I think Krugman would explain it this way:
- Credit glut + common currency meant easy-to-close, large speculative lending to the "cheaper" countries in the Eurozone, leading to housing bubble
- Housing bubble brought up wages and prices, which eventually must revert
- Bubble burst: soaring unemployment, general indebtedness, no way to dig out
- Forced austerity has made things worse; not having their own currency also limits options
> To what extent did they bring this upon themselves?
I don't think that's a useful question. What would you do with the answer?
> How much of German motivation in the formation of the Eurozone was
> farsighted interest in global good as opposed to nearsighted
> self-interest?
Are those the only two choices?
> How much are Germany and France to blame for the state of Greece,
> Spain, others (PIGS?), today?
They are certainly almost entirely "to blame" for the difference between Greece three years ago and Greece today; whether they are "to blame" for Greece 2005-2008 is probably a harder question. But again: who cares about blame?
> What can be done to help the PIGS (let’s make that SPIGs) today? By
> Germany?
Again looking to Krugman, Germany could allow the richer Eurozone to experience some inflation. That might not be enough, however. The other day he said this:
--> What is the alternative? Well, in the 1930s — an era that --> modern Europe is starting to replicate in ever more faithful --> detail — the essential condition for recovery was exit from --> the gold standard. The equivalent move now would be exit from --> the euro, and restoration of national currencies. You may say --> that this is inconceivable, and it would indeed be a hugely --> disruptive event both economically and politically. But --> continuing on the present course, imposing ever-harsher --> austerity on countries that are already suffering Depression-era --> unemployment, is what’s truly inconceivable. --> --> http://www.nytimes.com/2012/04/16/opinion/krugman-europes-economic-suicide.html
/jordan