ECB President Mario Draghi. Photo: Lu Yang/Xinhua News Agency/PA Images

In 2017 the euro area turned the tables on its critics, growing at 2.4 per cent, its fastest for a decade. But as 2018 draws to a close there is less to celebrate. First the pace of growth slackened and now it has become a crawl. As the outlook darkens, will the European Central Bank offer fresh succour when its governing council meets on 13^th December?

In the first half of 2018 the slowdown in Europe’s 19-strong monetary union appeared both predictable and manageable. The euro area had expanded by a heady 0.7 per cent in late 2017. The deceleration to a quarterly rate of 0.4 per cent until June brought growth into line with underlying potential, set by productivity and labour resources. However, the position deteriorated further in the third quarter, when growth fell to a meagre 0.2 per cent.

At first sight, the slowdown in the third quarter appeared to be a blip, caused in particular by an abrupt fall in car production as the motor industry struggled to comply with a new emissions standard. Consistent with this interpretation, Germany with its big car sector did especially badly, with GDP actually falling by 0.2 per cent in the third quarter. Yet this view was too sanguine since there was weakness elsewhere in the euro area, notably in Italy where output stagnated.

More tellingly, the setback to growth is persisting into the fourth quarter. A widely watched gauge of current conditions is an output index, compiled by IHS Markit, a data provider, which is based on monthly surveys of purchasing managers. This indicator, which covers priva…

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