European Debt Crisis Timeline

events

ECB warns on financial imbalances

8 Dec 2005

ECB warns that financial imbalances are growing and look likely to continue, mainly at global level, but also in the euro area.

Investors may be underestimating risks in euro area, says ECB

1 Jun 2006

The ECB warns that investors in the euro area may have underestimated or taken on an excessive level of risk. The financial stability outlook remains delicately balanced.

ECB sees euro area financial system as potentially vulnerable

11 Dec 2006

The ECB says that long-term interest rates and risk premia have been driven too low in some financial markets and that intense competition could have encouraged banks to loosen credit standards.

Financial markets potentially unstable, says Trichet

29 Jan 2007

ECB President Trichet warns of instability in global financial markets: "There is now such creativity of new and very sophisticated financial instruments ... that we don't know fully where the risks are located".
- FT article

Markets increasingly vulnerable

15 Jun 2007

ECB sees the financial system, especially the financial markets, as becoming more vulnerable to an abrupt decline in market liquidity. -Press release

Liquidity shortages worldwide

9 Aug 2007

Tensions related to US sub-prime mortgages start to cause shortages of liquidity in money markets around the world.

Interbank lending slows down

9 Aug 2007 - 14 Aug 2007

The ECB provides liquidity to permit orderly functioning of the money market. From 9-14 August it injects €335 billion into the euro area banking system. Press release History of all ECB open market operations

Central banks seek to ease pressures in short-term funding markets

12 Dec 2007

The Bank of Canada, the Bank of England, the ECB, the Federal Reserve and the Swiss National Bank announce measures to address elevated pressures in short-term funding markets. The ECB’s Governing Council decides to take joint action with the Federal Reserve by offering US dollar funding to Eurosystem counterparties. The Eurosystem plans to conduct two US dollar liquidity-providing operations against ECB-eligible collateral, in connection with the US dollar Term Auction Facility.
Press release

ECB offers refinancing operations with longer maturities

28 Mar 2008

The ECB introduces six-month longer-term refinancing operations to support the normalisation of the functioning of the euro money market.
Press release

ECB increases interest rates by 25 basis points

3 Jul 2008

Press release

Lehman Brothers files for bankruptcy

15 Sep 2008

G7 vows to protect financial system

22 Sep 2008

G7 finance ministers and central bank governors reaffirm their commitment to protect the integrity of the international financial system.
Press release

ECB and Fed step up efforts to alleviate tension in short-term funding markets

29 Sep 2008

In response to continued strains in short-term funding markets, central banks announce further coordinated actions to expand significantly the capacity to provide US dollar liquidity. The Federal Open Market Committee of the US’ Federal Reserve and the ECB’s Governing Council decide to double their temporary reciprocal currency arrangements (swap lines) from USD 120 billion to USD 240 billion. These larger facilities should allow expanding the provision of US dollar liquidity in the euro area.
Press release

EC aims to improve protection for bank deposits

15 Oct 2008

The European Commission proposes to increase minimum protection for bank deposits to €100,000 to maintain the confidence of depositors in the financial safety net.
Commission page on the Deposit Guarantee Schemes

ECB cuts interest rates by 50 basis points

6 Nov 2008

Press release

G20 seeks to boost growth and prevent crises

15 Nov 2008

The G20 leaders meet in Washington to discuss efforts to strengthen economic growth and to lay the foundation for reform so as to avert similar crises in the future.
Summit declaration

ECB cuts interest rates by 75 basis points

4 Dec 2008

Press release

G20 to step up economic cooperation

25 Sep 2009

The G20 leaders, meeting in Pittsburgh, review progress in tackling the economic crisis and agree to improve international economic cooperation.
Statement

EU to create new supervisory authorities

2 Dec 2009

EU finance ministers agree to create three new European authorities to supervise banking, insurance and securities markets: the European Banking Authority; the European Insurance and Occupation Pensions Authority; the European Securities and Markets Authority.
ECOFIN conclusions

ECB to end US dollar/euro swaps

27 Jan 2010

The ECB’s Governing Council decides to discontinue the temporary swap lines with the US Federal Reserve System on 1 February 2010. These lines, established in October 2008 to counter pressures in global funding markets, are no longer needed as the financial markets are functioning better.
The decision is taken in agreement with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank.
Press release

ECB welcomes Greek government’s consolidation measures

3 Mar 2010

The ECB’s Governing Council reacts positively to the Greek government’s additional fiscal consolidation measures and comments that very swift implementation of these measures is needed.
Press release

Greece seeks financial support

23 Apr 2010

Greece officially requests financial support from the euro area countries and the IMF.
Joint statement by the European Commission, the ECB and the Presidency of the Eurogroup on Greece

Loan package for Greece agreed

2 May 2010

The euro area countries and the IMF agree on a €110bn loan package to Greece.
EU Commission web page on the agreement

The European Financial Stability Facility is established

7 Jun 2010

European Financial Stability Facility (EFSF) is established
Statement by the Eurogroup

Bank stress tests results published

23 Jul 2010

The Committee of European Banking Supervisors publishes the results of the banking stress tests.
Q&Aon the stress tests

Statement by EC, ECB and IMF on Greece

5 Aug 2010

Teams from the ECB, the European Commission and the IMF in Athens for the first quarterly review of the Greek government’s economic programme state that “the overall assessment is that the programme has made a strong start. However, important challenges and risks remain”.
Press release

Ireland seeks financial support

21 Nov 2010

The Irish government requests financial support from the EU and euro area countries. EU finance ministers concur with the Commission and the ECB that providing assistance to Ireland is warranted to safeguard financial stability in the EU and in the euro area.
Statement by Eurogroup and ECOFIN Ministers.

