The details are complicated, and not quite as frightening as they first appear. But the big picture is scary indeed, not least for the ECB.

The numbers on how much has recently been taken out of Greek banks by depositors have been much disputed - not surprisingly, when the official figures will not be published for weeks.

Depending on who you talk to, anything from €700m ($892m; £560m) to €1.2bn was taken out of banks in the days after the election, out of total deposits of around €160bn. That total, in turn, is about a third lower than it was at the end of 2009.

At the same time, the ECB has apparently now said that it won't directly lend to some Greek banks that it judges to be technically "insolvent". These are banks that have holes in their balance sheets, because, thanks to the restructuring of Greek sovereign debt, they can't now expect to get back all of the money that they lent to the government.

That sounds bad, but the banks that have lost access to direct ECB funding can almost certainly still get money from the Greek central bank, which, of course, is ultimately, getting its cash from the ECB (though unlike the more direct form of ECB liquidity support, all the risk implicit in this so-called ELA lending is, formally at least, borne by the Greeks alone).

As I say, both stories are complicated, and somewhat disputed, but, taken together, they do help to underscore two important realities.

The first is that the sheer uncertainty hanging over Greece and the lack of a proper government is greatly increasing the room for costly financial accidents.

The banks that the ECB has cut off, at least from direct ECB assistance, are due to be recapitalised any day now as part of the latest bailout. There is €48bn in the EU-IMF programme, earmarked for precisely this purpose, half of which has already been transferred to a special Greek fund. But in the current fraught situation, the Greeks can't even sort out how to get the capital into the banks, let alone when.

The second and most important reality is that the ECB is once again exactly where it doesn't want to be: right at the centre of events.

In the eyes of the markets (and most politicians), the central bank has the power to make or break the Euro. What the institution does not have is any desire to do this, or formal legal responsibility (I have explored some of the difficult issues for the ECB here).

The fall in Greek deposits, which are down by nearly a third since the end of 2009, is one reason why the Greek banks are now so dependent on money from the ECB. The other reason, of course, is that private lenders are not willing to lend to them any more.

One in five euros that Greek banks now lend to households or companies is propped up by the ECB. If Greece left the euro, all of that would stop and the Greek banking system would simply be unable to function.

Some see the leak about the ECB withdrawing funding from those banks as a giant blunder on a day when the president of the ECB, Mario Draghi, said in support of Greece only that the ECB had a "strong preference" for It staying in the euro.

Others think it's all highly strategic: the ECB wanted to remind Greek voters and politicians that if they stumble out of the euro the Greek financial system, to all intents and purposes, will be finished. Not getting the next disbursement from the IMF and the EU is the least of it.

I suspect the truth is less calculated. As we have seen, this is an environment ripe for accidents and unforeseen consequences.

But it would be no surprise if the ECB were trying every trick in the book to get Greece to toe the line.

Why? Because if things continue on their current trajectory, and Greece leaves, the ECB is the only institution with even a fighting chance of seeing off a panic in countries like Portugal, and "saving" the euro.

Mario Draghi doesn't want to be the Euro's "saviour" because that ought to be a job for governments. But nor does he want to be the one to pull the plug.

That was one clear message from Sir Mervyn King's forceful remarks on the euro crisis today.

The governor often says it's not his place to tell other countries what they ought to do. Then he often goes ahead and does it.

He talked of the eurozone "tearing itself apart" in a crisis that shows little sign of being resolved - because, unlike the UK and US, they have not confronted the solvency problems at the heart of the crisis head-on.

The European Central Bank, he said, had performed "heroically" in buying time for the eurozone's governments. But that time "had not been used to reach lasting solutions".

He has said similar things before, often forcefully. But in today's febrile atmosphere, his words carry more weight.

The same applies to his careful, but pointed, confirmation that the UK authorities have indeed been drawing contingency plans for a country leaving the euro, "and have been for some considerable time".

How would a messy continuation of the crisis affect us?

As usual, the BoE's new forecasts for inflation and growth do not allow for the possibility of a euro break-up, which they consider to be truly "incalculable".

But they do include the impact of continued uncertainty about it - for example, the fact that fears about Europe continue to push of bank funding costs.

The Office for Budget Responsibility (OBR) has made the same judgment in its recent reports. When it comes to forecasting models, the impact of a euro break-up simply "will not compute".

But, as I suggested to the governor in my question at the press conference, it's not just that the effects are uncertain - it's also that they may run in different directions.

If the departure of Greece and, perhaps, a few others results in faster growth for those economies than they would on the current trajectory - over 10 years, say - then the net impact on the UK could actually be positive.

That would be even more likely, if the short-term mess resulting from a "Grexit" turned out to be containable, as many hope but none can confidently predict.

As the OBR noted last year, it is also possible that a Greek exit would push down the UK government's cost of borrowing even lower, due to safe haven flows into sterling. In other words, it could save the government money, though it's pretty clear that a further rise in sterling would not be good news for the economy overall.

None of this is to say that a Greek exit would be a good thing for the UK. But it is important, as ever to consider the alternative scenarios for Greece and the rest of the eurozone.

None of those bode very well for the UK either.

As Sir Mervyn was at pains to emphasise, this is not a simple matter of "in or out" - or even, in David Cameron's rather undiplomatic phrase, "make-up or break-up".

