Following is a timeline of Europe’s debt crisis from the signing of the Maastricht Treaty to Greece’s agreement to set up a government of national unity.
1992 Feb. 7: Maastricht Treaty signed, setting up an “irrevocable” monetary union without a central finance ministry or a mechanism to leave the euro.
16 Sept: Europe’s Exchange Rate Mechanism blown into disarray when the U.K. is forced to exit the currency regime, a precursor to monetary union. Billionaire George Soros reportedly makes $1 billion selling the pound. Italy later exits and the Spanish peseta, Portuguese escudo and Irish punt are devalued.
1996 Dec. 13: In the absence of a euro finance ministry, EU leaders consent to a German-inspired “Stability Pact” designed to impose financial penalties on countries that overstep deficit limits.
1998 March 14: Greece enters the ERM.
1999 Jan. 1: Euro established with 11 founding members.
2001 Jan. 1: Greece enters euro region. Greek 10-year bonds yield 5.36 percent, Spanish 10-year bonds 5.09 percent and Italian 10- year bonds 5.16 percent. Germany’s 10-year bund yields 4.85 percent.
2005 March 20: EU finance ministers bow to German pressure to relax deficit rules.
2008 Sept. 15: Lehman Brothers files for bankruptcy, triggering worldwide market panic.
Sept. 30: Ireland guarantees all deposits and most debt liabilities of its banks. Irish 10-year bonds yields 4.590 percent.
2009 Jan 14: S&P cuts Greece to A- from A. The rating company cites the country’s weakening finances as the global economy slowed. Greek 10-year bond yields rise to 5.43 percent the next day.
Jan. 15: Ireland nationalizes Anglo Irish Bank.
Jan. 19: S&P cuts Spain to AA+ from AAA.
May 6: Spanish Finance Minister Elena Salgado sees “green shoots” in Spanish economy. Ten-year bonds yield 3.93 percent.
Oct. 4: George Papandreou leads Socialist Pasok Party to landslide victory in Greek elections, beating New Democracy by the widest victory margin since 1981 on pledges to boost spending and wages.
Oct. 20: New Greek Finance Minister Papaconstantinou says deficit will balloon to 12.5 percent of GDP this year, more than double the previous government’s forecast. Yield on Greek 10- year bond 4.58 percent.
Oct. 26: Former head of Greek National Statistics Service says his body “holds no responsibility” for the revision of deficit figures since 2008.
Nov. 5: Papandreou announces first budget. The plan aims to trim the deficit to 9.4 percent GDP in 2010.
Dec. 16: S&P Cuts Greece to BBB+ from A-, three steps above junk.
2010 Jan. 14: Greece adopts three-year plan to bring the European Union’s biggest budget deficit within the EU limit in 2012. The same day, ECB President Jean-Claude Trichet said Greece won’t win any special treatment from the central bank.
Jan. 21: Papaconstantinou says Greece won’t need a rescue package. The yield on Greece’s 10-year bond reaches 6.248 percent, a euro-era high.
Jan. 29: EU Commissioner Joaquin Almunia says in Davos there is no ‘Plan B’ for Greece. “Greece will not default. In the euro area, default does not exist.”
Feb. 2: Greek government announces austerity package to get deficit to 3 percent of GDP in 2012.
Feb. 11: EU leaders hold first emergency summit on Greece. EU agrees to take “determined and coordinated action” to protect financial stability of euro area, without giving further details.
Feb. 15: Papaconstantinou says “we are basically trying to change the course of the Titanic. People think we are in a terrible mess. And we are.”
March 4: Germany snubs aid for Greece in “historic moment” for EU as protesters seize Finance Ministry in Athens.
March 8: Portuguese government announces new budget cuts, more asset sales and a freeze on public wages.
March 10: Former Italian Prime Minister Romano Prodi says Greece’s problems are “completely over. I don’t see any other case now in Europe.”
March 16: Euro-region finance ministers lay groundwork for making emergency loans available to aid Greece. S&P affirms Greece BBB+ rating and takes it off Creditwatch negative. Papaconstantinou says the EU needs a “loaded gun” to fend off speculators.
March 18: Papandreou calls on EU partners to come up with specific aid measures within a week to help Greece, hints he might seek support from IMF if EU partners don’t act.
