The Greek economy collapsed because it didn't do austerity, they have massive tax evasion, bribes and corruption are the norm and they pay inflated wages to public service workers
Why the economy in Greece is down the pan, is no one, the IMF, the EU has any faith in the politics or infrastructure of Greece, if Greece had been serious and made serious cut's, tackled Tax Evasion, then the world would off been more willing to play ball.
The whole austerity question, is like a gambler who's down, do they cut there lose's or hope to make good by putting more money on the table. In short Austerity is the least worse option, the countries more serious about Austerity have tended to retain higher credit rating's hence cheaper credit when suitable in the future.
In the 30's government's could roll out big infrastructure project's like highway's, rail, ports to boost the economy, they don't have that option now to the same extent.