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Something extraordinary happened in the run-up to Labour's landslide victory six years ago: the City's currency dealers drove the pound higher rather than lower. Slung out of the ERM in 1992, sterling had sand kicked in its face until mid-1996. Then it started to do the kicking. By January 1999, when the euro was launched, the pound's trade-weighted value (the broadest measure of its worth) had risen by 20%. There were three main reasons why the pound started to punch its weight. First, Great Britain restored credibility to its monetary policy so that currency dealers ceased to worry about a return to the bad old ways of high inflation eroding the value of the pound. Second, the economy, and especially the City of London, did well in the 1990s, and this encouraged investment inflows of foreign money. Third, currencies overshoot: dealers marked the pound down too far in the mid-1990s and marked it up too much at the end of the decade. The strong pound turned a healthy expansion into a feel-good economy. At the same time, the strong euro will hit growth in Europe while the weak pound will reinforce Britain's recovery--hardly a promising backdrop for an early referendum on joining the euro.

The article considers whether Europe is poised for a substantial economic recovery and the factors, which might make such an event possible. While others sprint or jog the information superhighway, Europe is slithering. By any measure-miles of fiber-optic cable laid, numbers of television channels available or computers in homes-Europe lags behind the U.S. It fares even worse on such qualitative matters as the inventiveness of its software firms and its ability to produce entertainment that foreigners want to watch.

The article discusses the slowing of global economic growth as of 2013, with information on low gross domestic product (GDP) reports in the U.S. and China, increasing unemployment in Europe, and decreasing economic activity. Topics include the double-dip recession in Europe, the impact of austerity policies on European economic instability, and forecasts for improvement in the U.S., Great Britain, and Latin America in late 2013.