March 24: Fitch cuts Portugal’s credit rating to AA-.
March 25: Trichet says that the ECB will continue to accept bonds rated as low as BBB- as collateral, reversing his January refusal to give Greece special treatment. Later that day in Brussels, Trichet abandons his opposition to IMF involvement in a Franco-German plan to give Greece bilateral loans at market rates.
March 26: Head of Greek debt agency says rescue deal “wipes out the risk of default.”
March 30: Ireland says country’s banks need to raise an additional 31.8 billion euros of capital.
April 8: Greece’s 10-year bond yield reaches 7.4 percent, pushing the spread on German bunds to a euro-era high of 442 basis points.
April 12: Euro-area finance ministers agree to provide up to 30 billion euros of loans to Greece over the next year with the IMF agreeing to put up another 15 billion euros in funds.
April 21: Greece, facing 8.5 billion euros in bond redemptions the following month, begins talks with the EU, the ECB and the IMF on conditions tied to 45 billion-euro in aid.
April 22: The EU revises Greece’s 2009 budget deficit to 13.6 percent of GDP, higher than the government’s previous forecast of 12.9 percent. Ireland overtakes Greece as the EU nation with the largest deficit with its shortfall revised to 14.3 percent. Moody’s cuts Greece one level to A3.
April 23: Papandreou asks EU for a 45 billion-euro bailout from the EU and IMF, calling it a “a new Odyssey for Greece.” “But we know the road to Ithaca and have charted the waters,” he added, referring to the return of mythological hero Ulysses to his island home.
April 27: Ireland can “easily” weather the impact of the Greek crisis on financial markets, the country’s debt agency head said.
April 27: S&P become first rating company to cut Greece to junk, downgrades Portugal to A-.
April 28: S&P cuts Spain’s credit rating for second time since January 2009, pushing the euro to a one-year low of $1.3115.
May 2: Euro-region agrees on a 110 billion-euro rescue package for Greece. Greece agrees to 30 billion euros in austerity cuts over the next three years in exchange for the aid.
May 3: The ECB says it will indefinitely accept Greek collateral regardless of the country’s credit rating.
May 5: Protests in Athens against the government’s austerity plans turn violent and three people are killed when they become trapped in a bank set ablaze by demonstrators.
May 6: Greek Parliament approves deficit cuts. Greek 10-year yields reach 12 percent the next day.
May 7-8: European leaders agreed to set up an emergency fund to stem the sovereign crisis and said the workings of the financial backstop will be hammered out before the markets open May 10.
May 9-10: EU finance chiefs, in a 14-hour overnight session in Brussels, agree to set up a 750 billion-euros rescue mechanism for countries facing financial distress and the ECB said it will buy government and private debt in the biggest attempt yet to end the sovereign-debt crisis. The meeting gives birth to the European Financial Stability Facility, the region’s temporary bailout mechanism, with initial capital of 440 billion euros.
May 10: Merkel’s party suffers its worst postwar defeat in Germany’s most populous state after a regional vote overshadowed by aid for Greece. The result cost Merkel control of the upper house of parliament. Bundesbank President Axel Weber publicly criticizes ECB bond purchases.
May 12-13: Spain announces public-wage cuts and a pension freeze while Portugal says it will lower the salaries of top government officials and increase taxes. Spain cuts deficit target to 6 percent in 2011 and trims growth outlook.
May 18: Greece receives its first bailout loan for 14.5 billion euros, one day before 8.5 billion euros in bonds come due.
May 27: Italian Prime Minister Silvio Berlusconi unveils 25 billion euros in deficit cuts meant to help “defend the euro.”
May 28: Fitch cuts Spain’s AAA rating one level to AA+
June 23: Greek 10-year bond yield closes above 10 percent for first time in euro’s history.
June 14 Moody’s cuts Greece to junk.
July 13 Greece returns to bond markets for first time since bailout, selling 1.62 billion euros of six-month bills.
July 23: Europe publishes the results of bank stress tests. Only 7 of 91 lenders flunk the test.
Aug 24: S&P cuts Ireland’s credit rating to AA- because of concern over the costs of shoring up the country’s banking system.
Sept. 29: Spain’s first general strike in eight years to protest cuts and an increase to the retirement age.
