EU leaders work to save Italy and Spain

EU leaders and their economic experts were working late into the night to come up with some confidence-building measures to help Spain and Italy, now in danger of being shut out of the markets.

A range of measures that could be implemented immediately were on the table, but the member states were deeply divided over all of them, with German chancellor Angela Merkel dismissing pleas from Rome and Madrid before the meeting.

Finland put a new idea into the mix with a proposal for covered bonds — where countries would put up assets such as government buildings, and allow the bailout fund, the ESM, to buy them if demand was weak.