At the end of 2009, along with the three major rating agencies on a global scale - Fitch, Moody's and Standard & Poor's- lowering the Greece’s sovereign credit rating, the Eurozone sovereign debt crisis brought the global economy another blockbuster. To study the relationship between government debts and economic growth in European countries, it is necessary to first understand the reason why this debt crisis occurred as well as its impact. This thesis studies the relation between the debt crisis and the economic growth on theoretical and empirical perspectives and the channels through which the debt crisis influences the economic growth. On aspect of the theoretical analysis, this thesis confirms the relationship between the debt and the economic growth presents an inverted U shape. The IS-LM-BP curve shows how the relation between debt and economic growth affects macro-economy and induces the economic imbalance. In the empirical analysis, this thesis first chooses 27 European countries as the sample to analyze the inverted U shaped relationship using fixed effect model. Secondly, the differences between Euro and non- Euro countries, developed and less developed countries are accounted for. Thirdly, the paper finds that the debt will affect economic development through two channels including labor and capital. Finally, this paper provides suggestions on policy implication.