Whether the eurozone ends up with 17 members or none, the governor seemed to be saying, is actually much less important than how and when the long-term imbalances at the root of the crisis get resolved.

European policymakers, I suspect, will not rush to thank him for his kind and timely advice. If he wants to lecture them about "resolving" the region's long-term debt and competitiveness problems, they might reasonably add, it would be helpful if he could include some specifics.

How exactly, for example, does Sir Mervyn think you could agree to restructure the private debt that is causing so much trouble, in an era of 24-hour news and round-the-clock leaks?

The lesson at the heart of Sir Mervyn's lecture is a useful one for UK policymakers. They tend to think that the messy survival of the euro would always be better for the UK than messy euro exits.

That could very easily be wrong.

I had a lively debate on this question this week with the BBC's veteran diplomatic correspondent James Robbins on the World Service.

I use the word "veteran" advisedly, but as James reminded us, he has been covering European issues for so long, he was there in Maastricht in 1992, when the basic rules for the single European currency were first agreed and signed into law.

In the programme we also heard from some distinguished economists from around Europe, all with a slightly different take.

As I suggested earlier this week, there's plenty of talk, now, about the need for Europe to focus on growth. But little agreement on what that means in practice - among economists, or policy-makers.

Will Chancellor Merkel and soon-to-be French President Hollande be able to find a common path? No-one knows.

When Frenchmen talk about the need to focus on growth, German officials take that as a code word for stimulus. It conjures up images of giant Keynesian taps being turned on - gushing out more good taxpayer money after bad.

Mr Hollande would say that is not what he - or the likes of the IMF - are talking about, when they talk about slowing the pace of cuts. What they are saying, rather, is slower consolidation could help the economy and the public finances at the same time. Because slower growth can push up the deficit as well.

If they can persuade the German Chancellor that it makes sense, even from the standpoint of the public finances, to balance budgets over a longer time frame, they might actually be able to reach a deal.

Lest we forget, this was precisely the argument that Germany made to its European partners a decade ago, in explaining why it was not going to get its budget deficit back to below 3% overnight.

Germany's deficit was above 3% in 2001, 2002, 2003, 2004 and 2005. Perhaps all Chancellor Merkel needs is a helpful reminder?

Something tells me it won't be that simple. Mr Hollande and others will need to sound more committed to reforming the economy, for starters.

But James Robbins agreed with me that the political pressures now on the German Chancellor do not necessarily make a Franco-German compromise harder to reach.

It is Chancellor Merkel's liberal partners who have suffered most in the polls in the past few months, while the Social Democrats have gained (plus a new "pirate" party, dedicated to internet freedom, who have been winning an astonishing 8% of votes cast in recent polls).

So, if anything, the centre of political gravity in Germany has shifted toward the more pro-European parties in the past six months. That's despite all the talk here about Germans being "fed up" with the euro. Apparently, it is just that: talk.

That doesn't mean that Merkel and Hollande are a match made in heaven. It does mean that the politics and economics of the situation - for both leaders - is more complicated than we might think.

That is still quite possible: today's decision not to inject any more new money into the economy merely puts the policy on hold.

But a majority did not see the case for more easing, right now - despite a lot of recent news which you might have expected to prod them in that direction.

Since the committee last met, official figures have shown the economy to be formally in recession; concerns about the eurozone have returned with a vengeance; credit and lending conditions have tightened again; the housing market has continued to soften; the latest PMI survey of manufacturers have shown a worrying fall in export orders; and, making things for exporters that much harder, the pound has strengthened.

It's now about 3% higher, on a trade weighted basis, than it was at the time of the Bank's February Inflation Report.

Just so we're clear: none of these things suggest that growth this year will be stronger than the MPC previously thought. They suggest the opposite. Yet policy is on hold.

Why? Because inflation, as usual, has not done what the Bank expected either. And the difference between forecast and reality cannot be entirely explained by rising energy prices.

In the language of economists, Britain is suffering from "sticky prices".

Tell us something we don't know, I hear you cry.

You do not need reminding that the MPC has been grappling with this unfortunate combination for rather a long time: again and again, growth has been weaker than expected, and inflation has been higher.

As the folks at Fathom Consultancy pointed out this week in an interesting new report, this is not only unfortunate, it is also unique among Britain's major trading partners.

The first chart shows how Britain's growth since the start of 2008 has lagged behind. The next shows what has happened to the price level.

Britain's national output is now more than 4% smaller than it was four years ago - but our price level has risen 15% in that time. That's a far greater rise than any other G7 economy - for much less growth.

Why has inflation been so stubborn? There are a number of possible answers: one is simply that we are importing inflationary pressures from the rest of the world (including from countries like China), after years when the rest of the world was helping to keep our inflation down. This may carry on for a while and there's not a lot we can do about it.

Another is that companies are finally trying to rebuild their margins by marking up prices, after years of being squeezed. Some on the MPC are sympathetic to this argument.

The final explanation, more worrying in the long-term for all of us (and much debated on this page in the past), is that we simply do not have as much spare capacity as we thought we did, meaning that there is less room for the economy to expand without prices and wages going up as well.

Official government forecasts - and many private ones - already incorporate a rather gloomy assessment of Britain's spare capacity.

