Back in June, Greece and maybe even the eurozone itself seemed to be dancing on the brink. Greek parliamentary elections had failed to produce an outright winner, leaving the country effectively ungoverned and unable to fulfil the conditions of its rescue. And an anti-bailout party looked set to come out on top of the new poll. A unilateral sovereign default, which would have seen Greece ejected from the single currency, seemed the likely outcome. Worse, the financial shield the bloc had thrown around Italy and Spain to guard them from the panicking bond markets seemed as reliable as a chocolate fireguard. Many feared the union could be on the verge of meltdown.
Two months on, things feel different. The sense of impending doom has drained from financial markets. So what has changed?
Strangely, in the case of Greece, not that much. Indeed, things have actually worsened. Its economy is shrinking even faster than expected in June. The public cuts required to fulfil the terms of its bailout will now probably be even greater. The anti-bailout party was narrowly defeated by Antonis Samaras's conservative New Democracy party. But even the coalition led by the moderate Mr Samaras might not be able to deliver the requisite cuts. If, in September, Greece is deemed to be failing to deliver on its pledges by its international partners, the country could still be cut off and end up crashing out of the euro.
So why the improvement in the markets' mood? The answer lies with a perceived breakthrough at the European Central Bank. Earlier this month the Bank's president, Mario Draghi, spoke of a plan to buy up Italian and Spanish bonds, reassuring the markets that the central bank would do what was needed to keep the currency together. Now, even if Greece does default, many investors think that the broader union would be likely to survive.
But beware premature relief. The details of the bond-buying plan have yet to be revealed. And no one can be sure what the wider impact of a Greek default would be if it actually happened. Spain and Italy remain mired in deep recession and Eurosceptic populists are stirring in the latter. The euro's existential crisis has eased, but it is far from over.