REFILE-UPDATE 1-ECB goes to Italy's rescue with oversized bond-buying in March

(Fixes typo in headline)

FRANKFURT, April 6 (Reuters) - The European Central Bank came to Italy’s aid in March, effectively ditching its own rulebook to focus its bond-buying on Italian debt as the country became the global epicentre of the coronavirus outbreak, data showed on Monday.

The oversized Italian purchases completed a turnaround for the ECB. Its president, Christine Lagarde, drew a fierce backlash last month by saying it wasn’t the central bank’s job to help countries struggling on the debt market, before then correcting herself.

Italy accounted for 35% of the 33.75 billion euros worth of national bonds bought by the ECB under its five-year old Public Sector Purchase Programme, giving it the lion’s share at Germany’s expense.

The ECB had set out to buy sovereign bonds in proportion to each country’s quota in the bank’s capital, which should give Germany the largest share followed by France and Italy.

Germany, the euro zone’s largest economy, accounted for just 6% of ECB purchases, while Spain and France were overbought, albeit less than Italy.

These purchases are largely carried out by national central banks, which keep the bonds - and any profit and risk associated with them - on their own balance sheet.

The ECB also bought 30.2 billion euros of bonds in the initial week of its Pandemic Emergency Purchase Programme (PEPP), a parallel scheme which started on March 26 to keep credit cheap for governments.

With much of Europe’s economy in lockdown, the block is heading for a deep recession and public spending is likely to balloon as governments dish out cash to maintain jobs.

The ECB hasn’t provided a country breakdown for the PEPP, which also includes Greece despite its low credit rating. (Reporting by Balazs Koranyi and Francesco Canepa Editing by Gareth Jones)