According to the recent Financial Stability Review by the European Central Bank (ECB) many euro area large and complex banking groups returned to modest profitability in 2009, and their financial performances have continued to strengthen in the first quarter of 2010. These developments, which also include backup funds well above pre-crisis levels, suggest that most of these institutions have made important progress on the road to financial recovery.

The measures taken by the ECB to stabilise markets and restore their functioning as well as the establishment of the European Financial Stabilisation Mechanism should mean lower risks. However, sizeable fiscal imbalances remain, and the responsibility rests on governments to help ensure consolidation enabling the sustainability of public finances, while establishing conditions conducive to durable economic growth.