Most eurozone bond yields fell yesterday, including the cost of borrowing for the Irish Government, after ECB policy makers hinted at their readiness to modify or expand their unprecedented stimulus programme should market turbulence warrant further action.

A day after Mario Draghi presented a sobering economic outlook for the eurozone, the nervousness coursing through the ECB was underscored by a fellow policymaker.

Inflation in the eurozone may enter negative territory in the coming months but the European Central Bank will stick to its “steady hand” policy, ECB Governing Council member Ewald Nowotny said yesterday.

European Central Bank executive board member Benoit Coeure said bond purchases under the bank’s quantitative easing programme will aim to match the existing maturity profile of the market.

The European Central Bank (ECB) discussed a bond purchase programme with a volume of more than €1 trillion at its meetings this week, the German newspaper Frankfurter Allgemeine Zeiting (FAZ) reported yesterday.

Purchasing government debt comes with legal obstacles and it is no panacea for the eurozone economy, said ECB governing council member Jens Weidmann.

One of the European Central Bank’s chief decision-makers has all-but ruled out any rise in the eurozone’s key benchmark interest rate — from its current record low — for at least two years.

The Austrian government is beginning talks with the nation’s banks to gain their support for winding down nationalised Hypo Alpe-Adria-Bank International in a way that keeps it off the state’s books.

Austria must split off the bad assets of Hypo Alpe Adria Bank International by the end of March or face another capital injection for the nationalised lender, the central bank governor said.

There is no prospect for higher interest rates in the foreseeable future if the eurozone is entering a period of long-term stagnation, said Ewald Nowotny, ECB governing council member yesterday.

Major central banks’ reassurances that interest rates will stay low for some time are giving markets “a certain security”, an ECB policymaker said.

European Central Bank president Mario Draghi pledged yesterday to do whatever was necessary to protect the eurozone from collapse, sending a strong signal that inflated Spanish and Italian borrowing costs were in his sights.

Asian stock markets rose today amid hopes Europe will give its bailout fund more financial firepower but gains were tempered as South Korea reported its economic growth slowed to a two-year low.

There is consensus amongeconomic commentators that the European Central Bank is set to cut its rate by 0.25% tomorrow, in an effort to keep inflation in check.

On Tuesday’s Irish Examiner, it was reported that Ewald Nowotny who is a member of the ECB Governing Council had stated that European policymakers must avoid repeating a “single-minded” focus on austerity that helped bring the Nazis into power in the 1930s German economic crisis.

Tánaiste Eamon Gilmore has confirmed that the Government is pushing on two fronts to cut the cost of Ireland’s debt and annual €3bn interest payments.

European policymakers must avoid repeating a “single-minded” focus on austerity that helped bring the Nazis into power in the 1930s German economic crisis, European Central Bank Governing Council member Ewald Nowotny declared yesterday.

Leftist leader Alexis Tsipras gave up his attempt to form a government yesterday, pushing Greece closer to its second election in a few weeks, after voter rejection of an EU/IMF bailout plunged the country into crisis.

The European Central Bank (ECB) has made €530bn in low-interest loans to banks in the second round of a massive credit infusion that has been credited with easing the eurozone debt crisis.

EUROPEAN policymakers showed signs they were preparing new steps to cope with the region’s debt crisis even as talk of a possible Greek default gained pace yesterday.

Taoiseach Enda Kenny has been urged to consider reneging on the country’s debt as he prepares for this week’s emergency EU summit on the eurozone crisis.

FEARS still persist that the European Central Bank (ECB) will hike interest rates next month despite the turmoil in global financial markets.

ECB officials edged back from a threat to raise interest rates, saying markets have over-reacted to their change in tone on inflation.

EUROPEAN Central Bank president Jean-Claude Trichet said European governments should consider extending and broadening the region’s bailout fund, stepping up pressure on leaders to fight the fiscal crisis.

“A GOOD start, but more to do” was the response from Brussels on the Government’s four-year programme.