Those who hoped Europe might escape Wall Street's woes were sorely disappointed this week. Not only did markets slide across the continent, with bank shares especially hard-hit, but also a purchasing managers' index for the euro area fell to its lowest since 2001, and three business-confidence indicators were unexpectedly weak. The figures suggest that a recession may even have begun already. The questions are how deep it will be, and how long it will last. And the answers will depend heavily on the two biggest economies: Germany and France.rnGermans feel aggrieved. While others were living on easy credit and blowing bubbles, they practised virtue. The economy clawed back lost competitiveness via low wage rises. The public sector was in surplus last year. Exports and investment have done well, giving Germany its best spell of growth since the early 1990s.
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