As if the EU’s ambiguous response to the Georgia crisis was not depressing enough, life is getting tougher on the economic side too in Europe:

The eurozone as a whole shrank by 0.2pc, the first contraction since the launch of the single currency a decade ago. Germany led the slide with a fall of 0.5pc. France and Italy fell 0.3pc. The delayed effects of the strong euro, tight credit, and slowing exports have now kicked in with a vengeance.

Problems for my own British-based budget as we sit in muggy Orlando:

The pound could soon dive to barely more than a dollar and a half while gold prices plunge to $650, experts predicted yesterday amid fresh evidence that the commodity boom is ending and the dollar’s resurgence is under way.

But whereas the UK can hope to use its currency as a set of buffers, the Eurozone faces much more searching internal strains:

… the euro is nothing like the dollar. It has no European government, tax, or social security system to back it up. Each member country is sovereign, each fiercely proud, answering to its own ancient rythms.

It lacks the mechanism of "fiscal transfers" to switch money to depressed regions. The Babel of languages keeps workers pinned down in their own country. The escape valve of labour mobility is half-blocked. We are about to find out whether EMU really has the levels of political solidarity of a nation, the kind that holds America’s currency union together through storms.

My guess is that political protest will mark the next phase of this drama. Almost half a million people have lost their jobs in Spain alone over the last year. At some point, the feeling of national impotence in the face of monetary rule from Frankfurt will erupt into popular fury. The ECB will swallow its pride and opt for a weak euro policy, or face its own destruction.

Gulp.