The European debt crisis has passed. The introduction of austerity measures, tax hikes and public sector pay cuts by eurozone governments has helped to successfully quell worries and slash public deficits in the region.
At least, this is the view of Spanish prime minister Jose Luis Rodriguez Zapatero, speaking to the Wall Street Journal earlier in the week.
The European debt crisis emerged late last year after Greece's new government announced that the country's public deficit would be equal to 12.7 per cent of its GDP - or more than twice the previously published figure. The news sent shockwaves through the investment world and sparked doubts over the ability of Greece and other highly indebted nations of the eurozone to slash their deficits.
However, Mr Zapatero said the publication of EU-wide bank stress tests at the end of July along with the progress already made in reducing deficits had helped restore market confidence.
"In spite of the real estate crisis, banks stood like rocks due to solid provisioning and the strictest bank supervision within the eurozone," he said. "There's a contradiction in perceptions, because Spain's financial system has been among the best resisting the crisis within the euro zone."