The European Central Bank's unprecedented cash injection is easing borrowing costs for Italy, Spain and Belgium, compensating for the lack of a solution to the debt crisis and the risk of recession.

Two-year Italian yields have dropped by 50 basis points and Belgian notes of the same maturity have declined by 22 basis points since Dec. 21, when the ECB supplied banks with 489 billion euros ($636 billion) of three-year loans. Short-dated Italian and Spanish debt outperformed AAA rated German and Dutch securities during that period.

“Short-term borrowing costs have come down significantly and that certainly helps to buy time,” said Jens Nordvig, managing director of currency research at Nomura Holdings Inc. in New York. “Six weeks ago, it looked as if there was going to be an imminent funding crisis, but that's averted by the ECB's money injection.”