Madrid - DW
Borrowing costs for debt-stricken eurozone nations Spain and Italy have soared despite the loosening of monetary policy by thee major central banks. The ECB\'s interest rate cut has had no effect on investor sentiment. Ten-year Spanish bonds yielded 6.90 percent in early trading on Friday, bringing them dangerously close to levels seen before eurozone leaders last week announced a package of measures to curb the debt crisis. Italy\'s borrowing costs jumped too, with an interest rate crashing through the 6.0-percent barrier. The rise in yields on bonds from the southern European eurozone countries provided an indication that this week\'s steps by three major central banks to stabilize markets had been to little avail. China, Britain and the European Central Bank (ECB) had loosened their monetary policies, signaling growing alarm about the world economy. The ECB on Thursday cut its interest rate to 0.75 percent, the lowest level since the introduction of the euro in 1999. Market repercussions It also lowered the rate for its overnight storage facility, hoping that lenders would feel more inclined to grant loans to the private sector rather than parking huge amounts of money at the ECB. But despite the measures taken, investors remained largely unimpressed, sending borrowing costs for sovereign debt to levels almost unsustainable for Spain. Stock markets also remained unfazed across the continent, seeing major indices drop in early trading. Analysts said markets had already priced the ECB\'s rate cut and felt disappointed, because no clear indications were given by ECB Chief Mario Draghi as to whether the bank would soon pump even more cheap money into markets or get involved in buying up state bonds.