The whole idea of common currency is to increase productivity and force structural changes accordingly. Instead they have only increased economic rent and destroyed production.

In Keynes' proposal for an International Clearing Union at Bretton Woods, the fixed-exchange-rate system was complemented with penalties for trade surpluses in addition to the penaties that accrue automatically to countries with trade deficits since deficits must be funded by foreign debt, which costs interest. Just like the US at Bretton Woods and China at the G20 two years ago, Germany doesn't want a transfer union, which is to say is not interested in paying for the benefit a structural net exporter obtains from a fixed-exchange-rate regime.

In addition, the focus is exclusively on government fiscal positions, with no attention being paid to the private sector since "the market will provide" and everyone believes "market discipline" "works". In reality, trade deficits must be funded by a combination of public deficit/debt and private deficit/debt, and constraining the public finances leads to debt-financed "growth" and private debt bubbles. German opinion likes to talk about the problem of "fiscal incontinence" at the heart of the sovereign debt crisis, but the "fiscal incontinence" was actually in the private sector, and this mandated by statute. The crisis became a crisis of the public sector as a result of stimulus and rescue packages to prevent the European economy from disappearing down a black hole. In fact, back at the G20 Europeans responded to American accusations that the European fiscal stimulus was too small with talk of "social safety nets" and "automatic stabilizers" which are exactly the reason why public deficits and debts soared. So it was all self-serving rhetoric after all, not a coherent policy position.

Because "market discipline" does not "provide", if structural imbalances are to be corrected this requires industrial policy, but the EU's illegal state aid rules preculde most proactive policies to steer economies off the path of least resistance (which is growth fuelled by a credit bubble).

You can have a monetary union, but not like this.

In fact, the Eurozone as a whole has low inflation, balanced external trade, and negligible foreign-denominated debt, so the entire crisis is one of internal macroeconomic imbalances. Fiscal and industrial policy coordination is a must, or one of three outcomes will follow: the crisis will repeat itself after the next business cycle; or Europe will be plunged into a protracted depression; or the Eurozone will break up.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman