From afar, the economic crisis in Europe seems like a puzzling and sometimes amusing sideshow.

Those crazy Greeks, rioting because they can no longer retire at 55 with a full government pension!

Unfortunately, what happens in Europe doesn't necessarily stay in Europe. And that's already proving bad news for a U.S. economy struggling to generate meaningful job growth.

Maplewood-based 3M, one of the most accurate bellwethers for the global economy, missed its earnings target for the three months ended Sept. 30 in part because sales in Western Europe fell 4 percent.

Golden Valley-based Pentair, which gets about 14 percent of its sales from Western Europe, lowered its profit forecast for the fourth quarter because of weaker demand from that part of the world.

While sales in Europe remained strong for Minneapolis-based Graco during the same period, CEO Patrick McHale turned cautious when asked about the coming months. "I'm still concerned about Western Europe," he told analysts recently. "A person would be wise to be watching that carefully."

Europe may not offer the growth prospects of Latin America or China, but it remains vital to the fortunes of American companies, which exported about $300 billion worth of goods and services to the continent last year.

The European Union and U.S. economies account for about a third of world trade flows. Minnesota companies exported $4.2 billion worth of goods to all of Europe, with all but $300 million of that total going to the E.U.

Europe's immediate crisis is the fear that Greece or Italy might be unable to make payments on their debts. But it's the response to that prospect that's currently hurting the income statements of American companies.

Governments across Europe have slashed spending, cut jobs, raised retirement ages and trimmed pensions. Some countries, notably Great Britain, have embarked on these austerity measures voluntarily. Others, including Italy, Spain, Greece, Ireland and Portugal, have done so to qualify for bailout money that might help them avoid defaulting on massive government debts.

Some of these austerity measures, such as requiring people to work past the age of 55, could ultimately help productivity and economic growth. Right now, though, consumers have less money and are less willing to spend what they have. Best Buy experienced this firsthand in Great Britain, where it once planned to open up to 200 stores. It got to 11 before announcing its retreat from Europe on Monday.

Consumers' lack of confidence has trickled down the line to Europe's manufacturing sector and is beginning to drag down economies across Europe. Great Britain has lowered its economic growth forecast for 2012. Germany's industrial production in September fell by the biggest amount since 2009, and the economy of Europe's richest country is now expected to grow less than 1 percent next year.

Even that might prove optimistic. Last week, the new chief of the European Central Bank, Mario Draghi, cut interest rates in a bid to spark economic growth. But he warned that the eurozone could be heading into a "mild recession by year end."

American companies wouldn't be the only ones to suffer. Europe is China's biggest export market, while China is one of the fastest-growing export markets for U.S. companies. Minnesota exports to China in 2010 surged 45 percent, to $1.8 billion.

In our daisy-chain economy, Chinese companies that make less money from Europe will have less to spend on American goods and services.

It may be too early to say this will happen. Much of the attention to date has focused on the prospect that Greece or Italy might default on their debt and, in the process, capsize some of the world's biggest banks and fracture the E.U.

But the worst-case scenario isn't the only bad one. • 612-673-1736