The universal experience of financial crisis management is that the longer one waits to resolve it, the more expensive the ultimate bill will be. In the eurozone we have reached that moment. Two months ago we used to say the worst things that could happen were that the crisis would extend to Italy and Spain; and the economic recovery would stall.

Now the crisis has extended to Italy and Spain, and the economy has slowed. The next plot point of the tragedy would be a return to recession. This is not a far-fetched scenario. Christine Lagarde, the International Monetary Fund’s managing director, warned with refreshing candour at the weekend that the risk of a recession was significant, and called for urgent policy action.

We are not quite there yet. But the crisis has reached such a force that it renders the existing resolution mechanisms defunct. The European financial stability facility was set up to handle small countries, such as Greece, Portugal and Ireland; it is useless as a mechanism to protect Italy or Spain. If you raised its lending ceiling to, say €2,000bn, France would stand to lose its triple-A rating. That in turn would have affect the EFSF’s own lending capacity, which equals the share of the triple A-rated countries.