Prior to the Euro, the Germans always ran the strictest monetary policy in Europe. They inflated the Mark to be sure, but Italy, France, Spain, etc. all inflated their currencies much, much more. The result was a constant struggle to readjust their exchange rates downward in relation to the Mark.
This only served to highlight their fiscal foolishness and caused them quite a bit of embarrassment. The Euro project was designed in large part to do away with the unflattering comparisons to the Germans and siphon away some of their economic power.
As always, the laws of economics may be ignored but not repealed. The truth is revealed in each country's bond rates and they all look bad compared to Germany. Now, they want Eurobonds to disguise this embarrassment.
They would be better off if they did let Germany set the rules. But this is Europe and chaos must reign.
The Euro was designed to remove the monetary autonomy of german competitors. Giving german exporters (the heart of the german economy) a weaker stable new currency without the exchange risk.
UK has a gigantic total debt as a share of GDP. If they were deprived of monetary auonomy or its financial sector was heavily regulated, they would be in worse shape than Ireland, Spain and Italy.
There is no doubt between the german and the british model. The german way is far superior: they´re the last true anti-keynesian nation. But the rest of the Eurozone cannot afford those german monetary and fiscal rigor. If confidence is not back in markets we are moving into a deadly spiral of recession and cuts in Europe.
They were as good as the Swiss, but after the Euro split off, the Swiss were more or less alone in trying to control inflation, but that pretty much ended with the tax "evasion" investigation in 2008 (which was nothing more than a kudgle to force the Swiss to inflate).
Keep in mind one thing: The coverage we get of this we get on this side of the pond is the most shallow imaginable. Your post implies that Germany is, today, in great shape as far as general solvency and the state of its banks. Not so. Sure, in comparison to Greece, LOL. (What more need be said?!) But Germany is today no model of fiscal conservatism. Its’ banks are just about as hosed as the others.