The EU’s bailout fund said yesterday it had successfully raised €1.5 billion at lower rates than its previous such operation, shrugging off turbulence on the bond markets. Demand for the six-month debt was high, with more than €3 billion worth of bids received, said Germany’s central bank, which organised the auction.

The yield, or rate of return to investors, on the paper was 0.1421 per cent. Last month, the yield at a similar auction was 0.2 per cent, suggesting investors are flocking to the fund, which is backed by European powerhouse Germany.

While the bond markets are punishing the likes of Spain and Italy, pushing their borrowing costs sky-high, the bailout fund – the European Financial Stability Facility – has continued to attract solid demand.

Three debt-wrecked eurozone countries have had recourse to EFSF funds: Greece, Portugal and Ireland.

Spain is also set to ask for some €100 billion in aid to recapitalise its banks but this is more likely to come from another fund, the European Stability Mechanism, which is due to come into force in July.