The ECB has taken a new attitude toward the eurozone debt crisis. It has suggested it may support some of the region’s weak economies as they issue debt, perhaps through the purchase of some of this paper.
The central bank has made it clear that it will not act unless many of the EU nations agree to very strict budget terms. French president Sarkosy has begun to work to give assurances.
If the banks begins to intervene, it would be a change of heart brought on by the deepening crisis. Until now the ECB has said its only role in the region is to fight inflation. That would change radically if it began to aggressively buy debt issued by Italy and France. This would probably drive down rates and allow the countries to present budgets that the global capital markets would accept. In turn, investors would be more likely to buy sovereign paper at lower yields
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