As the euro circles slowly, slowly down the drain, the conventional wisdom about who's to blame is quickly, quickly changing. Six months ago, the euro's troubles were attributed to southern Europeans, whose love of six-week vacations, retirement in late middle-age, and the other perks of the modern welfare state was not matched by a willingness to pay for them. Now the tide is running toward blaming those rigid Germans, who should have understood that Teutonic economic culture could not be forced on the rest of Europe without a very thick sugar coating.

I’m more in the second camp, myself – the profligacy model may fit Greece, though not Spain or even Italy. In any event, like many American economists, I never bought into the idea that Europe was an "optimal currency area" in which the benefits of union would exceed the costs. And there is one, not very well remembered footnote to recent history that makes Germany’s initial enthusiasm for the monetary union now seem all the more myopic.

When West Germany absorbed the collapsing nation of East Germany in 1990, it had to make a decision on the rate at which East Germany’s currency would be exchanged for the coin of the realm. The Ostmark wasn’t worth anything in particular – East German prices were so screwed up, it was almost impossible to make a rational decision. But for political reasons, West Germany allowed the conversation of most household savings and pension obligations to West German marks at the absurdly favorable rate of 1:1.

One consequence was that East Germany’s wages were, from day one, hopelessly out of line with productivity. And to prevent massive unemployment, social dislocation, and an army of easterners heading west to compete for jobs, West Germany invested trillions of marks – real money back then – in rebuilding eastern German industry, retraining its workforce and giving eastern Germans equal access to their welfare benefits.

It worked; the two Germanys are, for the most part, now one in terms of productivity and economic culture. And it would probably work eventually for the eurozone, if Germans were equally willing to pay for economic unification with all those “lazy” southerners. Indeed, the rational thing for Germans to do right now would be to bite the bullet and make the investment, since the alternative – the collapse of the euro - might well prove more expensive in economic and political terms. The question, of course, is whether this unpleasant reality will become clear to Germany’s movers and shakers before it’s too late.