal pledges. The easing of the crisis was dramatically aided by the European Central Bank’s move to extend cheap, long-term loans to troubled banks in the region, a measure analysts say was badly needed but perhaps not enough.

“We now see the ECB’s move was a painkiller that is now losing its impact,” said Juergen Michels, chief euro-zone economist at Citigroup in London. “Instead, it only seems to have bought Europe time, and that time seems to be running out. We are in danger of heading back to crisis mode.”

Front and center is Spain, the euro zone’s fourth-largest economy, which last year was seen as more successful than Italy in addressing its budget woes. Though two successful government bond auctions this past week served to keep a lid on panic, concern is rising that the economic outlook there is sharply worsening as severe budget cuts and a continuing collapse in housing prices deepen a recession and saddle the balance sheets of Spanish banks with more bad loans.

Last month, Spain conceded that it will well overshoot its spending targets for this year, touching off a spike in borrowing costs that on Friday topped the 6 percent mark — a precariously high level but not yet above the 7 percent to 8 percent range viewed by economists as wholly unsustainable.

Spain — which, along with E.U. officials, has denied the need for a bailout — has maintained that it will try to stick to its pledge last year to cut the deficit to 3 percent. But in the current economic climate, economists say, that goal is not only impossible but would also be detrimental to attempt, given that tens of billions in additional cuts could severely damage a nation already enduring a 23.6 percent unemployment rate.

“If they push to cut more, you could be looking at unemployment near 30 percent and a whole decade before it can find the path to recovery,” said Raj Badiani, Europe economist with IHS Global Insight in London.

Pushback in Italy

Spain’s announcement that it would not meet its budget targets was followed this past week by a similar declaration from Italy, where Prime Minister Mario Monti warned that Rome would delay plans to balance its budget until 2014. Even in countries such as the Netherlands, long considered a stalwart of good fiscal governance, officials face stiff resistance to imposing deep cuts in the middle of an economic downturn.

“Everything, everything, everything that we are doing now is aimed towards helping growth,” Monti said, ruling out further austerity measures.

The pushback from economically troubled nations is ratcheting up tensions within the euro zone, and particularly with Germany, where Merkel’s Christian Democrats have launched a pro-austerity campaign as part of a bid to win key regional elections in that nation’s most populous state, North Rhine-Westphalia, on May 13.

“We have to watch out that high interest rates on our debt don’t lead to the point where we can’t decide and shape anything anymore,” Merkel said in a campaign speech this past week, according to Bloomberg News.