In fact, they assume that the 2008 crisis has done more permanent damage to the UK economy than either the Great Depression or World War II.

It is possible that even this estimate is too optimistic about Britain's potential growth. It is also possible that it is too gloomy: what we are witnessing is, simply, a demand-deficient economy, made even weaker by imported price pressures and, to some extent, tighter fiscal policies.

The MPC is not making a firm judgment on that today. But the fact that it has not taken further action tells us quite a lot about the sticky wicket it still has to play on.

Short term, at least, the most important thing that has happened in the past few days is that Greece has moved several steps closer to leaving the euro.

True, a majority of Greeks want to stay in the single currency. But this is not a one-off protest vote: they clearly do not want to stay in on the terms negotiated by the previous government, and the rest of the eurozone do not want to offer them better ones.

Greece and its eurozone partners have come close to the brink before, and always found a way to step backwards again. Experience would suggest they will do so again.

There's no evidence, after all, that a party committed to tearing up the terms of the rescue package can even form a government in Greece.

But you have to say the chances of a messy Greek exit are higher than they were a few months ago. And, let's face it, they were pretty high then.

Weeks without a government, probably leading to new elections, more uncertainty and a wrangle over the next IMF review in June - it all leaves plenty of room for accidents.

So, the rest of the eurozone finds itself once again needing to answer two questions:

First, do they have the tools and money to protect the rest of the European periphery from the fallout of a Greek exit?

And second, do they have an economic strategy that can offer those other troubled economies a way out of crisis, without leaving the single currency as well?

The answer to the first question is that they are much better prepared than they were 6 or 12 months ago - both psychologically and financially - to tackle the market contagion from a Greek exit.

Policymakers exaggerate both the size and the immediate usefulness of the enhanced 700bn-euro ($911bn; £564bn) European "firewall", which could be supplemented by the new money that has been lent to the IMF by Britain and other countries.

Even on paper, the funding now available would not be enough to cover the financing needs of all of the countries in the firing line for any length of time. But the war chest is much larger than it was.

And at least some thought has been given to how it could be deployed, at a pinch, particularly to shore up banks in countries like Spain.

The answer to the second question is that they have an economic strategy for getting out of this - but it's not one that any of the key players in the eurozone have a great deal of confidence in (with the possible exception of Chancellor Merkel).

What's changed in the last few weeks is that the ECB President, the incoming French President, the International Monetary Fund and the European Commission all now seem to agree that there needs to be a greater focus on "growth".

The bad news is that they completely disagree on what a more "growth-focused" approach would look like.

For ECB chief Mario Draghi (and the Italian president Mario Monti), it means deeper, faster structural reforms to free up labour markets, deregulate service sector industries and generally rein back the role of the state.

For Francois Hollande, it means looser fiscal and monetary policies, and a slower pace of structural reform (if any).

That, after all, is the platform he fought the election on, though it must be said, President Sarkozy had not been such a great champion of a smaller state. French public spending is now around 58% of GDP - by far the highest in the eurozone.

For the European Commission, it means a lot more references to the word growth in Brussels policy documents - and a lot of new European infrastructure projects which might well take years to get off the ground.

The IMF and the financial markets would probably like to see a combination of all of these: long-term structural reforms to free up economies and put government spending on a more sustainable path, combined with some short-term relief on austerity and (with luck) easier monetary policy as well.

If Chancellor Merkel could then agree to some form of mutalisation of eurozone government debt, well, a workable way out of the crisis might actually be in sight.

Does President Hollande's victory make it more likely that this miraculous deal might be struck?

One is tempted to say it is less likely, given Mr Hollande's rhetoric on the campaign trail.

This is not a man who seems to think France is crying out for difficult reform. He is a man who sounded for all the world like a man who would like to keep things more or less as they are, only with fewer spending cuts.

But, as I wrote here recently and discussed on the Today programme this morning, when you look at his policies, the difference between President Hollande and President Sarkozy looks a lot smaller.

He would delay the VAT rise due to come in the autumn. And he would balance the budget by 2017 rather than 2016.

But on paper, at least, there's a smaller gap between them than there was between Labour and the coalition in 2010.

You never know, if President Hollande and Chancellor Merkel are committed to making it work, the Franco-German relationship might actually do better with a less theatrical character running France.

The German Chancellor is under pressure herself after this weekend's disappointing local election results. And she wasn't President Sarkozy's greatest fan.

So, this weekend's events need not spell disaster for the eurozone. But they do spell a lot more uncertainty. For that reason alone, investors and policymakers are right to be nervous.

President Obama and Congress, so the argument runs, have not tried to cut America's humungous deficit "too far and too fast". As a result, their economy is now significantly larger than it was before the recession, whereas Britain's is still more than 4% smaller.

It's not only Labour politicians that say this. In the debate about the trade-off between austerity and growth, America is widely felt to be on the 'growth' side of the argument - and most European governments on the other.

So I was interested that the Conservative Party Chairman and minister, Baroness Warsi, fought back this week in an interview on the World at One, pointing out that the US "has cut its debt further and faster than the UK... it's a myth to say they haven't."

Quick-witted readers will note that she has made the traditional mistake, of confusing the government's annual deficit with its debt. The UK government's deficit will be around £120bn this year; its accumulated debt (all of the deficits it has run in the past, plus interest) will be well over £1,100bn.

