Game over. After braving a barrage of global headwinds for two years without veering off course, the eurozone economy is now finally running aground. The surge in oil prices by $45 per barrel over the first six months of the year and the further 4.5 per cent spike in the effective euro exchange rate at the same time have gone beyond what the region can bear. Unless oil and currency markets turn around soon, the eurozone may grow hardly at all for the next three quarters.

Leading indicators now point south. Adjusted for inflation, narrow M1 money supply is already contracting, signalling a recession risk. Unfortunately, real M1 is one of the best and most forward-looking guides to future growth. Standard business confidence indices have also come off sharply.