Krugman with an outstanding summary of the Euro history (this is why you never stop reading Krugman, regardless of how off-putting the tiresome political whining may be):
I’d put it this way: it so happened that the euro came into existence at a time when the German economy was in the doldrums. Then the euro made investors believe that southern Europe was safe, causing a huge fall in interest rates there:
This in turn led to vast inflows of capital; the flip side of these inflows was large trade deficits, and large counterpart German surpluses, which was just what the Germans needed. Everyone was happy! For a few years.
Hard to make it more succinct than that. If the Euro was born in another other era maybe it would never have worked in the first place!
Not Unreasonable 