The deficit is falling. The absolute debt figure almost never falls; in fact, it's going to be years before it even falls as a share of the economy, in either America or the UK.

So, there's a big difference between "cutting the debt" and "cutting the deficit". But let's face it, this is a mistake that senior politicians and journalists make all the time - including, on this occasion, the presenter interviewing Baroness Warsi (sorry, Martha).

Let's assume they both meant deficit. Is Baroness Warsi right?

Tim Harford asked me to look into this for More Or Less on Radio 4. We discuss the answer on the latest programme.

On the surface, she is right. Using the latest figures from the International Monetary Fund (IMF), the US budget deficit is due to fall by nearly 5% of GDP between 2009 and 2012, from 13% of national income to 8.1%. That compares with a fall of just 2.4% of GDP over the same period in the UK, from 10.4% to 8% of GDP.

That is indeed interesting - and a little surprising. But, when you dig a little deeper, it's not clear that the story favours Baroness Warsi's side.

Why? Because the faster pace of deficit reduction in the US does not seem to come from greater government efforts to cut borrowing. Instead it seems to come from, er, faster growth.

This comes through when you look at what has happened to the "cyclically adjusted", or structural, deficit for each country since 2009. That is a much better (though still deeply imperfect) guide to whether a government is actively taking steps to cut borrowing, because it supposedly strips out the automatic effect that the rate of economic growth will have on spending and revenues.

When you do that, the UK and US positions are exactly reversed.

The IMF thinks that America's structural deficit has fallen by just 1.6% of GDP since 2009. By contrast, the coalition has been able to cut it from 9% of GDP in 2009 to 5.1% in 2012 - a fall of four percentage points.

So it turns out that the standard view - that America and Britain have been pursuing different paths - is true, after all.

The traditional view also seems to fit the facts in the eurozone, which the IMF reckons to have halved its structural deficit in this period since 2009, to 2% of GDP this year. However, the story for individual countries varies enormously, as you would expect.

Germany has cut its structural borrowing from a piddling 1.3% of GDP in 2009 to an even smaller 0.6% of GDP in 2012. Spain has had to cut its structural deficit from 9.7% of GDP in 2009 to 3.9% of GDP in 2012. So it has had a smaller relative tightening than Germany, but a much more punishing one for the economy.

Some will point out that, by maintaining or even increasing its borrowing, the US Federal government has been merely offsetting the tightening being done by individual states. So it's not really an example of fiscal tightening - or loosening.

The states have indeed been tightening more than the centre - especially in 2010 and 2011. But the IMF numbers are for the government as a whole, not just the part based in Washington, so the overall comparison still stands.

More fundamentally, you could argue that America has merely been delaying the day of reckoning - that it has literally "bought" a recovery that flatters the short-term borrowing numbers, while building up a big bill for the future.

If the IMF is right, America's structural deficit, at 5.9% of GDP, is now higher than Britain's.

Of course, Ed Balls would tell a different story with these numbers.

He would say the slower pace of austerity in the US had enabled the US to "grow out of" a good chunk of its borrowing, without any obvious cost to its economy or its market credibility (give or take a triple A). The US structural deficit, after all, is still falling, and the interest rate on 10 year US government debt is lower than Britain's.

In a speech earlier this year, Adam Posen, the US economist on the Monetary Policy Committee at the Bank of England, said America had grown faster than Britain because corporate investment and consumer spending had both been a lot stronger, and inflation had been lower.

The dearth of investment is largely due to British companies' greater reliance on banks for their funding, and their greater exposure to market tensions in the eurozone. The other two - weak consumer spending and higher inflation - owe something to the government, especially the increase in VAT.

That decision, by itself, almost certainly lowered Britain's growth last year. But as the Posen list makes clear, it wasn't the only factor holding the economy back and there were other factors supporting growth in America, including much faster growth in productivity.

What is clear is that America has been able to "cut its debt (sic) further and faster" than Britain - but this has not been the result of any closet commitment to austerity. Quite the opposite.

At this point, George Osborne would usually jump in to say that Britain and America are not strictly comparable, because America's dominant role in the global economy and world financial markets give it much greater room for manoeuvre.

That may well be true. But if the Chancellor does not want anyone to compare Britain and America's approach to government borrowing (or debt), someone forgot to tell Baroness Warsi.

The downward lurch in the economy in 2008-09 was certainly dramatic. But for the past 18 months the UK's national output has been broadly, and disappointingly, flat.

The 0.2% decline in GDP in the first three months of 2012 is slightly worse than many expected, and bad news for those hoping the UK would avoid falling formally back into recession. But the underlying story told by these statistics is not news to anyone: the UK's economy is bumping along the bottom and still struggling to gain momentum.

Economists at Citi point out that, excluding the war years, it's been the worst four years for the UK economy in at least 100 years: worse than what happened in the 1920s and 1930s, and worse than anything in the 1970s and 1980s.

In all those other cases, it took less than four years for the economy to get back to where it was before the downturn started. Indeed, four years after the start of recession in the early 1980s - that iconic example of a double-dip - output was 3.2% higher than its pre-recession peak.