EU-IMF package for Ireland agreed

7 Dec 2010

Following Ireland’s request for financial assistance from the EU, EU finance ministers agree on a joint EU-IMF financial assistance package, on the basis of a programme negotiated with the Irish authorities by the European Commission and the IMF.
Commission web page on the agreement

New EU supervisory bodies created

1 Jan 2011

In response to the financial crisis, three new European authorities are set up: the European Banking Authority in London, the European Securities and Markets Authority in Paris and the European Insurance and Occupational Pensions Authority in Frankfurt. They supervise the financial activities of banks, markets, insurance companies and pension funds, respectively.
Statement by Commissioner Barnier

G20 to focus on imbalances

19 Feb 2011

G20 finance ministers and central bank governors, meeting in Paris, agree on a two-step process and a set of indicators to focus policy action on persistently large macroeconomic imbalances.
G20 communiqué

Euro area leaders agree on “Pact for the Euro”

11 Mar 2011

The pact establishes stronger economic policy coordination for competitiveness and convergence, and represents a strong political commitment by European heads of government.
Conclusions of the euro area leaders.

Portugal requests activation of aid mechanism

6 Apr 2011

Statement by the Eurogroup and ECOFIN Ministers

Memorandum of Understanding signed on Portugal’s request for aid

17 May 2011

Text of the memorandum

Financial Stability Review identifies key risks to financial stability

15 Jun 2011

The ECB’s Financial Stability Review identifies five key risks to the stability of the euro area financial system and provides a comprehensive assessment of the capacity of the financial system to absorb adverse disturbances.
Financial Stability Review

Enhanced European Financial Stability Facility becomes fully operational

13 Oct 2011

After ratification by the euro area countries, the EFSF becomes operational. It has an effective lending capacity of €440 billion through guarantee commitments from those 17 countries.
EFSF

G20 pledges to preserve financial stability

14 Oct 2011

G20 finance ministers and central bank governors reaffirm their commitment to take all necessary actions to preserve the stability of banking systems and financial markets.
G20 communiqué

Eurogroup agrees on second financial aid package for Greece

21 Feb 2012

Euro area finance ministers agree on the basis for a second aid package, including stronger on-site monitoring by the European Commission, the creation of an escrow account, private sector debt restructuring and an additional retroactive lowering of the interest rates of the Greek Loan Facility. Governments of Member States whose central banks currently hold Greek government bonds in their investment portfolio commit to pass on to Greece an amount equal to any future income accruing to their national central bank stemming from this portfolio until 2020.
Eurogroup statement

European leaders sign fiscal compact

01 Mar 2012

In the margins of the European Council, 25 European leaders sign the Treaty on Stability, Coordination and Governance, also known as the “fiscal compact”, as agreed on 9 December 2011. It aims to strengthen fiscal discipline and introduce stricter surveillance within the euro area, notably by establishing a “balanced budget rule”.
European Council conclusions

ECB allots €530 billion to 800 banks in second 36-month refinancing operation

01 Mar 2012

Open market operations

ECB reactivates eligibility of Greek bonds as collateral

08 Mar 2012

The ECB’s Governing Council acknowledges the activation of the buy-back scheme for Greece and decides that marketable debt instruments issued or fully guaranteed by Greece will be again accepted as collateral in Eurosystem credit operations, without applying the minimum credit rating threshold for collateral eligibility, until further notice.
Press release

Cyprus requests financial support

27 Jun 2012

The Cypriot government requests financial aid from the euro area members and the IMF in order to tackle the distress in the country’s banking sector and the macroeconomic imbalances. Eurogroup ministers invite representatives from the Commission, in cooperation with the ECB, IMF and the country’s authorities, to formulate a programme and take the actions necessary to preserve financial stability, taking into account the spillover effects from sovereign market turbulence and the difficult external environment.
Statement by the Eurogroup

Spain seeks financial support

27 Jun 2012

The Spanish government requests financial assistance from the euro area members. Eurogroup ministers agree with the Commission’s assessment that assistance is justified to ensure the euro area’s financial stability.
Statement by the Eurogroup

Statement by European Commission, ECB and IMF on review mission to Ireland

12 Jul 2012

Staff teams from the European Commission, the ECB and the IMF visited Dublin from 3-12 July for the seventh review of country’s economic programme. The report concludes that despite a challenging environment the implementation of the programme remains strong. The report also notes that the authorities are making progress with reforms to restore the Irish financial sector to health but that growth prospects for 2012 and 2013 remain modest. With continuing high unemployment, job creation and generating growth remain a critical priority.
Press release

Eurogroup grants financial assistance to Spain's banking sector

20 Jul 2012

Euro area finance ministers agree unanimously to provide Spain with financial assistance in order to support the recapitalisation of the country’s financial institutions. The ministers agree that the funds will be channelled to the financial institutions in question by the Spanish government agent, the Fund for Orderly Bank Restructuring.
Statement by the Eurogroup