2000s European sovereign debt crisis timeline

Main article: European debt crisis
  Countries using the Euro de jure
  Countries and territories using the Euro de facto

From late 2009, fears of a sovereign debt crisis in some European states developed, with the situation becoming particularly tense in early 2010.[1][2] Greece was most acutely affected, but fellow Eurozone members Cyprus, Ireland, Italy, Portugal, and Spain were also significantly affected.[3][4] In the EU, especially in countries where sovereign debt has increased sharply due to bank bailouts, a crisis of confidence has emerged with the widening of bond yield spreads and risk insurance on credit default swaps between these countries and other EU members, most importantly Germany.[5]

This was the first Eurozone crisis since its creation in 1999. As Samuel Brittan pointed out,[6] Jason Manolopoulos "shows conclusively that the Eurozone is far from an optimum currency area".[7] Niall Ferguson also wrote in 2010 that "the sovereign debt crisis that is unfolding... is a fiscal crisis of the western world".[8] Axel Merk argued in a May 2011 Financial Times article that the dollar was in graver danger than the euro.[9]

Concern about rising government deficits and debt levels[10][11] across the globe together with a wave of downgrading of European government debt[12] created alarm in financial markets. The debt crisis is mostly centred on events in Greece, where the cost of financing government debt has risen. On 2 May 2010, the Eurozone countries and the International Monetary Fund agreed to a €110 billion loan for Greece, conditional on the implementation of harsh austerity measures.[13] On 9 May 2010, Europe's Finance Ministers approved a comprehensive rescue package worth €750 billion (then almost a trillion dollars) aimed at ensuring financial stability across Europe by creating the European Financial Stability Facility.[14] The Greek bail-out was followed by an €85 billion rescue package for Ireland in November,[15] and a €78 billion bail-out for Portugal in May 2011.[16][17]

While the sovereign debt increases have been most pronounced in only a few Eurozone countries they have become a perceived problem for the area as a whole.[18] In May 2011, the crisis resurfaced, concerning mostly the refinancing of Greek public debt.[19] The Greek people generally rejected the austerity measures and have expressed their dissatisfaction with protests.[20][21] In late June 2011, the crisis situation was again brought under control with the Greek government managing to pass a package of new austerity measures and EU leaders pledging funds to support the country.[22] In May 2012 the crisis escalated to new levels following the national Greek legislative election, May 2012. Greek parties failed to form a coalition Government following the election and there was widespread speculation of Greece exiting the Eurozone, termed a "Grexit".

Below is a brief summary of some of the main events since the Greek government debt crisis.[23]

  1. ^ George Matlock (16 February 2010). "Peripheral Eurozone government bond spreads widen". Reuters. Retrieved 28 April 2010.
  2. ^ "Acropolis now". The Economist. 29 April 2010. Retrieved 22 June 2011.
  3. ^ European Debt Crisis Fast Facts, CNN Library (last updated 22 January 2017).
  4. ^ Ricardo Reis, Looking for a Success in the Euro Crisis Adjustment Programs: The Case of Portugal, Brookings Papers on Economic Activity, Brookings Institution (Fall 2015), p. 433.
  5. ^ "Gilt yields rise amid UK debt concerns". Financial Times. 18 February 2010. Retrieved 15 April 2011.
  6. ^ Samuel Brittan. "Who is winning in the race for recovery". Financial Times. Retrieved 12 May 2011.
  7. ^ Manolopoulos, J (May 2011). Greece's 'Odious' Debt: The Looting of the Hellenic Republic by the Euro, the Political Elite and the Investment Community. London: Anthem Press. Archived from the original on 17 August 2011. Retrieved 18 August 2011.
  8. ^ Niall Ferguson (10 February 2010). "A Greek crisis is coming to America". Financial Times. Archived from the original on 1 May 2011. Retrieved 18 April 2011.
  9. ^ Merk, Axel (11 May 2011). "Dollar in graver danger than the euro". The Financial Times. This reference links to a Google search where the first result is the correct link. Following the link directly would result in the news site requiring a subscription to access the article. Going through Google allows you to access the article without paying for a subscription.
  10. ^ "Britain's deficit third worst in the world, table". The Daily Telegraph. London. 19 February 2010. Archived from the original on 22 February 2010. Retrieved 29 April 2010.
  11. ^ "Fiscal Deficit and Unemployment Rate, FT". Retrieved 5 May 2010.
  12. ^ "Timeline: Greece's economic crisis". Reuters. 3 February 2010. Retrieved 29 April 2010.
  13. ^ Gabi Thesing; Flavia Krause-Jackson (3 May 2010). "Greece Gets $146 Billion Rescue in EU, IMF Package". Bloomberg. Retrieved 10 May 2010.
  14. ^ "EU ministers offer 750bn-euro plan to support currency". BBC News. 10 May 2010. Archived from the original on 10 May 2010. Retrieved 11 May 2010.
  15. ^ Treanor, Jill and Elliott, Larry Ireland to get €85bn loan in deal that will nationalise its banks The Guardian, 24 November 2010, Retrieved 19 May 2011
  16. ^ Sarah Butler (11 April 2011). "Portugal prepares to meet EU and IMF to negotiate bail-out". The Daily Telegraph. UK. Retrieved 18 April 2011.
  17. ^ "Portugal's 78bn euro bail-out is formally approved". BBC Business. BBC. 16 May 2011. Archived from the original on 18 May 2011. Retrieved 19 May 2011.
  18. ^ "How the Euro Became Europe's Greatest Threat". SPIEGEL staff. Der Spiegel. 20 June 2011. Retrieved 16 October 2011.
  19. ^ Ian Traynor (19 June 2011). "Greek debt crisis: Eurozone ministers meet amid deepening gloom". The Guardian. London. Archived from the original on 13 March 2016.
  20. ^ K.H. (16 June 2011). "A long day in Greece". The Economist.
  21. ^ Aditya Chakrabortty (19 June 2011). "Athens protests: Syntagma Square on frontline of European austerity protests". The Guardian. London.
  22. ^ "EU leaders pledge to do what is needed to help Greece". BBC Business. BBC. 23 June 2011. Retrieved 16 October 2011.
  23. ^ "Reuters Timeline of Greek Crisis". Reuters. 16 April 2010. Retrieved 5 May 2010.