SPIEGEL: Mr. Rogoff, the euro-zone finance ministers are likely to soon provide Greece with new loans totaling €130 billion ($171 billion), with the aim of stabilizing the country for the next few years. Will that save the euro?

Rogoff: It is hardly the final word, even for Greece. The mountain of debt in Greece is simply too big and the country is not competitive. Indeed, it's going to be very difficult to keep Greece in the euro zone.

SPIEGEL: But the government has announced tough austerity measures. Pensions are being cut, wages frozen. Those kinds of measures are almost unheard of in Europe.

Rogoff: But they're still not enough. To make Greece competitive, wages would have to be halved. That is impossible to implement politically, but without a steep wage cut, the economy will continue to stagnate. Greece urgently needs the prospect of growth. It is currently experiencing its fifth consecutive year of recession. This is a failure of historic dimensions.

SPIEGEL: But surely it can't get any worse? Many economists are saying that the crisis in Greece has bottomed out and the worst is over.

Rogoff: I would be more cautious. The problem in Greece is not an ordinary recession but a full-blown financial crisis, something which countries usually take a lot longer to recover from. This kind of economic collapse goes much deeper than a normal slowdown. The longer the economy continues to shrink, the more restless the trade unions get, and the more pressure builds up on politicians to put an end to the misery.

SPIEGEL: What cure would you prescribe?