We've been here before during the euro crisis, but never have they taken brinkmanship quite this far. The head of the Central Bank of Cyprus, the splendidly named Panicos Demetriades, has just warned that today is decision day as to whether his country will stay in the Euro. There's no reason to believe he is wrong.
This is the latest state of play: The European Central Bank says it will cut off all cash to Cyprus on Monday unless Brussels agrees that the bailout of Cyprus and its banks can go ahead. Brussels, in the form of the so-called Troika, says that as things stand there will be no bail-out. The Cypriot Parliament is due to vote this afternoon on a package of measures that the EU has already deemed insufficient to get the job done. Moscow is staying well clear - there will be no one riding to Cyprus's rescue from the East. The banks are still closed, and without a breakthrough there is no chance of them re-opening next week.
It is baffling that it should have come to this over such a relatively trivial sum of money: €5.8 billion. Hundreds of billions have been spent already bailing out Greece, Portugal and Ireland, and another €100bn has been earmarked for Spain. And yet, for a fraction of that, it seems that they are prepared to allow the first exit from the Eurozone and all the disruption that will follow. The reason it has come to this is discipline.
Berlin has only been prepared to sanction the programme of bailouts if the recipients agree to terms laid out by Berlin and Brussels, and then stick to them. So when, last weekend, they agreed to stump up €10bn of (mostly) German taxpayers money they added a raft of conditions. But for the first time a nation in Southern Europe said no. Which for Angela Merkel is a problem.
Allow the Cypriots to get away with defying the paymasters and soon they'll all be doing it. Greece came very close last year, but Europe called their bluff. Italy has just voted decisively against austerity, but it's still not clear that a new Government (when it gets a new Government) will be as robust as the electorate. Letting Cyprus leave the Eurozone will certainly be problematic; letting Cyprus dictate the terms of its own bailout may be even worse in German eyes.
So we wait to see who blinks, and if nobody has backed down by Monday morning, the magic money tap that flows from the ECB's headquarters in Frankfurt to the banks in Nicosia will be shut off, and not even the over-worked cash machines outside this country's shuttered banks will produce any cash. In order to function, Cyprus would have to print its own money, as it is not allowed to print Euros, that money would have to be Cypriot Pounds. That's how close we are.
Such an outcome would be so self-destructive to both sides in this stand-off that it is still hard to believe it will come to that. The Eurozone has been pretty cack-handed during this crisis, but the one thing it is good at is finding a last-minute fudge to keep the show on the road. Don't bet against another one being found before this weekend is out, but they are leaving it very late.