But stupidity and the desire to survive the next moment, even if it guarantees worse later, is the essential weakness of almost all of our ruling political class.

I think the German's would let Commerz go if it came to it. Hypo is their AIG. Deutsche is their Too big to fail.

I think we have to be open to the possibility that Germany will sacrifice Europe if it has to rather, than risk all. I don't hold this against them.

But events rule now, not logic.

On the personal qualities of Mr. Trichet, I have no opinion, but he probably cannot ignore that the institution he heads can be wiped out, and with it the political project that is Europe (and he himself dismissed and shamed). Letting ordinary banks fail should appear to be of lesser gravity.

Such "raison d'etat" should also weigh heavily for Merkel, better have banks go under than nations and transnational projects, even German banks.

Yes, the devaluation scenario of the Euro may appeal to the Germans – but they are perhaps equally much apalled by the inflation that follows. What sentiment is the strongest?

I think (i. e. hope) that somebody in command will see that the line must be drawn somewhere, sometime, and now is the time.

Don't look to Trichet. I think he is weak. I think he will be forced out the moment Merkel calls his judgement into question.

Look to Germany. Yesterday Merkel stood up and said – my words not hers, but her sentiment – 'We are Europe. What Germany says is what Europe does. They all look to us for our money. Therefore we decide for Europe.' And she is right.

She has to decide should the ECB bail out Europe's banks and probably risk its own destruction? Or should Germany tell the ECB to stand firm. She will do this if she thinks Germany's banks will survive better than anyone else's.

Or she may think to gamble on the EBC managing to QE, keep everyone afloat and somehow still save the euro from destruction.

She may even think, it has occurred to me, that she gambles on ECB QE and then devalues the entire EUro. This I think would work potentially to Germany's favour.

Especially because her get out option is if it all blows up she print Duetsche Marks, withdraws and closes the borders.

Nuclear options indeed. But only a fool wouldn't have thought them all through.

What thinkest thou?

Have you seen PNB Paribas shares this morning? Profits and sahres up. I wonder how much of the share rise is due to profits and how much to the ECB decision. PNB say they have negligible exposure to Greece. Either they sold – who bought it? – or they mean negligible because they can now unload it at the eECB.

This rule applies to all banks. Any bank who holds Greek bonds may now use them as collateral. It is clear, therefore, that this action was taken not just to bail-out Greek banks but to save other European banks as well – PNB Paribas has €5B of the stuff. What is left of Fortis (The Insurance company) in Belgium still has €4B round its neck. Their shares lost 10% recently.

Of course European parts of US banks will be quick to use the facility.

It will be a turning point one way or another. The ECB does not yet have the power within Europe to withstand the pressure being brought to bear on it by those governments whose banks would collapse – ie France and Germany. If Trichet was a braver man maybe. But he is not brave enough.

Of course the ECB know. But is there a politician who cares about this longer game? Or would they all prefer to survive today and let damnation catch up with them later?