ECB set to intervene in markets

The European Central Bank has confirmed it will intervene in financial markets today in a significant move to ensure stability in the Eurozone.

In a statement issued last night, the ECB said it will "actively implement" its Securities Markets Programme.

It did not specify what form its action would take, but it's understood it will buy up Italian and Spanish government bonds in a bid to stabilise the countries' shaky economies.

The decision to intervene came after an emergency conference of the ECB's governing body last night.

It followed a week of carnage on the markets as fears over the Eurozone debt crisis continued to cause chaos.

The market uncertainty continued this morning with falls recorded on Asian stock markets. Japan's main Nikkei index opened 1.4% down and US stock futures and crude oil prices have also fallen.

Friday saw shares slump globally, with trillions of dollars wiped off the value of global markets, after the US had its AAA credit rating downgraded for the first time.

Meanwhile the leaders of Germany and France are welcoming plans by Italy and Spain to cut their budget deficits and improve their competitiveness, and are urging “complete and speedy” implementation.

In a joint statement last night, Angela Merkel and Nicolas Sarkozy underscored their commitment to “fully implement” decisions taken by a summit last month to give the eurozone rescue fund expanded powers – allowing it to buy bonds on secondary markets.

The leaders said they stress the importance of the fact that “parliamentary approval will be obtained swiftly by the end of September in their two countries”.

Mrs Merkel and Mr Sarkozy welcomed the plans of Italy and Spain and said that Rome’s pledge to balance its budget a year before its previous schedule “is of fundamental importance.”