Europe Gets Some Reassurance in Auctions of Debt Alex Domanski/Reuters Mario Draghi, the European Central Bank's president, indicated he was prepared to take further steps to ease credit, if necessary. BERLIN - Solid government debt auctions in Italy and Spain on Thursday indicated that efforts by the European Central Bank to avoid a regional credit freeze were continuing to show at least short-term benefits. And while the central bank left its benchmark interest rate unchanged at 1 percent Thursday, the bank's president, Mario Draghi, indicated he was prepared to take further steps to ease credit, if necessary. The Italian Treasury found brisk demand Thursday in selling 8.5 billion euros ($10.9 billion) of 12-month bills at an interest rate of 2.735 percent. It was the lowest interest rate Italy has been able to sell one-year debt at since an auction in June - and less than half the 5.952 percent Italy had to offer at the last sale, in early December. In Madrid, the Spanish Treasury said Thursday it sold a total of 10 billion euros ($12.8 billion) of bonds - twice the amount it had set as a target - with yields down from previous auctions. For example, $4.3 billion in three-year notes were sold at a yield of 3.384 percent, compared with 5.187 percent in December for three-year notes. Both Spain and Italy have been under intense pressure from investors because of their public finances, with recently installed governments scrambling to push through additional austerity packages to rein in deficits and debt levels. Both countries" longer-term debt yields, which reflect higher risk and uncertainty, remain relatively high. Another bellwether of the crisis comes Friday, when Italy tries to auction more than $9 billion in longer-term debt. The question remains whether enough investors will bid on that debt and feel confident enough in Italy's fiscal health to justify declining yields. The interest rate on Italy's 10-year debt has dipped to 6.6 percent from 7.1 percent earlier this week, though it is still unsustainably higher than the 4 percent to 5 percent it traded at for much of the last two years. But Thursday's solid auctions were the latest sign that shorter-term government debt has become more attractive to commercial banks and other investors since the central bank last month began a program of offering low-interest three-year loans to commercial banks in the euro currency region. While a large portion of that money has been used simply to pay off other lenders, it has clearly eased pressures on the banks and helped free up cheap money the banks can use to purchase sovereign debt. "We do think this decision has prevented a credit contraction that would have been much more serious," Mr. Draghi said Thursday. He said the central bank would continue to support commercial banks in the euro zone and predicted that the bank's next refinancing operation, in February, would attract even more lenders. The central bank, based in Frankfurt, left its benchmark interest rate unchanged Thursday, after having cut rates by a quarter point twice since Mr. Draghi became its president at the beginning of November. The rate cuts have been meant to help slow an economic downturn in the 17 countries in the European Union that use the euro. Mr. Draghi said the bank was pausing in its rate cutting amid what it called "tentative" signs of increased economic stability. But he indicated the central bank was prepared to take further steps, if necessary. Analysts took Mr. Draghi's comments as a clear sign that the central bank stands ready to reduce its benchmark interest rate below the already historic low of 1 percent to counter a recession. "He kept the door open," said Jacques Cailloux, the chief European economist for Royal Bank of Scotland. He made a very clear statement that the E.C.B. stands ready to act. Earlier Thursday, in London, the Bank of England kept its benchmark interest rate at a record low of 0.5 percent as the British government's tough fiscal measures and the crisis in the euro zone exacerbated economic problems. The Bank of England also voted to continue with its existing bond purchasing program of £275 billion ($422 billion). Many economists expect the British central bank to expand the asset-buying program at its next meeting in February in a bid to pump more capital into the economy. Some economists expect the central bank to move as early as next month for a rate cut. But others predict that the governing council will hold off until March, when a fresh growth forecast for the euro zone is to be issued. Reporting was contributed by Julia Werdigier from London, David Jolly from Paris and Raphael Minder from Madrid.