As European markets opened on Monday yields on Spanish and Italian bonds saw a sharp fall to 83 and 79 basis points respectively following an intervention by the European Central Bank. The ECB backed up its promise to expand its purchases of sovereign debt to support Madrid and Rome by entering into European bond markets to buy their respective bonds in an attempt to steady the markets.

“The ECB will actively implement its securities markets programme. This programme has been designed to help restore a better transmission of our monetary policy decisions, taking account of dysfunctional market segments, and therefore ensuring price stability in the euro area,” the ECB said in a statement late on Sunday.

Previous bond purchases had been restricted to countries that received a bailout including Portugal, Ireland and Greece but fears that rising bond yields could force Italy and Spain to seek a bailout triggered ECB involvement.

“The Governing Council welcomes the announcements made by the governments of Italy and Spain concerning new measures and reforms in the areas of fiscal and structural policies. It considers a decisive and swift implementation by both governments as essential in order to substantially enhance the competitiveness and flexibility of their economies, and to rapidly reduce public deficits,” the ECB said.