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Greek Crisis Timeline From Maastricht Treaty to ECB Bond Buying

Following is a timeline of Europe’s debt crisis from the signing of the Maastricht Treaty to today’s European Central Bank press conference.

Dec. 10: Maastricht Treaty agreed, 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.

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

March 14: Greece enters the ERM.

Jan. 1: Euro established with 11 founding members.

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

Nov. 24-25: Germany, France override EU budget rules after
saying they expect to exceed the EU’s 3 percent deficit limit
for a third year. Spain, Netherlands, Finland and Austria

March 20: EU finance ministers bow to German pressure to relax
deficit rules.

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

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.

Oct. 4:  George Papandreou leads Socialist Pasok Party to
landslide victory in Greek elections, beating New Democracy by
the widest margin since 1981 on pledges to boost spending and

Oct. 20: New Greek Finance Minister Papaconstantinou says
deficit will balloon to 12.5 percent of GDP in 2009, 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

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

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 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

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 26: Head of Greek debt agency says rescue deal “wipes out
the risk of default.”

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: S&P becomes first rating company to cut Greece to
junk, downgrades Portugal to A-.

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 18: Greece receives its first bailout loan for 14.5 billion
euros, one day before 8.5 billion euros in bonds come due.

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.

Oct. 4: Greece announce draft budget plan to cut the deficit to
7 percent of GDP in 2011.

Nov. 28: EU agrees to 85 billion-euro bailout for Ireland.

Jan. 14: Fitch follows S&P and Moody’s in cutting Greece to

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

April 6: Portuguese Prime Minister Jose Socrates requests EU

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.

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

May 9: S&P cuts Greece two levels to B from BB-, threatens
further cuts.

May 13: EU publishes new debt and deficit forecasts and predicts
that Ireland, Portugal, Greece will all have debt of more
than their total GDP in 2011.

May 16: EU approves 78 billion-euro bailout for Portugal

May 17: European finance ministers for the first time float the
idea of talks with bondholders to extend Greece’s debt-repayment

May 24: Greece announces details on additional 6 billion euros
of 2011 budget cuts and a 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 gives some details on planned assets

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

June 17: Papandreou appoints Defense Minister Evangelos
Venizelos to replace Papaconstantinou as finance minister.

June 22: Papandreou survives confidence vote in his government.

June 30: Greek lawmakers approve the 78 billion-euro austerity
plan after two votes in two days marred by violent protests
outside parliament.

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.

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.

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. 11: Papandreou approves new emergency measures to plug a
gap in the budget for 2011.

Oct. 2:  Greece’s government approves the draft budget for 2012,
which targets a deficit of 8.5 percent of gross domestic
product, and announces it will miss revised deficit target for

Oct. 11: Troika releases statement on fifth review of Greek
economy and suggests the sixth tranche of the bailout payments
worth 8 billion-euro will be paid.

Oct. 21: Papandreou wins parliamentary approval of latest
austerity bill, which includes wage and pension 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 saying 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.

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. MF Global
Holdings Inc. declares bankruptcy after bets on sovereign debt

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. Mario 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.

Nov. 6: Papandreou agrees to step aside to make way for a
government of national unity.

Nov. 11: Lucas Papademos, a former ECB vice president is sworn
in as prime minister of a Greek unity government.

Dec. 5: S&P puts Germany, France and 13 other euro-area nations
on review for a downgrade.

Dec. 8: The ECB cuts its benchmark rate back to a record low of
1 percent and offers banks unlimited cash for three years. It
also eases collateral rules.

Dec. 9: Leaders complete all-night talks in Brussels on a
“fiscal compact,” sparking a split with the U.K. Euro
governments add 200 billion euros to their crisis-fighting
war chest, tighten rules to curb future debts and speed the
start of a 500 billion-euro permanent rescue fund to next year.
Draghi welcomes the decisions, without signaling any willingness
to step up bond purchases.

Greek 10-year bond yield at 32 percent.
Italian 10-year bond yield at 6.47 percent.
Spanish 10-year bond yield at 5.77 percent.
German 10-year bond yield at 2.07 percent.


Feb. 17: The ECB swaps Greek bonds purchased under the SMP for new ones to ensure it isn’t forced to take losses in a debt restructuring. Feb. 21: Euro-area finance ministers reached agreement on a second bailout package for Greece. The deal includes a 53.5 percent writedown for investors in Greek bonds. Feb. 25: Greece formally asked investors to exchange their holdings of government debt for new securities in the biggest sovereign restructuring in history. The bonds subject to the invitation had a total face value of about 206 billion euros. Feb. 27: Greek credit rating cut to “selective default” by Standard & Poor’s. March 1: Greece’s parliament completes vote on cuts needed for bailout. March 2: EU leaders declare end of financial crisis, turn attention to growth. March 9: Greece reaches target in debt restructuring with 95.7 percent participation rate among investors. April 23: Dutch government falls on disagreements over austerity measures within ruling coalition. May 2: Standard & Poor’s removes selective default, rates Greece CCC. May 6: Greece holds elections with anti-bailout party Syriza finishing a surprise second to New Democracy’s Antonis Samaras. Francois Hollande elected as French president. May 10: Spain partly nationalizes Bankia SA. May 15: Greek coalition talks fail, leading to new elections. June 9: Spain requests 100 billion euros of EU loans to prop up its ailing banks. June 17: New Democracy party led by Antonis Samaras wins Greek elections, falling short of majority in parliament. June 20: Samaras forms coalition government with opposition Pasok party, sworn in as prime minister. June 25: Cyprus requests EU bailout. June 28-29: EU leaders agree to ease terms of Spanish bank loans and pave the way for bond buying by the region’s rescue funds. July 4: Hollande announces budget plan that includes 7.2 billion euros of tax increases. July 5: Ireland sells Treasury bills for first time in almost 22 months July 26: Draghi says ECB will do whatever it takes to protect the euro, triggering a rally in stocks and bonds. Ireland returns to bond market for first time in 22 months. Aug. 2: Draghi signals ECB prepared to move forcefully into bond markets in tandem with Europe’s rescue funds and would concentrate on buying shorter-term debt. Aug. 3: Spanish Prime Minister Mariano Rajoy says he may request EU bond buying if it’s in Spain’s interests. Sept. 1: Spain’s bank rescue fund to inject as much as 5 billion euros into Bankia group after nationalized bank reports 4.5 billion-euro first-half loss.

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