Not this time. These figures show that the UK's national output was 4.3% lower in the first quarter of 2012 than it was in the first quarter of 2008, just before the recession started.

Are the official numbers wrong? An impressive number of independent experts, with access to a lot less information than the ONS, are today convinced that they are. A quick taste:

Kevin Daly, the chief UK economist at Goldman Sachs, says the numbers are "unbelievable". The British Chambers of Commerce calls them "unduly pessimistic". And Andrew Goodwin, senior economic adviser to the Ernst & Young Item Club, says he reacted to the figures with "disbelief".

Goodwin continues: "The divergence between the stronger survey data and dire official output estimates is virtually unprecedented and must raise significant question marks over the quality of the data.

"The construction figures are an obvious source of bewilderment, as they have been throughout the past few years…. But it isn't just the construction data - the services data also looks highly questionable."

I don't know which is more striking, the doubts about the ONS numbers - or the supreme confidence of their critics.

Even before today, many had questioned the very weak recent numbers for construction, which are at odds with private business surveys such as the CIPS/Markit PMI. Members of the Bank of England's Monetary Policy Committee, for example, have described them as "perplexing".

For the record, construction accounts for about 7% of the economy but seems to have lowered the estimate for GDP in the first quarter by about 0.2%. That's quite a lot.

You might remember Noble Francis, economic director at the Construction Products Association, who has questioned the official construction numbers in the past.

Interestingly, this time around Dr Francis is more or less the only expert coming out on the side of the ONS. To him, it's the strong Markit/CIPS survey that is perplexing, and at odds with what many in the industry have been telling him.

He notes, for example, that the survey showed construction activity in March rising at its fastest rate in 21 months, despite new orders for construction having fallen by 14% in 2011. He says new orders are usually a decent guide to future activity.

Whatever you think about the construction data, it's worth noting that today's official estimate of a 3% fall in output in that sector in the first quarter is actually less than many expected. The big disappointment for most forecasters came, rather, from the services sector, which registered only a 0.1% rise.

So, even ignoring construction, the official estimate for growth in the first quarter would only just make it into positive territory. Surveys of services have also been more upbeat than the ONS, but they hardly point in the direction of a nascent boom.

We know today's growth figure will almost certainly be revised, one way or another. If you looked solely at the historical record, you would guess that it will be revised up.

But even this preliminary number is consistent with the message coming from official and private data, that the UK is once again relying heavily on services and consumption by households for its growth, and they are not looking very buoyant.

So, double-dip or not, the economy is not hurtling down, or soaring up. It is not doing very much at all.

Whether we will see another negative number in the second quarter will depend, among other things, on the negative impact of the extra Bank Holiday in June and (sigh) the positive effect of any bounceback in construction. But that's what you get when the big picture is so weak: a lot of erratics.

Economies, like fairground punters, are easily distracted when the main attraction falls flat.

Update 17:00: In the debate about the construction numbers, it's been brought to my attention that there are other aspects of the Markit/CIPS data which some will find even more perplexing - like the fact that it has shown construction output rising every single one of the last 15 months, and only recorded one monthly fall in output in the last 25 months. That does seem a little odd.

We've also clarified a statement made in an earlier version of this blog, that this is the worst recession/recovery cycle in 100 years, according to Citi economists.

Citi admits that they should have qualified this slightly: it's the worst in peacetime.

The UK economy has been bumping along the bottom for more than a year and is still struggling to gain momentum.

Many have questioned the dire numbers for the construction sector, which accounts for less than 7% of the economy, but has done much to pull the GDP figure into negative territory.

The sharp fall in output from the production sector is also at odds with recent business surveys (though manufacturing has not fallen as the sector overall).

However, this preliminary figure is consistent with the message coming from official and private data - that the UK was once again relying heavily on services and consumption by households. That suggests the recovery will continue to be weak, though whether we will see further quarters of negative growth is very much an open question.

Spending a few days in Washington and New York last week I was surprised to discover the answer was no.

I didn't meet anyone actively looking forward to a Hollande victory. That would be too much to expect.

Given the choice, diplomats and international officials almost always prefer to have the devil they know in charge of a major country, not to have to get to grips with someone new. And the little they do know of Mr Hollande - like that promise to slap a 75% tax rate on the country's top earners - has not left them very impressed.

However, few expect him actually to go ahead with that tax threat.

What they do expect Mr Hollande to do is to speak up for a more gradual approach to cutting eurozone budget deficits - and a greater emphasis on economic growth.

That is a debate that many senior members of the IMF would greatly welcome. So would many inside the White House.

I have written previously about the IMF's private efforts to persuade Germany and other eurozone countries not to take such a hard line of fiscal austerity in countries like Spain and Italy. These efforts have come more into the open, lately, in the heated debate over Spain's deficit plans, and the publication of the latest IMF Fiscal Monitor.

Privately, and publicly, the Fund supported Spain's recent decision to raise its deficit targets. The Fiscal Monitor even suggests the revised policy should have been looser still.

That same report also concludes that for countries with spare capacity in their economy (which in the current context means most countries in Europe), "fiscal adjustment implemented gradually has a smaller negative impact on growth than an upfront consolidation of the same overall size. This suggests that where feasible, more gradual fiscal consolidation is likely to prove preferable to an approach that aims at 'getting it over with quickly'. "

George Osborne's friend, Christine Lagarde, has never been willing to apply this logic to the UK's budget plans. We have to assume she will be equally tight-lipped in public when it comes to her own country, France.

