The move to lower borrowing costs for Germany and the other eurozone countries came as Europe's monetary authorities remained concerned about the impact of the global financial crisis.
ECB President Jean-Claude Trichet had recently indicated the Frankfurt-based central bank would cut interest rates to help European economies find their footing, but the three-quarter of a percentage point was more than most analysts were expecting.
"Since September, there has been an intensification and broadening of the financial market turmoil. Tensions have increasingly spilled over from the financial sector to the real economy, and the world economy as a whole is feeling their adverse effects," Trichet said at a press conference in Frankfurt to explain the decision.
The ECB last lowered rates in November by half a percentage point after cutting them in October as part of a worldwide coordinated cut with the US Federal Reserve and other leading central banks.