Outlook: Trichet has been badly let down by the eurozone

Jean-Claude Trichet must be counting the days. His term of office as President of the European Central Bank comes to an end in October (that's assuming there is no succession crisis because his planned replacement, Mario Draghi, opts to stay in Italy to sort out the problems there). In the meantime, he is spending every day defending a policy in which no one thinks he really believes.

It was clear from Mr Trichet'spronouncements last Thursday that the ECB did not want to intervene in the secondary debt markets. Mr Trichet's careful remarks convinced precisely no one that the ECB would act and as soon as it becameapparent that the bank was not buying Italian or Spanish bonds, there was a rout.

That prompted a rapid about-turn, but note that Mr Trichet has since refused to deny the suggestion that the ECB gave way only after extracting promises of reform from theItalians. It was also clear from the interviews given yesterday by Mr Trichet that he still regards this as a political matter.

He is right, of course. For the story of what has happened over the past few days is really one of politicalinaction. The job of buying bonds to support eurozone countries under attack was delegated to the European Financial Stability Facility at last month's emergency summit. But Europe's political leaders promptly left for their holidays before getting round to ratifying the deal in their domestic parliaments.

The peace held for a week or so because investors' attentions were on the US debt ceiling crisis, but as soon as a deal on that issue was struck, the focus returned to the eurozone. If the EFSF wasn't yet in a position to buy bonds, investors demanded to know, would the ECB do so in the meantime?

From such trivialities spring great dramas: the markets filled the political vacuum in the eurozone and, by the time the ECB was forced to respond, it was too late.

The woes on the debt market have since been substantially eased by Mr Trichet's actions – we saw yields on eurozone bonds slip back again yesterday – but for the stock market, where the eurozone debaclecoincided with the S&P downgrade of the US, it was harder to turn back the clock.

The depressing thought is that if Europe's leaders did not understand the urgency of ratifying the extension of the EFSF's powers, a relatively technical matter after all, the chances of them addressing the more fundamental issues any time soon seem pretty remote. Moves towards much closer fiscal union, the only hope for the long-term future of the euro, seem no nearer today than a week or a month ago.