Timeline: Greece’s debt crisis

Key events since George Papandreou first sealed a bailout deal for Greece in May 2010.

Greek crisis
Papandreou has faced the ire of protesters over his government’s austerity measures [Reuters]

Ever since George Papandreou, the Greek prime minister, came to power two years ago, he has struggled to manage country’s balance sheets.

And last year, the worst came to the fore: Greece said it was not in a position to pay salaries to its government employees.

Papandreou managed to convince IMF and EU to bail Greece out of the financial morass, but it came with lot of conditions.

The series of tough austerity measures that Papandreou’s government announced forced people to come out on the streets, leading to a plunge in his popularity.

Here are the key moments since May last year:

November 16 – Prime Minister Lucas Papademos’s coalition wins large majority for his austerity plans to speed up long-term reforms and secure a massive new bailout deal involving banks and rescue creditors.

November 11 – Lucas Papademos is sworn in as Greece’s interim prime minister. His newly appointed coalition cabinet includes Evangelos Venizelos, retaining the key position of finance minister. 

November 10 – Lucas Papademos announced as Greece’s interim prime minister until early elections expected in February. The former vice-president of the European Central Bank is expected to choose his own cabinet for the three month term.

November 6 – George Papandreou agrees to step down as Greek prime minister after an agreement to form a coalition government is reached with leading opposition leader Antonis Samaras.

November 4 – After intense pressure from European leaders, the government confirms it has dropped plans to hold a referendum on Greece’s eurozone membership.

Papandreou tells parliament he will talk with parties about forming a wider coalition party and is ready to discuss who will lead a new government.

November 3 – Evangelos Venizelos, the Greek finance minister, comes out against a referendum, saying Greece’s euro membership was a historic achievement and “cannot depend on a referendum”.

Papandreou defies demands he resign over his decision to hold a referendum and calls instead for his party to unite for a confidence vote in the government.

Antonis Samaras, the opposition New Democracy Party leader, calls on Papandreou to resign and demands snap elections in six weeks.

November 2 – Papandreou wins cabinet backing to hold a referendum on a 130bn-euro ($178bn) bailout package.

Later, Nicolas Sarkozy, the French president, and Angela Merkel, the German chancellor, tell Papandreou at a tough meeting in Cannes that Athens will not receive any more aid until it votes to meet its commitments to the eurozone. Greece is due a vital 8 billion euros tranche this month.

October 31 – Papandreou calls a referendum on its latest bailout without consulting with European leaders.

October 27 – Eurozone leaders strike a deal with private banks and insurers for them to accept a 50 per cent loss on their Greek government bonds under a plan to lower Greece’s debt burden.

October 23 – Any solution for further reducing Greece’s debt burden must be voluntary, a Greek government official says following a meeting of EU leaders to try to find a solution to the debt crisis.

October 21 – Greece approves a set of austerity measures, defying violent protests in Athens and a general strike which has shut down much of the country, bringing more than 100,000 people to the streets over the last two days. At least 74 people are injured and one man dies of a heart attack on the fringes of the protest.

October 5 – Public-sector workers and state utilities employees go on strike for 24 hours against anti-austerity measures in action called by main labour unions ADEDY and GSEE.

October 2 – Government draft budget figures say Greece will miss a deficit target set just months ago in a massive bailout package. The 2012 draft budget is approved by cabinet and predicts a deficit of 8.5 per cent of GDP for 2011, well short of the 7.6 per cent target.

The cabinet approves a measure creating a “labour reserve” allowing 30,000 state workers to be placed on 60 per cent pay and be dismissed after a year.

September 29 – The “troika” team of inspectors begin talks on a plan demanded by lenders to deepen budget cuts and raise taxes.

September 27 – Greece passes an unpopular property tax to persuade IMF and EU it deserves the next 8bn-euro tranche it needs to pay October salaries and avoid bankruptcy.

September 21 – Greece adopts more austerity measures, including cutting high pensions by 20 per cent.

July 21 – Eurozone leaders agree on second rescue package with extra 109bn euros ($157bn) of government money, plus contribution by private sector bondholders estimated to total as much as 50bn euros by mid-2014.

July 8 – IMF approves disbursement of about 3.2bn euros to help Greece pay debts due this month. This tranche brings IMF disbursements to about 17.4bn euros.

June 29 – Papandreou wins parliamentary majority in favour of five-year austerity plan by 155 votes to 138, clearing hurdle to winning access to new international funding.

June 17 – Papandreou reshuffles cabinet, appoints Evangelos Venizelos, his main party rival, as new finance minister. The new cabinet wins confidence vote on June 22.

June 13 – Greece gets the lowest credit rating in the world after S&P downgrades it by three notches, to CCC from B.

June 8 – Greece agrees to 6.48 billion euros of extra austerity measures for 2011 and savings up to 2015 to cut deficits and to keep receiving aid.

May 23 – Greece unveils series of privatisations, part of its goal to raise 50bn euros by 2015 to pay down debt.

May 11 – EU and IMF inspectors arrive in Athens to press Greece to shore up finances and to determine if country will get fifth aid tranche of 12bn euros.


August 5 – EU and IMF inspectors give Greece green light for fresh 9 billion euro tranche from bailout.

July 7 – Greek parliament passes pension reform, key requirement of the EU/IMF deal, which includes raising women’s retirement age from 60 to match men at 65.

May 18 – Greece receives 14.5bn euro (id=mce_marker8.7bn) loan from EU and can repay immediate debt.

May 10 – Global policymakers install emergency safety net worth about id=mce_markertn to bolster international financial markets and prevent Greek crisis from damaging the euro. The net consists of 440bn euros in guarantees from euro zone states, plus 60bn euros in European debt instruments. EU finance ministers say IMF will contribute a further 250bn euros.

May 9 – IMF unanimously approves its part of rescue loans, with 5.5bn euros being provided immediately.

May 6 – Greek parliament approves austerity bill.

May 4-5 – Public-sector workers stage 48-hour nationwide strike. Three people are killed when a bank is set on fire.

May 2 – Papandreou says he has sealed a deal with the EU and IMF, opening the door for a bailout in return for extra budget cuts of 30bn euros ($43bn) over three years.

Three-year package amounts to 110bn euros and represents first rescue of a euro zone member.

Source: News Agencies