After an all-night round of talks among Eurozone finance ministers, Greece was granted its second bailout, this one for €130 billion, in a package that includes recently passed austerity measures and a debt restructuring. But confidential reports distributed to the finance ministers indicate that the deal will not work and may even be counter-productive.

I don’t know how many Eurozone finance meetings have been seen as consequential, but we’ve got another one today, with the Greek bailout as the main topic. Greek leaders hope that the finance ministers will approve the bailout, after they gave final assent to austerity measures. CNBC quotes officials saying the chances are “little higher than 50-50.” What we learned going into the meeting is more evidence that the ordered cure for Greece’s ills, austerity, is causing the disease:

Greek lawmakers held up their end of the bargain by agreeing, despite mass riots in Athens, to crushing austerity measures required by the “troika” (the European Union, the IMF and the European Central Bank) in order to receive a new bailout. But the European finance ministers remain hesitant to deliver the bailout funds, claiming to be wary of what they consider past broken promises by Greece.

As I mentioned on Sunday, the Greek Parliament agreed to a bailout deal that exchanges funds from Europe for new austerity measures that will sink the economy even further. The measures effectively destroy labor law and decimate wages.

Greece has agreed to new bailout terms, with brutal austerity measures attached, but Eurozone finance ministers don’t believe the Greeks will follow through, so they’ve held up the provision of the funding.

This must be the day when everything gets sewn up into neat little packages. The Greek government has announced a deal has been reached to secure their second bailout, though one junior partner has not confirmed agreement. The head of the European Central Bank is saying a deal has been done as well.

David Ignatius offers two cheers for Mario Draghi, the head of the ECB, for giving away super-cheap money to bankers. These pundits love their banking daddies, don’t they? Ignatius does realize, however, that the real problems in Europe are beside the point of the banking debt crisis. The problem is he thinks the real problem is the lack of an enforceable fiscal union.

Yesterday, 25 of the 27 Eurozone countries signed a fiscal consolidation pact that almost immediately drew scorn from observers as inadequate and largely irrelevant to the problems of the continent, including the absence of growth stimulus policies and means to address internal trade imbalances.

After fits and starts, Greece may be on the verge of a deal on its private sector debt. Greece will apparently get the lower interest rate it wanted out of its creditors, though not all of them will participate, and the ECB is refusing to take the same haircut on the debt it holds. Meanwhile Greece is agreeing to impose even more austerity measures, to meet arbitrary debt limits, even though their economy is in depression.

After all their self-defeating austerity efforts, a few European economic policy makers are noticing that they’re having a problem with growth. The UK and other economies are falling back into recession; Greece is in a depression. But they still haven’t acknowledged they’ve got the solutions backwards.