These are exciting times in European central banking. Last Thursday the Swiss National Bank suddenly terminated its successful peg to the euro. This week the European Central Bank is expected to announce its programme of quantitative easing. The SNB has embraced the risk of deflation from which the ECB wishes to escape.

The SNB’s decision was motivated, at least in part, by aversion to being caught up in the ECB’s QE programme. For Mario Draghi, the ECB president, the SNB’s decision is even helpful, since it weakens the euro. For many in northern Europe, however, the Swiss decision will be painful. It will remind them that they no longer enjoy the pleasures (and pains) of a strong currency. The Swiss can readily stop shadowing the euro; the Germans have been imprisoned in it.

The surprise decision created turmoil. By January 20, the Swiss franc had appreciated by 18 per cent against the euro, the currency of its principal trading partner. With core inflation near zero, deflation in Switzerland seems inevitable. So does a recession.