The vicious circle

Greece is going bust. It needs help from the EU and the IMF to meet its debts. The help is provided subject to Greece adopting a programme of austerity. This causes the Greek economy to contract, so that it is less able to meet its debts. It needs more help from the EU and IMF which in turn demand greater austerity, with the result that its economy contracts further. Meaning, yes, more help is needed and greater austerity is imposed.

And so on and on. Is there a way out of this vicious circle? If so, it seems to have escaped the authorities ...