The European Central Bank looks poised to deliver an interest rate cut today to shore up a sagging economy before global conflict does any further damage.
The services sector, the backbone of the European economy, is shrinking, and manufacturing remains wobbly.
The euro marching through $1.10 has revived German worries exports will wither. Oil prices are near $40 a barrel, hurting household spending, and French consumer confidence has slumped.
Financial markets no longer are wavering, however, as they now widely expect a 0.50 percentage point rate cut when the ECB announces its policy decision at 12.45 p.m. today.
Cheaper money would mark a distinct policy shift from four weeks ago when ECB President Mr Wim Duisenberg said with the threat of war looming so large a rate cut would be wasted - a drop that would drown in a sea of uncertainty.
With official ECB rates at 2.75 per cent, a 0.50 percentage point cut would still put euro zone rates one full percentage point higher than those in the United States, where the economy is performing far better than lacklustre Europe.
Mr Duisenberg clearly tipped his hand toward a rate cut 12 days ago, analysts claim, when he said the economy is unlikely to hit its 2.0-2.5 per cent cruising speed this year.