European Central Bank President Mario Draghi said on Friday that financial markets are experiencing "relative tranquility" at the start of this year and all the indices point to a substantial improvement of financing conditions.
"The level of economic activity is in the process of stabilizing at very low levels and we foresee a recovery in the second part of the year," Draghi said at the World Economic Forum in Davos.
He praised the structural reforms pursued by euro zone governments and said 2012 had been the year of the "relaunching of the euro."
"If one has to find a common denominator for defining the greatest event of 2012, or why 2012, is going to be remembered, I think one would say that it's the year of the relaunching of the euro."
"Current accounts are turning into surpluses, fiscal positions are generally better," Draghi said. "Governments ought to be given credit for what they did."
The ECB cut rates three times in 2012 in the hope of getting the economy moving again. It also launched two long term refinancing operations, known as LTROs, to inject cheap liquidity into euro zone banks.
Those measures prevented a "major funding problem which could have had unexpected and dramatic consequences on the financial system," Draghi said.
At the end of July the bank announced its bond buying program known as Outright Monetary Transactions (OMT).
Draghi said "the jury is still out" as to whether the bank was satisfied with that program.
"We haven't seen an equal momentum on the real side of the economy, and that's where we will have to do much more" he said.