Betting on the specter of bankruptcy and the humiliation of the political system, some in the Greek media have portrayed the drastic measures called for by the International Monetary Fund as a kind of catharsis. Sure, Greeks are in for a really rough period but, when it comes to political economy, self-flagellation is not necessarily a synonym for absolution. The real dilemma rather is productive versus counterproductive measures and not harsh versus soft. The problem with the IMF is not the tough measures it calls for, but its Procrustean bed economic approach. The organization has often been blamed for trapping economies in continuous cycles of recession. Greece needs to replace its cracking, kleptocratic and wasteful model with one that creates growth. The old tools will not cut it. We need a fresh and effective approach to exploit the long-neglected capacity for revenue and growth. A number of smart and pragmatic proposals have been shelved for lack of the political will. The government of George Papandreou is not responsible for the fiscal bomb it inherited. But it is responsible for its slapdash and directionless approach. PASOK has not yet decided what to do with huge amounts of public property, some of which have been left to rot. It failed to reintroduce the objective criteria for a minimum payable tax. Also it has not streamlined the functioning and efficiency of the broader public sector – a move that could have boosted productivity while cutting down on resources and staff. Finally, PASOK has not introduced incentives for investments that would make use of the country’s comparative advantages. Things would be different had Papandreou taken steps in that direction. Now complying with the IMF rules is the only way to keep our heads above water. But it will not take care of the problems that require far-reaching reforms. The crisis could bring about a change in behavior and mentalities, provided there is a solid government that also acts on the basis of social justice.