European leaders are stepping up shuttle diplomacy this week as they brace for their central banker’s plan to defend the euro from bond-market turmoil.
European Union President Herman Van Rompuy is traveling to Berlin for talks with German Chancellor Angela Merkel today as Italian Prime Minister Mario Monti welcomes French President Francois Hollande to Rome. They were given a hint about what may be in store when European Central Bank President Mario Draghi said yesterday he would be comfortable buying three-year government bonds to aid nations struggling to fund themselves.
The yield on Italian 10-year bonds declined 3 basis points to 5.74 percent. That’s still 434 basis points more than the yield on similar maturity German bunds. Spain’s 10-year bond yields fell 6 basis points to 6.79 percent, near the 7 percent level that led Greece, Portugal and Ireland to seek bailouts.