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Row over ECB's bond move

THE European Central Bank's move into the Italian bond market has created a chasm between it and the Bundesbank.

Bundesbank chief Jens Weidmann, the most powerful of the national central bank chiefs on the ECB's Governing Council, has strongly disagreed with the move.

Germany's Bundesbank, under then president Axel Weber, opposed the ECB's initial decision to start buying the bonds of distressed euro-area governments in May last year, opening a rift with ECB president Jean-Claude Trichet and other ECB policy makers.

So while the intervention has brought down the yield on Italian and Spanish bonds, it has left Trichet with a rift to heal on the ECB's Governing Council.

The intervention, agreed during a conference call late on Sunday, was a watershed moment for the bank.

The eurozone's third largest economy, Italy has one of the world's highest levels of public debt -- around 120pc of gross domestic product.