And thus you may say that every Euro using nation effectively gave up sovereignty when they adopted said currency...

I would characterize it as more of a joint sovereignty pact, with all agreeing to accept a currency, and all in a mutual defense organization. It's not a pure federal government, but it's at least a confederacy.

But, to address the elephant in the room, as one can see from recent events divorcing fiscal union from monetary union can have some very detrimental effects.

You said it, we didn't.