He believed that with European countries still committed to anti-inflationary measures, brought about by the Maastricht Treaty, they were in danger of overlooking the threat of unemployment.

''The monetary policy of many countries is still dictated by the Maastricht Treaty, which concentrates on combating inflation, and [countries] have not kept up with economic changes. As a result, policy is now in danger of being superseded,'' Mr Lyons said.

''Inflation is no longer the problem, the threat is from unemployment.'' Mr Lyons doubted that European monetary union would even begin to happen before 1995.

He said: ''Economic factors make monetary union unlikely this century.'' He said lessons must be learned from earlier attempts. First a flexible Exchange Rate Mechanism system with frequent currency realignments was needed, similar to that in place before 1987. Then lower interest rates were required, but the different economies needed to be growing in synchronisation before monetary union could be attempted. And this would not happen before 1995.

According to Philip Braverman, chief economist and senior vice-president at DKB Securities Corp, the situation in the United States was not much better.

''I am one of the few people around who do not see an economic turnaround in the US,'' Mr Braverman said.

He said he doubted there would be growth of more than four per cent for any quarter next year. Current economic indicators, which were predicting growth, were distorted by purchases made to replace items and homes lost in the mid-west floods, and also by the beginning of the annual Christmas spending period.

''The US economy is fundamentally weak, and I do not see a substantial lift in the near future,'' he said.