Mubasher: Current and former officials at the European Central Bank (ECB) warned against the consequences for Italian bonds after ending its asset purchase programme.

The Italian central bank, under the guidance of the ECB, is the largest buyer of the country’s debt, Governing Council member Ewald Nowotny said on Tuesday, raising the question of who would buy the nearly EUR 275 billion ($312.4 billion) of government securities to be issued next year.

“What we see is that markets are reacting, yields in Italy have gone up,” Nowotny said, adding that “it may become more difficult to cover Italy’s financing needs in the near future.”

The ECB’s plan to end expanding its balance sheet after this year could place Italy in weak spot, former Irish central bank governor Patrick Honohan said.

“When this support is removed, the yield on Italian government bonds will be much more vulnerable,” Honohan added.

Italian bond yields jumped this year as Rome’s populist government tried to push through a high-spending budget, breaking the European Union (EU) rules, triggering concerns over the sustainability of public finances.