Sept. 30: Ireland prepares to take majority control of Allied Irish Banks Plc and pump extra cash into Anglo Irish Bank Corp. Moody’s cuts Spain’s AAA rating to Aa1.
Oct. 4: Greece announce draft budget plan to cut the deficit to 7 percent of GDP in 2011.
Oct. 18: German Chancellor Angela Merkel and French President Nicolas Sarkozy meet in Deauville, France and agree that private investors must contribute to future EU bailouts and Sarkozy backs Merkel’s call for a permanent rescue mechanism from 2013.
Nov. 4: Trichet signals concern that forcing bondholders to take losses will drive up borrowing costs.
Nov. 12: Seeking to calm markets, finance ministers of France, Germany, Italy, Spain and the U.K. issued a statement at a G-20 in Seoul saying any private sector involvement would not apply to outstanding debt and would only come into effect from 2013.
Nov. 14: Irish Enterprise Minister Batt O’Keefe says Ireland doesn’t need a bailout, refutes talk of crisis.
Nov. 21: Ireland says it will apply for a bailout.
Nov. 23: S&P Cuts Ireland two steps to A from AA-.
Nov. 28: Ireland gets 85 billion-euro bailout. European leaders scale back proposals to inflict losses on bondholders.
Dec. 23: Fitch cuts Portugal to A+.
2011 Jan. 14: Fitch follows S&P and Moody’s in cutting Greece to junk.
Jan. 24: Spain announces new capital requirements for banks. Salgado says the capital shortfall won’t be more than 20 billion euros.
Feb. 11: Axel Weber resigns from Bundesbank after opposing the ECB’s crisis policy.
Feb. 25: Ireland holds general election, with the ruling Fianna Fail swept from power in the worst result in its history.
March 11: EU summit agrees to expand powers of EFSF to allow it to buy debt in primary markets and tap its full 440 billion euros in firepower. EU also reaches preliminary agreement to cut the rates on emergency loans to Greece by 100 basis points for first three years and extend maturities of the loans to 7.5 years.
March 21: EU finance ministers decide on mechanisms for allowing the region’s permanent bailout mechanism, the ESM, lend 500 billion euros from 2013. The ESM will draw on 80 billion euros of paid-in capital, enabling it to lend a full500 billion euros.
March 23: Portugal’s Prime Minister Jose Socrates resigns after opposition rejects austerity package.
March 25: European Union leaders cut the start-up capital for the future permanent euro emergency aid mechanism, the ESM, after German demands to make smaller upfront payments.
April 6: Portuguese Prime Minister Jose Socrates requests EU bailout, saying he “tried everything” to avoid seeking aid.
April 15: Papandreou announces 76 billion euros of austerity measures, later increased to 78 billion euros, running through the end of 2015. The program pledged to raise 50 billion euros from state asset sales and aims to cut the budget deficit to 1 percent of GDP in 2015.
April 17: True Finns, who oppose euro bailouts, win 19 percent of the vote in Finnish elections.
May 6: Finance ministers from Spain, France, Germany and Italy hold unannounced meeting in Luxembourg that prompt press reports that Greece will leave the euro. Trichet walks out, refusing to attend any meeting that discusses Greek haircuts. Luxembourg Prime Minister Jean-Claude Juncker, who chairs finance ministers’ meetings, says possible further aid for Greece was discussed.
May 9: S&P cuts Greece two levels to B from BB-, threatens further cuts.
May 11: German Chancellor Angela Merkel signals that she will support Mario Draghi’s candidacy to succeed Trichet as president of ECB.
May 13: EU published new debt and deficit forecasts and predicts that Ireland, Portugal, Greece will all to have debt of more than their total GDP in 2011.
May 16: Portugal’s 78 billion-euro bailout approved by finance ministers. ECB’s Executive Board member Juergen Stark says restructuring would be “catastrophe” and wipe out Greek banks. Bini Smaghi says no difference between soft-hard restructuring.
May 17: European finance ministers for the first time float the idea of talks with bondholders to extend Greece’s debt-repayment schedule.
May 18: IMF Managing Director Dominique Strauss-Kahn resigns after being charged with attempting to rape a New York hotel maid. The case is thrown out three months later by a Manhattan judge.
May 20: ECB’s governing council member and Bundesbank President Jens Weidmann says central bank won’t take Greek bonds as collateral if maturities extended.