And yet, if you had read everything that the IMF had produced recently on the subject of deficits and growth, you might well conclude that the Fund is rooting for the socialist - at least when it comes to short-term policies.

Hollande would balance the budget more slower than Sarkozy (by 2017 instead if 2016), and would focus more on tax rises to do it.

That doesn't sound like something the IMF would favour. But applying its own analysis of the so-called "fiscal multipliers" in different countries (the impact on growth of a given change in public spending or taxes) suggests that the socialist's approach would boost French GDP by about 0.2%, relative to President Sarkozy's plan, and cut France's public debt ratio slightly faster.

The difference between them is not large, and there's a big margin for error. Indeed, the IMF says the multiplier in France is particularly hard to measure because of big gaps in the data.

But in publishing all this new data, the Fund is clearly attempting to force a debate in Europe over the pace of fiscal tightening and its likely impact on growth.

Many fund officials would be happy to hear a French President re-ignite that debate after 6 May - though naturally, they would rather the president in question were not (gasp) a socialist.

It's a phrase that has sprung to mind pretty often since the eurozone crisis started, and it now applies - in block capitals - to Spain.

The biggest Catch 22 for the Spanish government is also the most obvious.

Its cost of borrowing (the bond yield) goes up when financial markets worry that it will not get a handle on its budget deficit. But it also goes up when ministers talk about the tough measures they are going to take to get that deficit down, because of fears that spending cuts and tax rises will tank the economy and therefore be self-defeating.

It's a good example of the market's "schizophrenia" on the subject of fiscal austerity, highlighted by the IMF's chief economist at the end of last year and often debated.

But, as Goldman Sachs economists make clear in a recent, very thorough four-part analysis of the fiscal and competitiveness problems facing the European periphery, the Catch 22s for Spain go deeper than that, and they are even worse for Portugal and Greece.

I've bored you many times with the thought that the crisis economies have not just a fiscal problem, but a competitiveness problem, built up over their first decade in the euro.

To fix that latter problem, the Goldman Sachs team reckon that Portugal needs a real devaluation of around 35%. In other words, the nominal cost of Portuguese labour and other inputs has to fall by 35%, relative to their trading partners.

The equivalent figure for Greece is around 30%, while Spain needs a real depreciation of just over 20%, and Italy about 10-15%. Interestingly, they think this part of Ireland's adjustment is more or less complete.

To put these figures into perspective, the fall in the value of the pound in 2008 was one of the largest depreciations to have occurred in a major industrial country since the war - and produced an increase in UK competitiveness of around 20%.

So, Spain now has to pull off the same thing, but without changing its nominal exchange rate by one peseta - because, to state the obvious, it doesn't have pesetas any more. It has euros.

As I've also mentioned many times, achieving that kind of improvement without changing the exchange rate requires a long period in which domestic prices and wages in these economies are falling relative to other countries' - notably Germany.

Germany is not so keen on that part of the remedy.

President Sarkozy has started talking about the ECB again, and what it might do to help eurozone growth. He might ask it to pay less attention to German inflation for a few years - maybe halve Germany's share in the eurozone inflation index? But I digress....

German officials do tend to argue that structural reforms to improve the country's competitiveness will themselves support growth - and, theoretically, help the budget.

That might be true in the long run. But in the short run, improving competitiveness is likely to make things worse, and not just because shrinking pay packets will tend to shrink the economy.

The other reason that improving competitiveness makes the fiscal challenge that much tougher, in the short run, is that, by definition, cutting (or slowing the growth of) domestic prices and wages has to slow the growth of domestic inflation - and therefore the cash value of national output.

That matters because, remember, all those crucial targets for the deficit and the debt are all measured as a share of nominal, or cash, GDP.

Other things equal, the slower the growth of nominal GDP, the more cuts and tax rises will be needed to bring those ratios down.

The numbers here are not small.

The Goldman Sachs analysis suggests that, other things equal, the output effects of restoring competitiveness could raise Portugal's debt to GDP ratio by around 35 percentage points over a decade, and the Greek ratio by around 30 points.

On this reckoning, both Spain and France could see a 10-15 percentage point rise in their public debt ratio over 10 years, from this factor alone.

So, you can see there are really two Catch 22s for Spain, which are even worse for Portugal and Greece.

The "austerity" Catch 22 is that tougher action to bring down the deficit will hurt the real economy, and could thus make their debt problem even worse.

The "competitiveness" Catch 22 is that tougher action to make Spain more competitive on world markets will almost certainly squeeze the cash value of the economy, which (you guessed it) is likely to make their debt problems even worse.

Here's the conclusion that Goldman Sachs draws, on the basis of its extended analysis:

"Our results suggest that, for some euro area countries - notably Greece and Portugal, but arguably Spain as well - the task of regaining fiscal and external balance through cyclical adjustment alone appears large, to the point of being insurmountable."

Or, to put it another way, these governments may well be damned if they do, and damned if they don't.

