The Eurozone sovereign-debt crisis
- Date
- Beginning 2 May 2010
- Category
- Economy & trade
- Region
- Europe
- Era
- Contemporary
- Significance
In late 2009 Greece revealed that its budget deficits were far larger than previously reported, and by April 2010 credit-rating agencies had downgraded Greek bonds to junk status, freezing the country out of private capital markets and threatening sovereign default.
On 2 May 2010 the European Commission, European Central Bank and International Monetary Fund—the 'Troika'—launched a €110 billion bailout conditioned on severe austerity: tax rises, pension and public-sector wage cuts, and privatisations. The crisis spread across the currency union's periphery: Ireland accepted a rescue in November 2010, Portugal in May 2011, and Spain, Italy and Cyprus came under acute market pressure. The European Financial Stability Facility and later the permanent European Stability Mechanism were created to contain contagion, and in 2012 ECB President Mario Draghi's pledge to do 'whatever it takes' helped calm markets. Greece received further bailouts and a large debt restructuring, but austerity produced a deep depression, mass unemployment and severe social hardship. The episode exposed the design flaw of a monetary union without a fiscal union, fuelled anti-austerity and eurosceptic movements, and reshaped European economic governance.
One piece of history in your inbox, weekly
New empires, events and features as they land — one good email a week. No spam, unsubscribe anytime.
Related economy & trade events
- Launch of the euro1 January 1999 (notes & coins 2002)
- The global financial crisis and the collapse of Lehman Brothers15 September 2008
- China's Reform and Opening-Up Begins Under Deng XiaopingDecember 18, 1978
- China becomes the world's second-largest economy2010
- Apple's App Store launches the app economy10 July 2008
- M-Pesa launches mobile money in KenyaMarch 2007 (launched 2007)
Further reading
The wider story
The Silk Roads: A New History of the World
Best-selling world history told through the trade routes that moved goods, faiths and ideas.
Get it on Amazon →As an Amazon Associate, Human Saga earns from qualifying purchases.