MORE than 330 economists from across Europe have signed an open letter to EU heads of state denouncing plans for a single currency.

The letter, organised by three Dutch economists via the Internet, includes the signatures of 66 British economists - more than any other nationality.

It says that economic and monetary union (EMU) could offer advantages, but instead of paving the way for a modern European welfare state, the obsession with cutting budget deficits and government debt "institutionalises the dismantling of the public sector", the Guardian newspaper reported.

"EMU offers no perspective of an adequate response to environmental problems, of improvement in the lot of Europe's 20 million unemployed and 50 million poor, or for the defence and extension of the welfare state," the letter says.

"The greatest danger lies in the design of EMU which has led millions of Europeans to identify the Euro with austerity and social suffering.