THE EUROPEAN CENTRAL BANK eased off on its purchases of Spanish and Italian bonds last week, apparently satisfied that its intervention in the bond markets had staved off the prospect of an immediate crisis.

Bloomberg reports that data published this morning by the ECB showed how it had spent €14.3 billion buying sovereign bonds – almost certainly those of Spain and Italy – in the week ending August 19.

That compares to the €22 billion it spent on the previous week, when it agreed to splash out in a bid to stop the yields on Italian and Spanish bonds (in other words, the interest paid out by those countries on their national borrowings) from rising to unsustainable levels.

The intervention, on the face of it, seems to have worked: at the close of trading today Spain would have paid 4.964 per cent for a 10-year loan, down from 6.04 per cent on the last day of trading before the ECB programme kicked in.

Italy, meanwhile, would pay 4.974 per cent – down from 6.086 per cent before the ECB began to intervene in the market.

Both countries had seen their costs of borrowing skyrocket in the days leading up to the ECB’s intervention – fuelling fears that the two countries could be priced out of the money markets, leaving them reliant on EU-IMF bailouts to stay afloat.