European Central Bank President Jean-Claude Trichet startedbuying Italian and Spanish assets today in his riskiest attempt yetto tame the sovereign debt crisis.

Italian and Spanish bonds surged as the ECB entered the market,sending 10-year yields down more than 70 basis points. The eurorose to $1.4355 at 10:30 a.m. in Frankfurt from $1.4277 at theclose of European trading on Friday.

With governments failing to act swiftly enough to stop contagionfrom Greece's fiscal meltdown, it has fallen to the ECB to battle acrisis that's now threatening the survival of the euro. BuyingItalian and Spanish debt may require the ECB to massively expandits balance sheet and open it to accusations of bailing outprofligate nations, breaching a key principle in the euro'sfounding treaty and undermining its credibility. Germany'sBundesbank opposes the move.

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