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Eurogroup says Greece meets conditions for second bailout

EU 09/03/2012

Athens by night, view of Acropolis from Lykavittos hill © iStock/fazon1

The disbursement of the European Financial Stability Facility bonds can now proceed as planned following Greece’s implementation of all agreed prior actions.

In early 2010, rising government deficits and debt levels set off a crisis of confidence in European sovereign bonds and in the euro. The market turmoil centred on Greece, which had a budget deficit in 2009 far higher than the country had forecast. To reassure investors, the EU and IMF put together a €110bn bailout package for Greece in early May 2010, marking the first rescue of a euro area member. Later that month, with markets still roiling, the EU and IMF set up a crisis fund for other euro area countries in difficulty.

Timeline of developments:

09/03/2012 – Eurogroup says Greece meets conditions for second bailout

21/02/2012 – Eurogroup agrees on second bail-out programme for Greece

11/10/2011 – Latest review mission report from Commission, ECB and IMF

02/09/2011 – European Commission, the ECB and IMF leave Athens and ask the Greek authorities to complete their work

20/06/2011 – Euro area ministers delay new financing strategy for Greece and put conditions on the country

16/11/2010 – Euro area issues statement on the progress made by Greece

15/11/2010 – Greece’s deficit for 2009 stands at 15.4 %

07/09/2010 – Finance ministers add more surveillance measures to monitor Greek debt

10/05/2010 – Finance ministers adopt European stabilisation mechanism

02/05/2010 – Euro area and the IMF offer Greece €110bn in emergency loans over three years to help the country avoid debt default. Greece announces €30bn worth of additional tax increases and spending cuts

23/04/2010 – Greece asks the EU to activate €30bn in standby aid

22/04/2010 – Eurostat says Greece’s 2009 deficit was 13.6% of GDP, not the 12.7% the country reported

11/04/2010 – Euro area finance ministers agree to put €30bn in bilateral loans on standby for Greece

25/03/2010 – Euro area leaders and the IMF agree to help Greece

14/01/2010 – EU report says Greece misreported some of the data it sent to the Commission in spring 2009 to make its deficit appear smaller. The country announces a deficit reduction programme

05/11/2009 – Greek government says its 2009 budget deficit will be 12.7% of GDP

16/10/2009 – Greece’s new government says previous estimates of its deficits were wrong and that the 2009 deficit will exceed 10% of GDP

17/02/2009 – Greece estimates that its deficit would reach 3.7% in 2009. EU puts Greece and five other countries under the excessive deficit procedure to bring their budget shortfalls below 3% of GDP

Autumn 2008 – A global financial crisis affects the EU economy. All member countries are affected, especially Greece

Next Step: disbursement of new tranche of aid for Greece: More on Greece’s economy