May 22: Spain’s ruling Socialists suffer worst local election defeat in 30 years.
May 24: Greece announces details on additional 6 billion euros of 2011 budget cuts, plan to speed asset sales. ECB governing council member Christian Noyer says Greek restructuring would be ‘horror story.’
May 27: Greek Cabinet passes another 6 billion euros in austerity measures and gave some details on planned assets sales.
June 5: Social Democratic and People’s Party win majority in Portuguese election, routing Socrates’ Socialists.
June 7: EU Monetary Affairs Commissioner Olli Rehn says June may be the “beginning of the end” of the crisis.
June 13: S&P Cuts Greece to CCC, the lowest rating for any country it reviews in the world.
June 15: Papandreou announces Cabinet reshuffle and confidence vote.
June 17: Papandreou appoints Defense Minister Evangelos Venizelos to replace Papaconstantinou as finance minister.
June 22: Papandreou survives confidence vote in his government.
June 24: Draghi appointed to succeed Trichet as president of the ECB.
June 28: French Finance Minister Christine Lagarde is named the first female head of the IMF with a mandate starting July 5.
June 30: Greek lawmakers approve the 78 billion-euro austerity plan after two votes in two days marred by violent protests outside parliament. Berlusconi’s Cabinet approves 47 billion euros in deficit-cutting measures to try to balance the budget by 2014 and protect Italy from the fallout of Europe’s debt crisis.
July 5: Moody’s cuts Portugal to junk.
July 12: Moody’s cuts Ireland to junk.
July 21: EU summit passes second bailout package for Greece and agrees to expand the powers of the EFSF. Bankers agree to take losses of 21 percent on the net present value of their Greek bond holdings.
July 29: Spanish Prime Minister Jose Luis Rodriguez Zapatero sets Nov. 20 as date for early elections that polls show he will lose. Moody’s places Spain’s rating on review for a downgrade.
Aug. 2 Spain’s 10-year bond reached euro-era record 6.46 percent.
Aug. 4 The ECB votes to resume its bond-buying program, buys Portuguese and Irish debt.
Aug. 5: ECB sends secret letter to Italy asking for more austerity measures and a plan to balance budget in 2013 rather than 2014. Berlusconi announces he will seek a balanced budget amendment and pledges more austerity Italian yields rise above Spanish yields for first time since May 2010.
Aug. 7: After emergency conference call, ECB signals it will begin buying Italian and Spanish bonds in secondary markets as part of its Securities Markets Program. The next day Spain’s 10- year yield falls 88 basis points to 5.16 percent, Italy’s drops 80 basis points to 5.23 percent.
Aug. 12: Italy’s Cabinet approves by decree a 45.5 billion euro austerity package to balance the budget in 2013 that helped secure ECB support for the country’s bonds. France, Spain, Italy and Belgium impose bans on short-selling after shares in European banks, including Societe Generale SA, hit their lowest level since Lehman’s collapse.
Aug. 16: Finland and Greece strike agreement on collateral to guarantee bailout contributions. The agreement was opposed by other euro members such as Austria and the Netherlands and had to be re-negotiated.
Aug. 19: Spain’s Cabinet passes another 5 billion euros of savings and cuts VAT on new home purchases.
Aug. 29 Berlusconi bows to pressure from his allies to overhaul the August austerity package and drop a tax surcharge on Italians earning more than 90,000 euros a year.
Aug. 31: Portugal raises capital gains taxes and increases levies on corporate profit and high earners.
Sept. 2: Inspectors from the European Union, European Central Bank and International Monetary Fund suspend Greece’s fifth review after finding delays in the implementation of the medium term fiscal plan and structural economic reforms. Spain adds budget-discipline amendment to constitution, the second change in its 30-year history.
Sept. 6: Italian unions hold general strike.
Sept. 9: Juergen Stark resigns from ECB after opposing the bank’s bond purchases.
Sept. 11: Papandreou approves new emergency measures to plug a gap in the budget for 2011.
Sept. 14: Italian parliament gives final approval in a confidence vote to a 54 billion-euro austerity package to balance the budget in 2013.
Sept. 15: ECB offers banks unlimited dollar loans for three months as worsening debt crisis sparks concern some institutions struggling to access U.S. currency.