In the Budget last month, George Osborne again cited his favourite trade statistic - that the UK exports more to the Republic of Ireland than to all of the Brics countries (Brazil, Russia, India, China and South Africa) combined. In fact, as I tweeted at the time, that's not true. It hasn't been true for a while.

In 2011, 8.7% of UK exports went to the Brics, compared with 6% to Ireland. The share going to the Brics was also slightly higher in 2010. But Ireland did take a larger share in 2009: 7% compared with 6.6% for the Brics.

Those were the figures available when Mr Osborne first highlighted that number, on an early trip to India.

It's good news that our exports to India, China and others have been rising since then (less good that our exports to Ireland have fallen off a cliff).

But the new trade figures underscore how much more needs to be done if we want to catch up with the likes of Germany and count on those markets for a significant part of our growth. Economists at Citi reckon that Britain has the lowest share of exports going to the Brics in the European Union.

The data show the trade deficit widened again in February, to £8.8bn. That's the largest gap between our exports and imports since September. The deficit in January has also been revised up.

What's disappointing is that it's exports driving the deterioration - the value of our sales to other countries fell by 3.4% between January and February, while our imports from the rest of the world were broadly stable.

And, most surprising, it's exports from outside the European Union that have dropped, by nearly 9%. Exports to countries in the eurozone actually rose in February, by more than 3%.

Does this mean that the government is talking nonsense when it says the eurozone crisis is hurting the recovery? Not necessarily.

For one thing, the monthly figures jump about enormously. If you look at the average of the past three months, exports to non-European countries have risen by 2.7%, while exports to the eurozone have fallen by 1.2%.

Looking at trade with individual countries, you can see our exports to the crisis economies have been hit hard. Our exports to Spain, Portugal and Italy have all fallen by well over 10% in the past 12 months. Our exports to Greece are down by nearly a quarter.

But, as you know, other parts of the eurozone, notably Germany, are doing much better. And so are other EU countries, like Sweden, not inside the euro.

Thanks to them, our trade with the European Union as a whole has been holding up, though the last few months have shown signs of weakness, even there.

It's dangerous, and almost certainly fruitless, to dwell on one month's trade statistics - or even three. The fall in exports to America and China at the start of the year could well turn out to be a blip.

And Britain's trade numbers get revised so often, and so dramatically, that Sir Mervyn King, for one, has said he doesn't take them seriously until they are at least a year old.

Still, these are not statistics you would want to see if you were pinning most of your hopes for a decent UK recovery on exports.

They do suggest that David Cameron is right to be piling on the air miles in Asia this week. Though, when it comes to export destinations, it will surely be a while before Burma makes it to the top ten.

Well, tell us something we didn't know, I'm tempted to say on behalf of many economists.

For them, the surprising thing about the past few weeks or so is not that the mood of calm in European financial markets appears to be ending, but that it lasted as long as it did.

A trillion euros is a lot of money. Even in today's many-zeroed world. The European Central Bank could reasonably expect to get quite a lot of market tranquillity in exchange for all the cheap loans it has doled out to European Banks since the end of last year.

But, as I and others have pointed out many times, the worries about bank funding are only one piece of the eurozone crisis. They are also the easiest to fix.

In addition, Europe's leaders have to worry about the state of the public finances in the periphery economies: particularly Spain and Italy but also, increasingly, France. And they have to find a way to revive the real economy.

What the financial markets have apparently remembered in the past few days is that, by itself, the official solution to the sovereign debt problem (more and more austerity) makes the real economy problem even worse, at least in the short run. Reading recent press reports, they also seem to have discovered that savage spending cuts and tax rises can make governments really unpopular. Who knew?

Ok. I am being a little facetious. Financial markets aren't stupid - or not always. Investors knew there were a few holes in the programme to rescue the eurozone, and that there wasn't a lot of room in that new fiscal convergence treaty for stimulating growth.

In their hearts, I'm pretty sure that investors also knew that you couldn't get rid of economic problems that have built up over years by simply using the word "technocratic" a lot, and throwing money at the banks.

But for all that, I think there was a hope that with a fair wind, and some decent growth in the US and the core eurozone economies, European leaders would squeak by without another major eruption - in Spain or anywhere else.

That is still possible. But it's looking less likely than before, for two reasons.

One is economics. All that official lending for the banks has almost certainly prevented a major seizing up of the financial markets which would have been terrible news for ordinary borrowers. As we know, the cheap money has also eased funding issues for governments, as periphery banks buy their own government's bonds.

But, interestingly, there is NOT much sign that banks from other parts of Europe or the world's institutional investors have gone back to buying sovereign debt in a big way. The latest figures, for February, show that sovereign holdings by German banks, for example, have fallen slightly since November, while holdings by Spanish banks have risen by 68bn euros (£56bn; $89bn).

Nor is there much sign that the cheap liquidity, or the cuts in the official ECB policy rate, have filtered through to households and companies in the countries that need it most. As Marchel Alexandrovich from Jefferies, has pointed out, mortgage rates in Spain and Portugal are higher now than they were at the start of 2011 - half a percentage point higher in the case of Portugal, despite ECB rate cuts.

Outside the financial sector, companies are also paying more to borrow in these countries: borrowing costs for ordinary businesses have risen by 1.4 percentage points in Portugal and 0.8 percentage points in Italy.

