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Timeline: Europe’s long and winding road to rescuing Greece

Timeline: Europe’s long and winding road to rescuing Greece
AFP
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First Published: Sun, May 02 2010. 02 42 PM IST
Updated: Sun, May 02 2010. 02 42 PM IST
Brussels: European partners took six months to help Greece avoid bankruptcy, which they concluded would wreak havoc with the shared euro currency. Here we look back at the key stages in that process:
October 2009: The crisis is triggered when the new socialist government more than doubles the previous estimate for Greece’s 2009 public deficit, from 6% of national output to 12.7%.
December 2009: Credit rating agencies Standard & Poor’s, Moody’s and Fitch downgrade Greece’s ability to repay its debts. European leaders meeting in Brussels reckon Athens can deal with its problems by itself.
11 February 2010: European leaders agree to take determined and coordinated action to safeguard financial stability across the 16-nation euro currency area, if necessary, but give no details. Markets are underwhelmed.
3 March: Athens announces a new austerity programme, but calls for European solidarity and refuses to rule out the possibility of mounting an emergency appeal to the International Monetary Fund.
15 March: Eurozone finance ministers agree the broad outlines of a plan to coordinate a series of bilateral loans, but stress the commitment is designed to soothe markets and is not intended ever to be used.
25 March: European Union leaders agree to involve the IMF in a rescue mechanism of last resort.
11 April: The first clear numbers are made public, when eurozone finance ministers say they will make €30 billion ($40 billion) available in 2010 at interest rates of roughly 5%. The IMF is to add half as much again, but no aid is triggered.
21 April: Teams from the European Commission, the European Central Bank and the IMF hit Athens to negotiate conditions demanded of Greece in exchange for aid.
22 April: The EU revises up the Greek 2009 deficit to 13.6% of output, warning it will likely cross 14% given ongoing doubts about the veracity of Greek data reporting. The euro hits a 12-month low against the dollar.
23 April: Athens formally requests the loans.
27 April: Standard & Poor’s cuts Greek debt rating to junk status, sending bond yields soaring, unleashing panic on markets and contagion threatening other weak euro nations.
1 May: The EU-IMF negotiations in Athens conclude, against a backdrop of violent clashes between Greek police and protesters. Aid running to some €120 billion, according to French finance minister Christine Lagarde, is ready to be announced on Sunday. But a summit of eurozone national leaders set for Friday or Saturday 7 or 8 May has still to press the button on the physical transfer of money.
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First Published: Sun, May 02 2010. 02 42 PM IST
More Topics: Greece | Finance | Economy | Debt | Rescue |