Sept. 16: Spain brings back wealth tax scrapped in 2008.
Sept. 17: U.S. Treasury Secretary Timothy F. Geithner urges European officials to deal with the crisis and avoid “catastrophic risks” after flying to a meeting of European Union finance chiefs in Poland.
Sept. 19: Standard & Poor’s cuts Italy’s credit rating for the first time in almost five years, downgrading it to A from A+.
Sept 30: Spanish bank bailout fund takes over three more savings banks, valuing them between zero and 12 percent of book value and saying the overhaul of the financial industry is complete. Portugal revises up 2010 budget deficit to 9.8 percent.
Sept. 22: Italian Finance Minister Giulio Tremonti skips a parliamentary vote on whether to permit the arrest of his long- time aid Marco Milanese, straining relations with Berlusconi and key coalition allies.
Oct. 2: Greece’s government approves the draft budget for 2012 which targets a budget deficit of 8.5 percent of gross domestic product and announces it will miss revised deficit target for 2011.
Oct. 3-4: EU finance ministers work out a revamped deal on collateral for Greek loans that satisfies Finnish demands and those of other euro-region governments opposed to abilateral deal for Finland. Leaders also hint that private investors may have to accept a bigger haircut on their Greek bonds than what was included in a July 21 agreement.
Oct. 4: Moody’s cuts Italy for the first time in almost two decades, lowering the rating to A2 from Aa2.
Oct. 6: Spain says banking industry rather than the taxpayer will absorb losses incurred from bank bailouts.
Oct. 7: Fitch cuts Spain to AA- and Italy to A+
Oct. 10: Greece’s central bank activates a rescue fund set up under the May 2010 bailout to restructure Proton Bank SA, with the Hellenic Financial Stability Fund becoming its sole shareholder.
Oct. 11: Troika releases statement on fifth review of Greek economy and suggests the sixth tranche of the bailout payments worth 8 billion-euro be paid.
Oct. 14: Berlusconi survives a confidence in vote in parliament that he was forced to call to prove he still had a working majority after losing a routine vote earlier in the week.
Oct. 18: French bonds yield 112 basis points more than German equivalents.
Oct. 21: Papandreou wins parliamentary approval of latest austerity bill, which includes wage and pensions cuts and plans to lay-off 30,000 state workers. His majority falls by one lawmaker to 153 after he expels Louka Katseli for voting against one of the articles. EU, ECB, IMF issue draft sustainability report on Greece which said debt dynamics remain “worrying.”
Oct. 23: European leaders say a summit on the euro crisis won’t produce decisions and set another meeting for Oct. 26. Greek 10- year yields trade at 25 percent. Merkel and Sarkozy smile at a news conference when asked whether Berlusconi can fix Italy’s finances.
Oct. 26-27: EU leaders hold 14th crisis summit in 21 months. After more than 10 hours of talks, leaders agreed to leverage the EU’s temporary bailout fund to boost its firepower to 1 trillion euros, force private investors to accept a 50 percent haircut on Greek bonds, push European banks to raise 106 billion euros in new capital, and extend a new aid package worth 130 billion euros for Greece.
Oct. 31: Papandreou stuns EU politicians and Greek lawmakers by calling a referendum on the second bailout agreement.
Nov. 1: Stocks and bonds plunged worldwide on concern an unsuccessful referendum will push Greece into a disorderly default. The yield on Greece’s two-year bond rises to a record 84.7 percent. Draghi succeeds Trichet as ECB president.
Nov. 2: European leaders cut off aid payments to Greece and say Greece must decide soon whether it wants to stay in the euro. The ultimatum is at odds with the Maastricht Treaty’s assertion that monetary union is “irrevocable.”
Nov. 3: Papandreou backs down on euro referendum. Draghi’s ECB unexpectedly cuts interest rates at his first meeting.
Nov. 6: Papandreou agrees to step aside to make way for a government of national unity.
Greek 10-year bonds yield 25.52 percent. Spanish 10-year bonds yield 5.56 percent. Italian 10-year bonds yield 6.35 percent. German 10-year bonds yield 1.80 percent.
To contact the reporters on this story: Jeffrey Donovan in Rome at email@example.com Emma Ross-Thomas in Madrid at firstname.lastname@example.org To contact the editor responsible for this story: John Fraher at email@example.com