Isn't the resurgence of the euro crisis (Wave of panic selling rocks euro markets, 11 April) an example, in a perverse way, of monetary union working? The euro created transparency so you could see how a widget made in Germany was produced more efficiently than one made in, say, Greece or Spain. Now it is clear that Greece, Italy, Spain, Portugal and Ireland have serious structural problems with their economies. It is the euro that has exposed these.
These countries should never have been allowed to become members of the currency union on the terms they were given. These terms were fudged because politicians wanted the euro to be a success and it would have been politically difficult not to let in such countries, despite the fact that they had basket-case economies. The only surprise has been how long it has taken for these issues to be exposed.
But this can be explained by the other extraordinary factor of the 10 years until 2008 – the completely illusory growth in the developed world economies based almost entirely on debt. This masked the basic problems with the single currency – the huge disparities between the economies of countries in the currency union. The euro is working, it will just take longer than expected. And that's the fault of the politicians.
Phil Parry
Cardiff
• Financial markets are nervous because investors are in a double bind. Default is inevitable. The bond markets are trading in securities the quality of which deteriorates as growth falters. Resumption of growth in debtor countries entails relaxation of austerity measures coupled with the political will to challenge the demand from elements seeking unlimited public guarantee of bank debt, including private debt, for years to come. Therein lies a paradox. Private investors would not lend to governments. A radical policy of restructuring the financial system following default is needed.
If the objective of economic policy remains to ensure the survival of bankers living in comfort, economic growth will be retarded for years. If banks are allowed to fail and growth resumes, some private lenders will lose out.
SP Chakravarty
Bangor, Gwynedd