TIMELINE – Euro zone debt crisis


Reuters | Tue Jul 13, 2010 | 2:48pm IST

Here is a timeline of events in the euro zone debt crisis in reverse chronological order:

July 13 – Moody’s cuts Portugal’s debt rating by two notches to A1 citing rising debt and weak growth prospects, and says the country may need more austerity measures in its 2011 budget.

July 8 – Greece’s main private and public sector unions strike for 24 hours to protest against sweeping pension reform. Greek lawmakers vote in favour of the pension reform.

July 7 – Germany agrees on a four-year, 80 billion euro ($100 billion) austerity plan, committing the country to cutting its budget deficit and shoring up Chancellor Angela Merkel’s centre-right coalition.

— Europe lists 91 banks taking part in financial stress tests, which are expected to provide more detail about problematic assets, including bonds issued by peripheral euro zone countries and loan exposures to troubled pockets.

June 30 – A strike by Spanish underground rail workers causes more traffic chaos in Madrid as unions threaten further stoppages over austerity measures.

June 29 – About 10,000 people take part in marches across Athens during a nationwide strike against austerity measures.

— Greece starts to debate overhaul of pensions to raise women’s retirement age from 60 to match men at 65 and demand more years at work to qualify for a pension. Greece’s debt reached 133 percent of GDP in 2010.

June 25 – The CGIL, Italy’s biggest union with 6 million members, holds rallies in Rome, Milan and other cities to force the government to redraft a 25-billion-euro austerity package. 

June 24 – The cost of protecting government debt against default in Greece hits a record high. It costs to 958,000 euros to insure 10 million euros-worth of government bonds.

June 22 – Spain’s parliament ratifies labour reforms aimed at restoring economic growth by easing cost of hiring, firing.

June 17 – European leaders agree to publish details of "stress tests" showing the financial health of individual banks in July and to toughen budget rules to restore confidence.

June 16 – France announces a reform of its pension system raising the retirement age gradually to 62 in 2018 from 60.

June 15 – The ECB says it will apply a 5 percent extra charge to Greek government bonds used as collateral in lending operations following a downgrade.

June 14 – Moody’s cuts Greece’s credit rating four notches to Ba1 or junk status due to risks to an EU/IMF bailout package, highlighting persisting doubts in coming out of a debt crisis.

June 9 – Liberals win most votes in Dutch election but consensus on bringing public finances under control will be hard. Deficit set to reach 6.6 percent of GDP in 2010.

— Portuguese parliament approves latest austerity package. Treasury chief rules out drawing on the euro zone aid package, citing a successful bond sale and economic recovery in Q1.

June 8 – Spain’s unions say 75 percent of public sector workers stay at home in a protest against austerity plans. Government says real number of strikers is far smaller.

June 7 – German Chancellor Angela Merkel’s coalition agrees a package of budget cuts and taxes to bring Germany’s deficit within EU limits by 2013 and set an example to Europe. The plan aims to deliver 80 billion euros of savings over three years.

May 28 – Fitch cuts Spain’s credit rating in response to record household and corporate debt and mounting public debt.

May 27 – Spain’s government wins parliamentary approval for its 15 billion euro austerity package by a single vote.

May 25 – Italy approves a 24 billion euro austerity package with the aim of cutting the deficit to 2.7 percent of GDP in 2012 from 5.3 percent in 2009.

May 18 – Germany announces a unilateral ban on "naked" short selling of shares in its top 10 financial institutions, euro zone government bonds and related credit default swaps.

May 13 – Portugal’s prime minister and opposition leader draw up steps to slash the deficit, including public sector pay cuts. The deficit is due to fall to 4.6 percent in 2011 from 9.4 percent in 2009.

May 10 – Global policymakers install an emergency financial safety net for the euro zone worth 750 billion euros to calm financial markets and avert contagion from the Greek crisis. The package consists of 440 billion euros in guarantees from euro zone states, plus 60 billion euros in a European debt instrument. The IMF is to contribute 250 billion euros.

May 6 – Greek parliament approves austerity bill.

May 2 – Prime Minister George Papandreou says Greece has reached a deal with the EU and IMF opening the door to a bailout in return for extra savings of 30 billion euros over three years. Athens will get loans worth 110 billion euros in installments conditional on reforms over three years in the first rescue of a member of the 16-nation euro zone.

April 27 – Standard & Poor’s downgrades Greek government debt to junk status. The next day it downgrades Spain’s debt because of poor growth prospects.

— S&P cuts Portugal’s rating by two notches to A-minus, saying Portuguese finances were structurally weak and the economy uncompetitive.

April 23 – Papandreou asks for activation of EU/IMF aid.

April 22 – Eurostat says Greece’s 2009 budget deficit was 13.6 percent of GDP, not the 12.7 percent it had reported.

April 11 – Euro zone finance ministers approve a 30 billion euro aid mechanism for Greece.

March 25 – Euro zone leaders and the IMF agree to create a joint financial safety net to help Greece.

March 5 – A package of public sector pay cuts and tax increases is passed in Greece to save an extra 4.8 billion euros. State-funded pensions are frozen.

Feb. 5 – Spain proposes raising the retirement age to 67 from 65, triggering a mass union protest.

Jan. 29 – Spain announces a plan to save 50 billion euros, including government spending cuts totalling 4 percent of GDP. Public sector pay is to be cut 4 percent.

Jan. 14, 2010 – Greece unveils a stability programme, saying it will aim to cut its deficit to 2.8 percent of GDP by 2012.

Dec. 22, 2009 – Moody’s cuts Greek debt to A2 from A1 over soaring deficits, the third rating agency to downgrade Greece.

Dec. 16 – Standard & Poor’s cuts Greece’s rating by one notch, to BBB-plus from A-minus, saying its austerity programme is unlikely to produce a sustainable reduction in public debt.

Dec. 9 – In Ireland, a budget delivers savings of over 4 billion euros. Public service pension age rises to 66 from 65.

Dec 8 – Fitch Ratings cuts Greek debt to BBB+, the first time in 10 years it has been rated below investment grade.

Nov. 20 – A final budget draft shows Greece aims to cut the deficit to 8.7 percent of GDP in 2010.

Nov. 5 – Papandreou’s new socialist government says Greece’s 2009 budget deficit will be 12.7 percent of GDP, more than twice the previously published figure.

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3 comments

  1. Pingback: 2010 in review « nvs Blog of Politico-Economics
  2. Pingback: Max Keiser on Inside Story – Greek Debt Crisis – (2/2) | Best Debt USA

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