Sinn betrays a very defective knowledge of American debt history (the purported moral hazard created by Alexander Hamilton is nonsense) and thus too glibly rejects debt mutualization (Eurobonds) as part of a solution to the Euro's problems. See my blog http://silverberg-on-meltdown-economics.blogspot.co.at/2013/05/usa-vs-eurozone-how-many-differences.html.
Paul de Grauwe has just restated the case for a European Hamilton Moment in these (web)pages: http://www.project-syndicate.org/commentary/the-debt-pooling-scheme-that-the-eurozone-needs-by-paul-de-grauwe.
The distinction between foreign and domestic debt is indeed crucial for financial sustainability.
However, I'm surprised Gros is still repeating the Reinhart-Rogoff canard about a 90% debt ratio threshold. Even without their egregious mistakes, this was always statistical nonsense (see my blog http://silverberg-on-meltdown-economics.blogspot.co.at/2013/04/the-reinhart-rogoff-dragon-revisited.html).
Maybe Germany could make the first step on the road to recovery by issuing a "Merkel Moratorium" suspending international debt payments, analogous to the Hoover Moratorium of 1931 that was the first step out of the Great Depression (followed by abandonment of the Gold Standard and rearmament Keynesianism). This suspended not only Germany's WWI reparations but also the private American Dawes Plan debt that was actually financing them, and was then fully repudiated by Hitler. The Allies had learned their lesson from the Versailles Treaty and did not reimpose the 675% prewar debt level on occupied Germany, allowing it to start the Bretton Woods era practically with a clean slate (more than was vouchsafed the UK - see Robert Kuttner in the NY Review, http://www.nybooks.com/articles/archives/2013/may/09/debt-we-shouldnt-pay/?pagination=false).
The US, as net world creditor, could afford to absorb these losses and even went on to recycle its export surpluses in the Marshall Plan. Now the world has come almost full circle and Germany is a major net creditor. Does it have any alternative to debt forgiveness and recycling its trade surpluses with the Eurozone periphery? That austerity, deflation and forcible debt extraction are self-defeating is something we already learned in the 1930s. And a Eurozone breakup would be an even bigger debt write-off for Germany. So it's time to unclench the fist in the current account cookie pot and start doing something constructive.
Or there is a third alternative, that in a balance-sheet recession, monetary policy is largely ineffectual ("pushing on a string"). It was only fiscal policy (massive infrastructure and armaments expenditures), naturally with supporting credit expansion, that brought countries out of the Great Depression one by one after leaving the Gold Standard and suspending/repudiating international debts.
But Eichengreen's point is well taken - that Europe's obsession with the German hyperinflation of 1923 is misplaced and puzzling, and that the proper analogy is with the disastrous Brüning austerity emergency decrees and Austrian Creditanstalt bank run of 1931.
You can vote for candidates for the 'Creditanstalt' Brüning and Mellon Memorial Prizes at http://silverberg-on-meltdown-economics.blogspot.com/2013/03/announcing-creditanstalt-heinrich.html.