EU leaders to unveil €750bn bond purchase plan for Spain and Italy

Governments across Europe are set to buy Spanish and Italian bonds through two European rescue funds, a move the ECB hopes will send a signal to financial markets that Germany is behind the eurozone.

Under the proposed deal, the €500bn European Stability Mechanism (ESM) and the European Financial Stability Facility (EFSF), which now stands at €250bn following the bailouts of Ireland and Portugal, will be able to buy bonds issued by beleaguered European countries, the Telegraph reports. The ECB previously bought about €210bn of bonds in this way but stopped last year. At this week's G20 summit, Angela Merkel and other European leaders have come under intense scrutiny to take radical action to contain the growing euro crisis which has pushed up the cost of Spanish bonds to unsustain...