Europe's Dismal Prospects Will Lead to Tumbling Euro

THIS week marked a milestone in the history of Europe’s single currency. On January 14th the value of the euro slipped to $1.17, the rate at which it was introduced on January 1st 1999. Back then, the fledgling currency weakened fast, hitting parity with the dollar in early 2000 and plunging to $0.83 by October of the same year. The slump in the euro’s value suited no one: the European Central Bank (ECB) worried about inflation from rising import prices; other countries fretted about declining competitiveness. So the world’s big central banks undertook a programme of co-ordinated intervention to stem the euro’s fall.