Is the moment of euro catharsis at hand? For months, the European Central Bank has resisted all blandishments to put its balance sheet decisively on the line to save the eurozone, insisting that it wasn't in its mandate to support government borrowing.

But with the eurozone now on the brink of a potentially serious recession and parts of the currency bloc now experiencing a severe credit crunch, the ECB believes the threat to monetary stability justifies much more radical action, according to someone familiar with the situation. But how far it is willing to go still depends on decisive political action.