Krugman has shown, here and there, that the introduction of the Euro has fundamentally changed the cost structure in core and periphery Europe and leading to divergence in real wage post-crisis. Therefore the Euro crisis is really a classic low-rate-to-rise-of-demand-to-bubble-burst problem:
Daniel Gros here is following the same path and has also concluded that the problem is not so much a competitiveness issue, but largely demand:
The real problem at present is that a debt overhang in GIP(S) has created financial market instability. In this sense Chancellor Merkel has been right to observe that we have a ‘debt crisis’ not a ‘euro crisis’. But the appropriate corollary should be that we should fix the debt crisis, not add another layer of policy coordination.
Yes, debt is a problem but it happens because of the demand shock. By merely addressing the debt through austerity measures would only depress the economy even more, and this course of action would, in turns, not reduce the debt at all. Euro crisis is a “euro crisis" because the Euro zone and the European institutions lack the ability to produce a coherent and sensible policy to get the periphery out of depression; rather they chose to impose economic punishment-austere deflation, on the periphery while ignoring the root of the problem.