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Brussels. — THE European Central Bank (ECB) took the unprecedented step on Wednesday of buying corporate bonds, its latest weapon in a desperate battle to kick-start sluggish growth and inflation in the eurozone. Having already slashed key interest rates to less than zero and pumped massive amounts of cash into financial markets, it started to directly finance businesses by buying their debt in the bond market.Purchases included securities issued by Anheuser-Busch InBev, the world’s largest brewer; Telefonica, Spain’s former telecommunications monopoly; Siemens, Europe’s biggest engineering company; Assicurazioni Generali, Italy’s top insurer; Telecom Italia; French car maker Renault and utilities Engie and RWE, according to sources authorised to speak about it.

ECB chief Mario Draghi hopes the scheme – set to be worth billions of euros every month -will deliver the financial medicine directly where it is needed, to Europe’s major public corporations.

The bank wants companies to use the extra cash to boost investment, creating jobs and growth in the flagging 19-country currency bloc.

With prices currently falling, the ECB hopes to raise inflation back to close to 2 percent, a level it deems healthy for growth.

In a sign the ECB’s shopping spree was having an effect, traders said bond yields – which are inverse to their prices – fell to fresh lows in the eurozone corporate bond market on Wednesday, while the yield of the benchmark 10-year German Bund was hovering at a record low at just above zero.

Critics charge that the ECB is overstepping its mandate by lavishing billions on corporate giants, and say that it could be distorting markets and creating bubbles.

Some also fear that large companies – which already have access to cheap money thanks to rock-bottom interest rates – could be tempted to use the extra liquidity for risky merger and takeover gambles.

To kick-start lending in the bloc, the ECB has already made unprecedented amounts of ultra-cheap loans available to banks and embarked on a major asset purchase programme known as quantitative easing.

It has beefed up that scheme from €60bn to €80bn a month until March 2017.

Having so far bought government bonds, the bank is now also buying euro-denominated, investment grade corporate bonds.

Many analysts are betting on a monthly purchase volume of €5bn-€10bn.

The ECB has said it will not buy bonds issued by banks or bank subsidiaries – but it can buy bonds of, for instance, a car company such as Volkswagen that operates an “internal bank”. It has also said that it will be able to hold on to bonds, even if the companies’ ratings are downgraded to sub-investment grade. — AFP, Bloomberg.