The tide is turning in Europe. Austerity, long seen as the most appropriate medicine for the continent's debt-wracked economies, is fast losing favor, with increasing concessions being offered by Europe's policymakers to countries over loan repayments and deficit reduction.
On Monday, Greece became the latest country to clinch a deal with the troika on a review of its austerity program.
(Read More: The Euro Zone Crisis Is Back—On Multiple Fronts)
"We have a deal," Greek Finance Minister Yannis Stournaras told reporters in Athens, Reuters reported.
Meanwhile, Spain has requested more time from the EU to reduce its fiscal deficit in line with European rules.
A government source told Reuters last week that the country would now increase its 2013 deficit target to 6 percent of gross domestic product (GDP) and is negotiating with the European Commission for more time to cut its fiscal gap to 3 percent of GDP, currently targeted for 2014.
The request comes after European officials agreed last week to allow Ireland and Portugal seven more years to pay back their bailout loans.
(Read More: EU Offers Crisis-Hit Members Wiggle Room on Deficits)
Spain's Finance Minister Luis de Guindos told CNBC over the weekend that fiscal consolidation and growth had to be "compatible."
"We have to try to make both elements compatible," de Guindos said. "This is something that has been started to be considered in all the European countries," he added, denying that fiscal reduction and pro-growth policies were mutually exclusive.
"We have to reduce the fiscal deficit to put order in public finance that creates confidence in the country and simultaneously [ensure that] the fiscal reduction path is compatible with other measures in order to foster near-term growth," he said.
Spain is expected to be asked to speed up its reform program in return for more time from the EU and the Spanish government will have to present its stability plan and reforms to the EU before the end of the month.