'Restructuring Greece Within the Euro is Illusory' {Hans-Werner Sinn interview}

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http://www.spiegel.de/international/europe/0,1518,816410,00.html

SPIEGEL ONLINE: The finance ministers of the euro zone want to approve a new bailout for Greece this Monday. Can the additional €130 billion ($172 billion) save Greece?

Sinn: No, and the politicians know it can't. They want to gain time until the next election. I think we're wasting time by doing this.

SPIEGEL ONLINE: Why?

Sinn: Because Greece's external debt is rising with every year that passes until it leaves the currency union. We're getting ever further away from solving the problem. The basic problem is that Greece isn't competitive. The cheap loans that the euro brought the country artificially raised prices and wages -- and the country has to come back down from this high level.

SPIEGEL ONLINE: So the euro countries shouldn't approve the aid?

Sinn: They should give them the money to ease their exit from the currency union. The Greek government could use the money to nationalize the country's banks and prevent the state from collapsing. The state and the banks must continue to function through all the turmoil that an exit will entail.

SPIEGEL ONLINE: This turmoil would hit the population hard.

Sinn: Yes, undeniably. But the turmoil would only be temporary, it would last one to two years perhaps. This time would have to be bridged with the financial aid from the international community. But the drachma will immediately depreciate and the situation will stabilize very quickly. After a short thunderstorm, the sun will shine again.