Growth figures for the eurozone are out on Thursday and the signs are not good.
Data already released show that industrial output was down in the single currency's "big three" – Germany, France and Italy – during the second quarter as the recovery that began in the middle of 2013 petered out.
A poll of economists conducted by Reuters found that the consensus was for the eurozone to have expanded by just 0.1% in the three months to June, but a flat quarter or even a small decline in output cannot be ruled out.
Nor, judging by the latest ZEW survey of German business, is the outlook for the third quarter any better. The view among City analysts was that the much worse than expected drop in sentiment to a 20-month low shows how external events can damage fragile confidence.
There may be more to it than that. As Carsten Brzeski of ING notes, only 3% of German exports go to Russia and the lost business could comfortably be made up with higher exports to the US and the UK, where demand is growing. Nor is there an immediate risk of the Kremlin cutting off oil and gas supplies to the west, given that energy accounts for more than 60% of all Russian exports.
So while it is clear that geopolitical tensions have darkened the mood in the eurozone's powerhouse economy, a bigger factor could be that the structural weaknesses in the French and Italian economies are starting to impinge on the order books of the manufacturing firms of Bavaria and North Rhine-Westphalia. A strong euro has not helped either.
Optimists take heart from the fact that the so-called fundamentals of the German economy are sound. But how sound? Germany is the mirror image of Britain: it needs to rebalance away from exports towards domestic demand. At present, it is vulnerable to the problems of its neighbours to the east, west and south.
That suggests four things: eurozone growth will continue to disappoint; deflationary pressures will grow; 10-year German bund yields will fall below 1%; intensified pressure on the European Central Bank to boost growth.
