At least one European economist is warning that Europe may try to use its new euro currency to press the U.S. into adopting its half-capitalist, half-socialist economy.

Highly-respected British economist Bernard Connolly argues in his expose of European Monetary Union politics, "The Rotten Heart of Europe: The Dirty War for Europe's Money," that the EMU will lead to a European state within 10 years that won't be anything like the U.S.

• Europe will be a Franco-German dominion: as long as France and Germany agree, all other countries must fall into line.

• Jean-Pierre Gerard, who was a member of the monetary policy council of the Banque de France, said the point of the single currency is to suck capital out of the U.S., force U.S. interest rates up, create unemployment in the U.S. and force the U.S. to accept global exchange-rate management.

• Connolly says that what Gerard meant is that if Europe reverts to statism, it would not be able to compete with the capitalist economies of the U.S. and Britain -- so the euro would be used to give Europe the muscle to push statism on the two.

• Europe's return to statism will disadvantage small, startup firms -- to the benefit of established giant companies.

European Union periphery countries -- Spain, Portugal, Italy, Ireland and Finland -- are growing much more strongly than France and Germany, Connolly notes. He predicts that the two core countries will force interest rates up, choking off the economic prosperity of the periphery countries.

Source: Peter Brimelow, "Counterrevolution," Forbes, November 2, 1998.