Prodi, who served as Commission president from 1999 to 2004, said the European Central Bank's intervention on sovereign bond markets as well as recent decisions on banking union had put the euro zone back into safe territory.
"The danger of break-up is not on the table anymore," Prodi told EurActiv Germany in an interview.
However, he appeared concerned about Britain's future in the European Union, saying the country had become "more peripheral towards Brussels" as it gradually disengages from Europe and doggedly pursues an EU agenda focused almost exclusively on budget cuts.
Prodi showed sympathy towards British Prime Minister David Cameron. When asked whether the UK's threat to veto the EU budget was undermining the euro zone's efforts to overcome its sovereign debt crisis, he replied: "No."
"I do understand Cameron because his country is different from others. It is coherent with the Cameron doctrine that they do not want to take more part in the budget," Prodi said, noting the importance of the financial industry for Britain.
"But they will become less powerful and someday they will be in grave difficulties," Prodi predicted.
'Cameron will not stop Europe. He will simply get out of the room'
Speaking of Cameron, the former Commission President warned: "He will not stop Europe. He will simply get out of the room in which decisions are being made."
Since Britain's veto on the EU's fiscal treaty in December last year, senior EU and politicians now seem to accept that Britain should be left to cuts ties from the rest of the continent.
Alex Stubb, Finland's Europe minister, summarised the dominant feeling among his colleagues at an EU summit last week when he said: "I think Britain is right now, voluntarily, by its own will, putting itself in the margins".
"It's almost as if the boat is pulling away and one of our best friends is somehow saying 'bye bye' and there's not really that much we can do about it," Stubb told Reuters.
German elections set to delay major decisions
Meanwhile, Prodi said the election of François Hollande in France meant the end of the Franco-German duopoly at EU summit meetings, embodied by the 'Merkozy' couple.
"Now we have a much more complex situation in which France is sometimes linked to Italy and Spain, sometimes to Germany. There is much more mobility in the decision-making process. From this point of view Europe is coming back."
The former Italian Prime Minister also said he did not expect any major decisions to be taken until the September 2013 general election in Germany.
"We must give the German people time to meditate on this," Prodi said when asked about Berlin's resistance to Eurobonds that would mutualise parts of European debt. "At least until after the elections".