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Worse still, the headwinds for the eurozone’s exporters could become far more threatening if, as a growing number of analysts fear, tomorrow’s US presidential election is followed by a sea-change in American exchange rate policy, triggering a further, steep slide in the dollar. If that were to happen, the euro, which neared record highs last week, could again bear much of the burden of the adjustment, undercutting Europe’s external trade.

None of this would matter as much if Europe were not so dependent on demand from the rest of the world to sustain its expansion. Its enfeebled domestic economies have grown by only 0.3 per cent a quarter over the past 12 months.

Confronted by this gloomy outlook, the EU’s leaders can only be painfully aware that there is little they can do to alter the fading prospects facing their countries.

Yet, perhaps there is hope that another bout of economic disappointment might, at last, provoke a serious effort at delivering some performance- enhancing change. History suggests that, while reform is easiest to achieve when times are good, it is only when the going gets truly tough that European governments have felt obliged to act. Another below-par recovery will raise the premium on reform.

If history also teaches that it would be wise not to invest too much faith in Europe’s political leadership, fortunately there are other sources offering hope for reform.

In recent work highlighted by Dresdner Kleinwort Wasserstein, the investment bank, Olivier Blanchard, a prominent French economist, argues that growing competitive pressures on eurozone companies may provide a market-based catalyst for labour market reform.

Professor Blanchard, who is based at the Massachusetts Institute of Technology, contends that Europe is not predestined to be a perpetual economic laggard. Rather, much of the Continent’s underperformance is the consequence of the choice of many Europeans to work less than people in the US or the UK, Blanchard says.

This preference for lower productivity may no longer be sustainable if eurozone living standards are to be maintained in the face of an ageing population. Professor Blanchard believes, however, that a change of attitude is being stimulated by an intensification of the competitive pressures facing eurozone companies.

Professor Blanchard argues that the deregulation of European product markets as a consequence of the steady extension of the single market policy means that eurozone companies will have to strive much harder to remain competitive.

These pressures are further heightened by both the integration into the EU of its ten new member states, with their low-cost, high-skill economies, and the challenge posed by the economies of India and China.

Professor Blanchard argues that if these pressures for reform are fostered by new, liberalising measures from the Commission — including the planned expansion of the single market to services and a more aggressive competition policy — then the need for job market reform will prove irresistible.

Here, then, is the key role to be played by the new Commission under José Manuel Barroso. On Friday, the EU leaders should tell Mr Barroso get on with the job. And if the medicine proves unpopular at home, they can lay the blame on Brussels.

The challenge for Europe’s leaders this week will be to light the blue touchpaper — and stand well back.

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