video transcript

A year of change. That's how many Davos delegates look back on 2012 - including European Central Bank President Mario Draghi. SOUNDBITE: Mario Draghi, European Central Bank President, saying (English): "2012 was, to say the least, an interesting year. ... I think one would say it's the year of the relaunching of the euro." Draghi told the World Economic Forum audience he expects the euro zone to recover in the second half of this year. Although renewed positivity in the financial markets hasn't yet trickled down into the real economy. SOUNDBITE: Mario Draghi, European Central Bank President, saying (English): "Financial markets are experiencing a new restored sense of, I would say, relative tranquility. No matter which index you look, spreads, liquidity, corporate issuance, bond issuance, even sovereign spreads, volatility, all the indices point to a substantial improvement of financing conditions." But EU leaders are warning against complacency about the recovery. Enda Kenny is Prime Minister of Ireland, which currently holds the EU presidency. SOUNDBITE: Enda Kelly, Irish Prime Minister, saying (English): "Europe should now drive on during this period of calmness, if you like, when you don't have any talk of breakup of the euro or countries exiting the euro, and move on to implement the agenda that will mean an injection of confidence into the economies of Europe and potentially for increased trade and therefore job opportunities, because as I've often said, politics is essentially about people and their lives, and we've got 26 million unemployed in the European Union." Ireland and many of its European neighbours are in the middle of implementing tough reforms. The results are already evident, says Klaus Regling, head of the euro zone's permanent bailout fund, the European Stability Mechanism. SOUNDBITE: Klaus Regling, Head of European Stability Mechanism (ESM), saying (English): "Spain receives money from its European partners to restructure the banks, even that amount is much smaller than we thought six months ago, there was a politicial commitment to provide up to 100 billion, it looks like they only need around 40 billion, which is good news." Regling doesn't think Spain will ask for its long-anticipated sovereign bailout this year. But few believe Europe's recovery will be without obstacles. Britain's economy contracted by 0.3% in the last quarter of 2012 And Italy's third-biggest bank, Banca Monte dei Paschi, is at the heart of a new politically damaging trading scandal just weeks before an election.