News / Europe

Key Dates, Events in European Debt Crisis

Europeon Debt to GDP Ratio

The unfolding eurozone economic crisis has led to political and social turmoil across the region as the governments of Greece, France, Ireland, Spain and Portugal try to keep their spending under control and impose drastic measures to cut their growing debts.  This is a timeline of the most important events leading to the current economic situation in southern Europe.

February 2, 2010: Greek Prime Minister George Papandreou proposes measures to freeze civil service salaries and raise fuel taxes and retirement ages.  Some investors believe Athens may need a bailout from other EU nations or the International Monetary Fund to avoid a default.  Investors begin to worry about other nations with significant debts, like Spain and Portugal, weakening the euro.  To this point, EU officials dismiss the need for a Greek bailout, saying Athens is capable of solving the crisis by itself.

February 9, 2010: Standard and Poor's, one of the world's three major credit rating agencies, lowers its rating for Greek bonds from A-minus to Triple-B-plus.  

February 15, 2010: European finance ministers warn Greece it may need to take drastic action and that pledges to cut government spending and raise money do not go far enough.  EU ministers give Greece until mid-March to show it can make substantial progress.  The United States says it is confident the EU can handle the Greek financial crisis.

March 3, 2010: The Greek Cabinet approves broad new spending cuts designed to save an extra $6.5 billion.  Prime Minister George Papandreou says the country risks "catastrophe" if the government fails to impose decisive spending cuts.

March 7, 2010: French President Nicolas Sarkozy promises that eurozone nations will not let Greece fail.  

March 8, 2010: Portugal announces a series of austerity measures intended to cut its nation's budget deficit by 2013.  

March 11, 2010: An estimated 30,000 people march through Athens in a wave of protests against civil service pay cuts and a freeze on pensions.  Some of the clashes turn violent.

March 24, 2010: EU ministers fail to agree on how to help the struggling Greek economy as the value of the euro plunges to a 10-month low against the dollar.  The Fitch Ratings agency lowers its credit rating for Portugal because of worries that country will be unable to pay back its loans.

April 26-27, 2010: Ratings agency Standard and Poor's cuts Greek long-term government bonds three levels to speculative or "junk" status.  It also downgrades Portugal's sovereign debt by two notches.  S&P says it has growing concerns about the ability of the Greek and Portuguese governments to repay debts.  The downgrades prompt Greek and Portuguese stocks to fall sharply.

April 27, 2010: Portuguese public transportation workers strike against government austerity measures, causing major traffic jams on roads into Portugal's capital, Lisbon.

May 2, 2010: European Union finance ministers unveil a $146 billion EU-International Monetary Fund rescue package for Greece.  German Chancellor Angela Merkel says it is the only way to ensure the stability of the euro.  The announcement comes the day after thousands of protesters rallied in Athens against the government's plan to make deep budget cuts.  

May 7, 2010: The International Monetary Fund gives final approval to a $40 billion bailout for Greece, part of a larger $145 billion rescue package.  Then-IMF managing Director Dominique Strauss-Kahn says the Greek government should be commended for "well-balanced" efforts to bring the country out of its financial crisis.

May 27, 2010: Spain's parliament approves roughly $18 billion package in spending cuts, including wage cuts for civil servants, by a one-vote margin.

May 29, 2010: The Fitch Ratings agency cuts Spain's credit rating one notch (from AAA to AA+), warning a strict austerity plan intended to cut debt could also slow economic growth.

June 14, 2010: Moody's Investors Service downgrades Greece's bond ratings to "junk" status because of concerns the country could fail to cut its deficit and pay down its debt.

November 27, 2010: Thousands in Dublin protest the Irish government's plan to cut social welfare programs and raise taxes. The cuts are needed to secure a $113 billion international bailout for the debt-plagued nation.  EU governments approve the bailout package the following day.  

March 23, 2011: Portuguese Prime Minister Jose Socrates resigns after parliament rejects plans for more spending cuts.

March 24, 2011: Thousands of demonstrators confront police in Brussels during an EU summit aimed at dealing with the debt crisis.  Belgian police fire tear gas and water cannon at nearly 20,000 protesters.

May 3, 2011: Portugal becomes the third European Union nation to take a bailout, accepting a $116 billion package from the European Union and International Monetary Fund.

May, 12, 2011: The IMF warns that debt problems in Greece, Ireland and Portugal could spread to other eurozone nations and emerging economies in eastern Europe.  

May 19, 2011: Thousands of protestors frustrated with Spain's 21-percent unemployment rate gather in major Spanish cities to demand that Madrid provide them with jobs.  Unemployment for people aged 18 to 25 is even higher, at 45 percent.

June 29, 2011: The Greek parliament approves sweeping new austerity measures - voting for $40 billion in tax increases and spending cuts, and the sale of state-owned assets.  Lawmakers vote for the plan as thousands of rock-throwing protesters clash with police in central Athens.

July 22, 2011: The EU and IMF agree to give Greece another bailout worth about $155 billion.  Greece will also get voluntary loans from the private sector to help cover its financial gap.

August 12, 2011: Italy unveils sharp budget cuts - about $28 billion in 2012 and $35 billion in 2013.  The European Central Bank had demanded the cuts in exchange for supporting Italy's bonds.  Interest rates on those bonds soared a week earlier, increasing investor fears that Italy could be forced to seek a bailout.

August 25, 2011: France unveils a series of cuts and tax increases aimed at reducing the budget deficit by about $17 billion in two years. Prime Minister Francois Fillon said the moves are necessitated by slower economic growth.

September 19, 2011: Standard & Poor's cuts Italy's credit rating one notch from A+ to A and keeps its outlook negative.

October 7, 2011: Fitch Ratings lowers the credit ratings of Italy and Spain, warning they could be lowered again.

October 19, 2011: An estimated 70,000 people march on the Greek parliament, some clashing with police, while a general strike paralyzes Athens.  Public and private sector unions criticize the government's plans to slash the salaries of public workers and raise taxes.

November 1, 2011: World stock markets plummet after Greek Prime Minister George Papandreou says he will call for a referendum on further austerity measures needed to secure additional bailout funds.  After European leaders and financial analysts warn that a vote against the debt-relief would amount to Greece's departure from the eurozone, he scraps the idea, but his political position is damaged.

November 2, 2011: French President Nicolas Sarkozy and German Chancellor Angela Merkel say Greece will receive no more European bailout aid until it fulfills its commitments to the eurozone.

November 6, 2011: Greek Prime Minister George Papandreou agrees to step down in favor of a short-term coalition government whose primary task will be reaching agreement on a new EU bailout deal.

November 8, 2011: Italian Prime Minister Silvio Berlusconi says he will resign as soon as parliament passes crucial economic reforms.  Mr. Berlusconi makes the announcement after he loses his parliamentary majority during a vote on a routine budget measure.  Italy is the third-largest economy in the eurozone and the seventh largest in the world.  But like its neighbors, it faces a potential economic crisis caused by a ballooning public debt.

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