The full extent of the European Central Bank's emergency operation to prop up Italy and Spain was revealed on Monday as it emerged that the Frankfurt-based institution went on a €22-billion bond-buying spree at the start of last week.
Faced by the prospect that the euro zone's third and fourth biggest economies were being dragged into the sovereign debt crisis that has already claimed three single currency members, the ECB announced that last week's purchases of Italian and Spanish debts had broken all previous records.
Analysts said the action had banished fears that the ECB - which earlier had shown reluctance to buy Italian and Spanish bonds - had been half-hearted in its support. But they warned that the bank would need to maintain the programme over the coming weeks or risk a fresh spike in bond yields in Rome and Madrid.
The leaders of France and Germany meet later on Tuesday for high-pressure talks to discuss what further measures they can take to shore up investor confidence in the euro zone following a dramatic market sell-off last week.
French President Nicolas Sarkozy and German Chancellor Angela Merkel are under pressure to show financial markets they are in agreement on doing more to shore up the embattled currency union - or risk watching the euro zone unravel.
The two leaders could discuss obliging all euro zone countries to pass national laws on deficit limits and the idea of a permanent euro zone spokesperson or coordinator.
Many experts believe the only way to ensure affordable financing for the bloc's most financially distressed countries would be for the euro area to issue joint euro bonds.
(Input from The Guardian and Reuters)