America's accelarated attempt to rope inflation at home appears likely to put a choker as well around Europe's more finely tuned economies, compounding government woes on this side of the Atlantic and contributing to political tensions in the Western alliance.
Already hard pressed to pay for oil and at the same time control inflation, most West European countries have little room to amneuver against Washington's tightened economic pull, particularly in world money markets.
The result is likely to be a further pinch on economic growth in Europe and, some analysts say, a recession later this year.
Predicting a general deterioration, one London banker wryly summed up his view with a bit of Tennyson: "Into the jaws of death rode the 600," he said, quoting from the "Charge of the Light Brigade."
West Germany's state secretary for finance, Manfred Lahnstein, was somewhat more reserved in his outlook. "Frankly, we are on the suffering end of America's battle," he said. "We will have to wait it out."
The United States and Europe are using the same basic approach against inflation, hiking interest rates and reducing government spending. European officials believe they started serious play on these measures before the Americans, and that the United States, by failing to take tough steps earlier, only muddied up the field.
President Carter's proposals to tighten U.S. economic policy have been welcomed in Europe as courageous, necessary and log overdue, but they also carry burdensome consequences for this continent.
European governments watched with renewed concern this week as international funds fled excitedly to the United States to benefit from relatively high interst rates.
This flow caused the dollar to rebound further against Europe's weakened currencies, prompting speculation that interst rates here would have to be increased above already near-record levels to get money flowing back.
Europe's interest rates already have been ratcheted up in recent weeks in response to U.S. moves, and if this pattern continues, officals and analysts worry it could touch off a damaging international interest rate war. "No one is going actually to make a declaration," said the London banker, "but that's what it will be.
A nasty chill had fallen over world credit markets as a result of the U.S. stronger dolare means rising import prices and hence higher domestic inflation.
The scramble to keep up has left monetary officials somewhat out of breath. Belgium and Denamark in particular -- the two most consistently weak members of the European Monetary System -- have been forced to push up interest rates over the last year to well in excess of their inflation rates to maintain exchange rate stability against Wet Germany, which lately has been trying to catch up with the United States.
Svend Andersen, chairman of Denmark's central bank, told Washington Post correspondent Leonrad Downie Jr. that his country had raised interest rates up to a point he thought was high enough, only to discover everyone else was there, too.
"We though they were tougher than elsewhere," Anderson said. "But that is no longer the case," Denmark's prime rate is now 17.5 percent.
In West Germany and Swtizerland, two countries where historically low inflation rates have nurtured a deep public fear of anything different, the governments have gone further to prop up their currencies and lock out inflation.
Within the last month, Bonn suddenly started actively encouraging capital to flow into the country, in contrast to a traditional policy of preventing such moves. It did this by relaxing curbs on sales of fixed-interest securities to foreginers. The Swiss also eased restrictions on foreign Swiss franc holdings to attract money to Switzerland.
Only in Britain, where the pound in its new-found role as a petrocurrency has been strenghtened on foreign exchange markets, has the government been keen to push interest rates down to reduce its own borrowing costs, which last year reached $4.5 billion. To keep these costs in check, the government is expected to introduce a lean budget next week.
Some analysts note that the recent spiral in interset rates may represent overdue domestic changes in addition to being a protective move. Several countries in the past have maintained unrealistically low rates, cautious about raising them in order to avoid weakening the dollar.
In the meantime, inflation remains the nemesis of most of Western Europe's economies, brought on chiefly by soaring oil prices. Although European, inflation rates are widely divergent, ranging from 22 percent for Italy to under 6 percent for West Germany, hte rates are considered distrubingly high in each case.
Rising oil prices have had an unusually severe impact on West Germany. This has been demonstrated by the sharp deterioration in Bonn's current account balance of payments, which last year was negative for the first time in 15 years. This means the value of goods and services flowing out of West Germany was less than those flowing in.
This contrasts sharply with the West German experience after the 1973-74 oil price increase, when the country managed to finance the additional oil bill by expanding exports. This time, things have been much more difficult since the world economy is considerably less buoyant and the developing countries have not been able to make so large a contribution to sustaining the volume of world trade.
The economic stagnation predicted for the major industrialized countries this year coincides with a recent conservative shift in political leadershp in Western Europe. From Portugal to Sweden, voters have turned away from the left and instalaled conservative or centrist governments. In most cases, these governments rule with thin margins or restless coalition partners. Nevertheless, they have introduced cautious if unpopular, austerity policies.
The danger, say analysts, is that the current drive for delfation on both sides of the Atlantic could trigger a more serious recession, resulting in a sharp fall in production and trade.
In present circumstances, with some industries -- notably steel, textiles and autos -- already struggling with their own recessionary problems, this could well pose a far greater danger of a general return to protectionism than did the recession of 1974-75.
There is alredy talk inBrussels of a U.S.-Europena trade war brewing.