The heavy lifting in the eurozone bond markets has started. Athens paved the way for one of the country's most important capital-raising exercises with a further effort to convince investors of its commitment to fiscal tightening. A fresh set of budget consolidation measures, the third since January, met with positive noises from the currency bloc's members, helping the eurozone's peripheral rate markets to stabilise. The spread between Greece's 10-yr bonds and German Bunds is 75-100 basis points narrower than at the beginning of February, putting Athens in a better position to commence efforts to refinance €20bn of debt falling due in coming weeks.

Greece yesterday duly piled back into the capital markets, with Athens launching its first bond deal in more than a month. This has the makings of a turning point in the country's debt crisis. The issue of €5bn of 10-year maturity bonds is the most significant benchmark debt deal so far this year, even if the state of public finances across developed markets means it may not keep that record for long. Nonetheless, a successful take-up should reassure investors. Early signs of demand in excess of the face value of the securities were encouraging, putting off the need for immediate recourse to the International Monetary Fund.

Optimists believe there is now little prospect of the Greece débacle causing lasting damage to the fragile European Monetary Union. Allianz notes the eurozone as a whole fares relatively well against other large economies, with debt at 78.2 per cent of gross domestic product. Japan's debt ratio of around 190 per cent is substantially higher and the US's 83.1 per cent also exceeds the euro area's. But with Spain, Ireland and the UK all planning unprecedented tightening, coming years will be a monumental test of political courage for all European leaders.