video transcript

The currency is getting a facelift, but what about the economy? The ECB showed off its new 5 euro note - the first in a series of replacements for the 14 year old currency - after it held interest rates at a record low of .75 percent. Europe may still be in recession, but according to the bank's president Mario Draghi, it could be about to get better. (SOUNDBITE) (English) PRESIDENT OF THE EUROPEAN CENTRAL BANK (ECB), MARIO DRAGHI, SAYING: "Later in 2013, the economic activity should gradually recover. More recently, several conjunctural indicators have broadly stabilised, albeit at low levels and financial market confidence has improved significantly." The relaxed atmosphere in Europe today a far cry from last summer's panicked markets. The fiscal cliff conclusion in the US and a reassuring earnings season is boosting demand for riskier assets. The FTSE 100 hit it's highest level since May 2008, but how long will the bounce last? Rob Carnell from ING warns this may not be the recovery it appears. SOUNDBITE (English) ING CHIEF INTERNATIONAL ECONOMIST ROB CARNELL, SAYING: "It's very much a confidence driven effect and confidence can disappear rather quickly on the flimsiest pretexts. so whilst it looks quite good for now it's perhaps not the strongest most resilient of recoveries in the equity market that we'll have ever seen." Concern over Spain's previously held policymakers over a barrel. But it seems for now at least the gun's not loaded. Spain's kicked off a tough funding programme for 2013 with a strong debt auction - selling nearly 6 billion euros of bonds as borrowing costs continue to fall. But Mike Ingram from BGC Partners doubts it can hang on much longer without a bailout. SOUNDBITE (English) BGC PARTNERS MARKET COMMENTATOR MIKE INGRAM, SAYING: "Perhaps in the first three or four months of this year, it'll be clear whether or not the Spanish budgetary situation is under control. I don't think it is quite frankly. and whether or not Spain is going to need to activate the OMT and all the conditionality that's going to be associated with it." Elections in Italy and Germany are also potential banana skins. Markets are calm for now, but a return to volatility can't be ruled out.