Greece is once again at the centre of an effort of the IMF and the European central bank to rescue its economy from the grip of a likely debt default and flight of capital. Unemployment, economic turmoil and political unrest including rioting in the streets of  Athens are now the preoccupations of the Greek government as it struggles to get a grip on the situation.Financial market analysts are now talking of an inevitable default and a 30 % haircut on sovereign debt bonds that the market holds. Regrettably the approach adopted by the ECB and the IMF to a further loan to bail-out the Government in order to prevent default on its bonds is very unlikely to work because it demands further politically and socially unacceptable excessive austerity from Greek citizens. The perversity of these austerity policies which do nothing to improve either the lives of citizens or improve the economy should by now be crystal clear. One does not lower unemployment or improve economic growth through austerity. Aggregate demand will simply shrink further and the capacity of the Greek economy to carry its debt load which is now in gross terms about 153 % of the GDP will be further imperilled.  When Greece entered the Euro at an exchange rate of 340.75 drachmas to the euro in 2001 its debt ratio to GDP was 103.7 %. It is now 153 %. Clearly belonging to the euro zone at this initial exchange rate has not worked to the advantage of the Greek economy. Unless the ECB changes its policies and the IMF abandons its austerity approach to rescuing troubled economies Greece would be better off leaving the euro and saving its citizens from further misery. The chart below gives the current 2011 gross debt to GDP ratio for  European countries group including euro members. It shows that every country  in the euro except for Finland has a debt to GDP ratio above the absurdly arbitrary Maastricht condition of 60 %.  Clearly despite the title (which is from the original chart and not mine) debt levels above 100 % are sustainable. Both Italy and Japan have operated with debt levels above this level for many years. Britain operated with debt levels above 160% for decades in the past(see James Macdonald, A free nation deep in debt: the financial roots of democracy,  N.Y.:Farrar, Straus and  Giroux, 2003, p. 355 and Harold Chorney, The Defict and Debt Management:An Alternative to Monetarism, Ottawa:Canadian Centre for Policy Alternatives, 1989, p.36.) and the U.S level exceeded 100 % for a period of time during and after the Second World War. It is time that Europe and the ECB and the IMF reformed their approach and recognized both economic history and economic reality.