Economy buff, please explain to me why the Euro will fail?

What chart are you looking at?? When it started it was at $.60, went to $1.50 and still at $1.3350. Oil countries have expressed interest in using it as it's pricing currency....

obviously the euro may or may not survive in its current form. i would guess that survival is still far more likely than not.

in a single sentence, the main issue derives from many countries, with different economic performances, different unemployment rates, budget deficits, and such all sharing the same currency, which includes monetary policy (such as interest rates set by a central bank). to add a second sentence, the euro situation can be distinguished from the US (which also has similar regional differences) by the strength of local cultures (including language differences) and the relative lack of labor mobility.

krugman has written a lot about this and has an article in this weekend's ny times magazine that i believe discusses the euro:

http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html?_r=1&hp

The Euro won't fail because the EU has already committed to alternatives to save it that will be much less painful. A few months ago, there were basically three courses of action available. A break up of the Euro zone, which would allow countries like Greece and Ireland to issue their own currency at a really low value, which would have boosted exports while lowering the value of their debts and making it easier for them to pay its creditors. Greece and Ireland could have also defaulted on some or all of its debts, which would have caused many of its companies to go into bankruptcy and would prevent those countries from issuing new debt for about a decade. The road they took was to have Germany, the IMF and the rest of the EU loan them money at interest rates lower than they would have paid on the open market, which will hopefully allow Greece and Ireland to keep paying its civil servants while paying its debt obligations at the same time.

The biggest danger to the currency is the EU itself. Conceivably they could choose not to exist.

I don't know much about foreign currency exchange. But I know that the basic problem with European Union is that Germany is doing well economically and want to see the currency carry higher value. Greece, Spain, Portugal, Ireland want to see the currency be devalued so they can export, attract tourists and get other benefits of a devalued currency that escape me now. The EU is therefore being pulled in two directions and arguably could be torn apart with all the member countries reverting back to their own currency.