When European leaders met in Brussels at the start of May to confirm that 11 countries would be going ahead with the launch of the euro on January 1 1999, they had reason to be quietly confident.
The French and German economies, after several years in the economic doldrums, were picking up steam at last.
The Maastricht convergence criteria had been successfully negotiated or finessed.
The first wave of the Asian crisis had passed without major damage to Europe or the US.
Stock markets on both sides of the Atlantic were powering ahead.
Five months on, there is still little doubt that the euro will be launched on schedule, but storm clouds have been gathering on the global economic horizon.
Japan has fallen into its deepest slump in the post-war era, with a banking system held together by government string.
Russia has suffered economic and financial meltdown.
Brazil and other Latin American countries are teetering on the brink of their second major financial crisis in four years.
Wall Street has fallen sharply and around $2.3 trillion has been wiped off the value of global financial wealth in the last three months, equivalent to around two years of UK national output (GDP).
How will this global economic crisis affect the "Euroland" economy?
There are four main channels of influence to consider: direct trade effects, indirect trade effects, financial sector impacts and exchange rate volatility.
Much of the initial analysis of the impact of the Asian crisis focused on the direct trade effects.
In total, exports to the Asian crisis countries, including Japan, amounted in 1997 to just under 10 per cent of total Euroland exports and 1.5 per cent of Euroland GDP.
Imports from Asia were of a similar magnitude.
I as a result of the crisis and associated currency depreciations, Euroland exports to Asia fell and imports from Asia rose by, say, 10-20 per cent, then the overall impact might be to reduce Euroland GDP growth by up to 0.3-0.6 per cent in 1998.
This would be painful for European companies and workers in the sectors concerned, such as electronics, motor vehicles, civil engineering and textiles, but it would largely be a one-off effect.
Certainly it would not be a disaster when judged against projected Euroland growth of around 3 per cent in 1998 without the Asian crisis.
Indirect trade effects, through spillovers to non-Asian economies that would then reduce their demand for European exports, also did not look that severe initially.
More recently, however, the crisis has spread to Russia and potentially to Central & Eastern Europe, which together account for around 7 per cent of Euroland exports. …