At least it took a few days before the Paulson plan for bailing out America's banks descended into political bickering. President Sarkozy's proposal for a European bailout fund was hijacked even before it was unveiled.

The conspiracy theorists suggested a leak from the Germans who immediately made clear they were opposed to the idea.

But Mr Sarkozy does have a point. After being mainly spectators of the Anglo-American bank meltdown, European governments suddenly find themselves centre stage.

So far this week, two huge European institutions have been rescued - Fortis and Dexia - the Irish Government has moved to prevent a run on its banks and now the Italians are facing a crisis at UniCredit.

In many ways, Europe's problems are trickier. Many of Europe's top banks are much bigger in relation to their home country's financial resources than in the US. And many have significant cross-border operations, which makes co-ordinating rescues difficult.

Difficult, but not impossible, say other European politicians pointing to the Fortis and Dexia efforts.

A rescue fund is one of a number of ideas put forward by Mr Sarkozy, which include a suspension of “mark-to-market” accounting rules that many banks argue have exacerbated the crisis. This idea has plenty of support in Britain not least from the Tory leader David Cameron.

But if Mr Paulson had a challenge getting his plan agreed by Congress, that is nothing compared with the task Mr Sarkozy faces.

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