If the interest rate structure is "out of whack," it is a result of central bank meddling. That can be cured by stopping the creation of money and allowing the market to set rates.
holding down national debt to 3 percent of GDP by itself would not allow the less-industrialized countries to catch up to the more-industrialized ones
Government debt does not spur any "catching up." If anything, it holds them back. Any GDP growth caused by fiscal deficits is illusory and will disappear at the next recession.
The monetary unit has nothing whatsoever to do with a country's economic development. True economic growth [i.e., capital growth] can take place anywhere the government doesn't siphon it away from the private sector.
I don't expect any of this to happen, but it's certainly economically possible. The Euro, whatever the reasons for its creation (and I agree largely with yours,) is not the problem. It functions as if the Euro-zone members had fixed exchange rates and that imposes a welcome discipline on governments.
We can see, even now, how drastically Ireland, Greece, Spain, and Portugal are cutting back on government spending. It isn't enough, but it never would have happened at all with national currencies. If allowed to, the Euro would function much as a gold standard and, ultimately, all Europe could be as stable and prosperous as Germany is.
That's theory, of course, but it's solid. Shame the Europeans aren't likely to follow it.
You sure got the central bank meddling bit right. Problem is, the fallout extended way beyond the eurozone’s borders.