Greek Prime Minister Alexis Tsipras has negotiated a third bailout for Greece with its Eurozone partners. European leaders have pledged up to €86 billion ($96 billion) in additional aid ― up to €25 billion to recapitalize banks and the balance to prop up Athens’ finances.

What Eurozone leaders ― and in particular German Finance Wolfgang Schaeuble who was most insistent on harsh terms ― don’t get or refuse to admit is that for Greece and other troubled Mediterranean countries, austerity and marketplace reforms can’t guarantee economic recovery until Germany and its northern neighbors change their economic policies too.

To pay off debt, Greece must grow by expanding its limited export sector. Foreign receipts come mostly from shipping, petroleum refining and tourism, and trade composes a much smaller share of GDP than for other small economies.

Greece has a well educated labor force and its network of small businesses attest to a strong entrepreneurial culture but Germany and its northern neighbors pursue growth strategies premised on exports ― in particular, running trade surpluses.

Despite its rhetoric and more flexible labor laws, Germany does not play by the rules it prescribes. For example, during the financial crisis, Berlin subsidized manufacturers to keep workers on the job ― something poorer countries cannot afford to do and that biases plant location decisions in favor of Germany.

The greatest German advantage of all is the euro. It is undervalued for Germany and other northern economies and overvalued for the Greek and other Mediterranean economies. Consequently, Germany and its neighbors accomplish trade surpluses and the Mediterranean economies must endure trade deficits.

One way or another those deficits must be financed by borrowing from the north. The amount of austerity and one-sided market reforms imposed by Mr. Schauvble and his friends can change that calulus, and sooner or later either Mediterranean governments or their banks must fail. Thanks to Schauble designed austerity and reforms, Greece’s economy has contracted 25 percent, sovereign debt has soared from 130 to 180 percent of GDP, and more than €100 billion or about 35 percent of bank loans are now classified as nonperforming.

Another bailout and more austerity will only make those figures worse, and €86 billion may prove hardly be enough to prop up the banks if Greece’s economy keeps on sinking, never mind provide needed funding to keep Greece’s government going. Greece should unyoke itself of German mercantilism and dump the euro.