Fear of a trade war with Russia over the crisis in Ukraine is sending a chill through Europe's fragile economy.
Two of the eurozone's biggest economies -- Germany and Italy -- reported data Wednesday that showed the potential for the crisis to derail the region's recovery.
Eurozone GDP grew by just 0.2% in the first quarter. Official second-quarter figures due next week are likely to show no improvement.
Factories in Germany, the heart of European manufacturing, saw orders slump in June, even before the shooting down of Malaysia Airlines' Flight 17.
It was the third monthly decline since the Ukraine crisis began in March with Russia's annexation of Crimea, triggering the first of several waves of Western sanctions.
Companies are holding off spending on big ticket items, worried that the conflict in eastern Ukraine could seriously damage Europe's trade with Russia.
"Even the initially very soft sanctions probably raised alarm bells in many boardrooms about escalating tit-for-tat sanctions in the future," noted Holger Schmieding, chief economist at Berenberg bank.
But in the event of a full blown trade war, Germany will be on the front line. The country's benchmark stock index, the Dax, has fallen 9.6% from its 52-week high in June, and has shed 4.6% so far this year.
That's more than double the losses seen in the broader European market.