Europe’s economy is finely poised between recession and growth. The knife edge is sharp because European policymakers have exactly zero control over the outcome.

Before Russian President Vladimir Putin’s attack on Ukraine, Europe’s recovery from the damage wrought by the COVID-19 pandemic was solidifying. Industrial production rose in January and retail trade rebounded. Economic sentiment improved in the first half of February, surpassing pre-pandemic levels. But then the war dented consumer confidence by heightening uncertainty and raising energy and commodity prices. In mid-March, the European Commission’s consumer confidence indicator fell to its lowest level since the start of the pandemic.

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