Amid anti-austerity protests across the continent, European Commission president José Manuel Barroso said this week that austerity had reached its limit of popular support, a view echoed by Olli Rehn, EU Commissioner for Economic and Monetary Affairs.

"This slowing down of the pace of fiscal consolidation has been made possible by three factors: first, the increased credibility of fiscal policy which euro-area member states have achieved since 2011; second, the decisive action the ECB has taken to stabilize markets; and third, the reform of EU economic governance."

Simon Tilford, chief economist at the Center for European Reform, a London-based think-tank, there is a growing acceptance that austerity hasn't worked.

"Lots of European countries are chasing their tails," he said. "They are cutting public spending at a time when businesses are not investing, and consumers are not consuming."

An easing of austerity does not mean a sudden change in big government spending, says Tobias Blattner, chief European economist at Daiwa Capital Markets, the investment banking arm of Japanese brokerage Daiwa Securities Group.

"Everybody still wants and thinks that fiscal consolidation should be the aim and is exactly the right policy," he said. "But I think, as the European Commission president said, this should be done at a much slower pace in order to ensure social cohesion."

Meanwhile, Spain's unemployment figures have reached more than six million, over 27 percent of the workforce — the highest since the country's transition to democracy in 1976.