It's really too soon to judge the full effect of the ECB's actions on the amount of credit flowing through these economies. Monetary policy takes time to feed through to the real economy, at the best of times. But we can say they haven't seen much of an upside yet.

Talk of further rounds of fiscal austerity in Spain and the others does not help the situation. Nor do the latest jitters about the US economy - and China. (Though, when it comes to the US, the fundamentals do look better than they did this time last year, when the strength seen in the first few months of 2011 started to evaporate.)

The second reason why the "squeak by" scenario for the eurozone now looks more difficult is a sudden outbreak of politics.

I say sudden. It's not exactly news that France and Greece are about to have important elections. But it is scary, for international investors. Or ought to be, when so few of the ingredients of a lasting solution to the Eurozone crisis are in place.

Like it or not, the Greek election, which we now know will happen on 6 May, will revive questions about whether Greece can stick with its new programme - or, indeed, the euro. But the election in France on the same day could prove more consequential.

Why? Because a victory for Francois Hollande in France would re-open the entire debate about austerity and growth, right at the heart of Europe.

The very phrase, President Hollande, could also (whisper it softly) cause investors to wonder whether France - the country with by far the highest government spending as a share of GDP in the eurozone - deserved to be borrowing at less than 3%.

We know what Nicolas Sarkozy thinks about fiscal austerity: he's in favour, at least when it comes to countries that aren't France. It's harder to predict where M Hollande will stand the next time that Spain decides to revise its deficit targets. Or what the German Chancellor will say in response.

We do know how investors are likely to react in the face of further arguments about the future direction of the eurozone, not to mention to further downward revisions to most European economic forecasts.

All of which is to say, those crazy financial markets may be on to something. I don't think the eurozone crisis is over, either. Spring fever in the eurozone

Official data - and private surveys - have been all over the place lately.

But the underlying message has not changed: the recovery is still fragile, and so is the optimistic mood we have seen in global financial markets since the start of 2012.

The Organisation for Economic Co-operation and Development does not exactly have a shining record as a forecaster.

When it said recently it expected the UK economy to shrink slightly in the first quarter of 2012, I did wonder whether the downbeat prediction would turn out to be a counter-indicator - a sign that we had definitely avoided a double dip.

And so it proved - at least until Thursday. No sooner had that forecast come out than we had a string of upbeat business surveys suggesting that growth in the first three months of 2012 might be stronger then we thought.

The purchasing managers survey for manufacturing - the PMI - hit a ten-month high in March, and the service sector survey for that month made back nearly all of the fall of the previous month.

On their own, the PMI surveys for the quarter as a whole are pointing to growth of around 0.5% in the first three months of the year.

That's roughly what the Bank of England has been expecting - but significantly above most city forecasts.

But, as the PMI's manufacturing numbers confirm, the picture painted by these private surveys is a good deal stronger than that shown so far by the Office for National Statistics, which highlighted an alarming 1% fall in official manufacturing output in February.

What are we supposed to conclude from all this?

First, the surveys are unlikely to be completely wrong. When you look back at the past few years, they have been a pretty good guide to where the economy is heading.

However, as Geoffrey Dicks at Novus Capital markets pointed out recently, short-term, the correlation with the official data is pretty weak.

On a month-to-month or quarter-to-quarter basis the surveys are not good at telling us what the ONS will come up with - even if they do tell us which direction the wind is blowing.

Second, the best guess is still that the UK will record very modest growth in the first quarter. But if so it will rely heavily on the relative strength in services.

Weakness in manufacturing and - especially - the construction sector could all too easily mess things up.

But, finally, even if we avoid a technical recession we cannot assume that the second quarter will bring more growth. Indeed, with the extra Bank Holiday the figure could very easily be negative.

Since the autumn of 2010 the UK has shrunk in three quarters and grown in two.

The best guess now is that it will grow slightly in the last quarter, then stagnate or even fall slightly in the spring, before gathering some steam in the second half of the year. But that is all it is - a guess.

UK and global investors seem to believe, among other things that the eurozone crisis is over; that the US economy is back on track for a "typical" recovery; that the price of oil will not seriously disrupt global growth; and that China will engineer a soft landing for its economy.

Even if those brave assumptions turn out to be right, there will surely be plenty more zigs and zags in the UK recovery before 2012 is done.

The state of the economy and public finances hasn't changed much since November, and in theory, all the many changes the chancellor announced on Wednesday leave the balance between spending and taxes at the end of this parliament more or less unchanged.

Here's the bad news: it's going to revolve instead around whether George Osborne is cutting taxes on Britain's highest earners.

Ask any normal person these questions, they would probably blame the banks. But then world-weary "experts" - policy makers and commentators - would usually step forward, to put them straight.

That's one good reason economists would give for removing the 50p tax rate on Britain's highest earners - and taxing its most expensive houses instead.

Without help, the Greek government would have messily defaulted long ago, with who knows what consequences for its neighbours and the entire global financial system.

As expected, the Monetary Policy Committee have decided to keep policy where it is, with the extra £50bn cash injection agreed last month still under way and the official Bank Rate on hold at a mere 0.5%.

Some 800 banks have hoovered up 529bn euros in cheap money. We don't know yet what they are planning to do with it. But if the first batch is any guide, the loans will go some way to tackling the first two fears hanging over banks and governments.