• CHRIS Graham draws attention to a strategic and existential error by the EU: the euro, (Next time we should be asked what Europe should look like, October 12).

Nobel laureate Joseph Stiglitz has identified it as a cause of economic divergence. Paul Krug­man and Milton Fried­man have condemned it and James Tobin has highlighted the menace of internal devaluation.

Pretty damning when a country was only permitted to adopt the euro if “strict” convergence criteria had been achieved. It is irreconcilable with “ever closer union”.

Germany has from its inception enjoyed an accommodative interest rate giving it an exchange rate lower than would be the case with the Deutschmark.

As a result Germany runs a balance of payments surplus with other countries that use the euro. Euros flow out of the southern countries to pay for imports from Germany.

The European Central Bank has to continue with quantitative easing to replace that liquidity. The whole edifice is underpinned by human misery and money printing which adds to the German surplus.

A Ponzi scheme where Charles Ponzi is the only one paying in. This will collapse unless the debts of the member countries are taken over by the ECB together with reserves.

By taking this step member states will become collectively responsible for the aggregate debt of the members. Now, that would be a move towards “ever closer union” but I can’t see Germany going for it.

The EU dream of creating a reserve currency has failed, but rather than face the fact the EU persists with desperate consequences that harm people. This is called hubris.

STEPHEN SOUTHAM
Mildmay Grove North, N1