Because of sharp inflation and a mounting balance-of-payments deficit, the central bank has introduced hardfisted monetary policies. The result: the economy is cooling off considerably.

Throughout its remarkable postwar prosperity, Western Europe has reacted fast to fight inflation. Lately, it may have overreacted: with country after country splashing cold water on overheated economies, icicles have started forming. After clipping along at a 5.6% pace in 1964, the Continent’s overall economic growth rate dropped to 4%…