Baku, July 28 (AZERTAC). On the face of it he buckled. Just two weeks after he insisted publicly "we say no to selective default," European Central Bank President Jean-Claude Trichet agreed to a deal forged by the leaders of Germany and France that will result in exactly that.

Was he bullied into a U-turn? Another about-turn would look terrible for the ECB, which compromised its principles in May last year by agreeing to buy government bonds despite saying four days earlier it was not even discussing the option.

But a closer look at the detail of the deal struck in Brussels last Thursday shows the outcome is far more nuanced than a simple `loss` for the ECB on the selective default issue.

Trichet conceded on that point but in doing so he won a broader deal that pushed the cost of tackling the crisis onto governments -- along with a private bondholder contribution that was ringfenced in such a way as to limit the contagion threat.