ECB pledges new crisis tool to help indebted southern states
The European Central Bank promised fresh support for the bloc’s indebted southern rim, tempering a market rout that threatened a repeat of the debt crisis that almost brought down the single currency a decade ago. Government borrowing costs have soared on the 19-country currency bloc’s periphery since the ECB unveiled plans last Thursday to raise interest rates to tame painfully high inflation. But the bank failed to reassure investors it would contain the rise in borrowing costs, making only a vague pledge and stoking fears it was abandoning more indebted nations, such as Italy, Spain and Greece, which have struggled for years under the weight of massive debt piles.
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