The story so far
In 2002 Greece joined the newly formed Eurozone, giving up its currency, the Drachma.
In 2004 Eurostate questioned the economic data that the Greek government had submitted in its Eurozone application. In 2006 it was found that, at the time of joining the Euro, the Greek deficit was 6.1%, more than twice the allowed limit for entry into the Eurozone.
As the global recession set in, Greece's financial troubles were slowly brought into international focus, in autumn 2009 the Greeks ousted their conservative government and elected this man as their Prime Minister:
of the Pan-Hellenic Socialist Movement.
Almost immediately after his inauguration, Papandreou revealed that Greece's deficit was 12.7% of GPD and the country had a public debt of $410bn.
Things naturally went rapidly downhill from here..
A Timeline of subsequent events.
* A new Greek government is formed after the election, led by PASOK, which received 43.92 % of the popular vote, and 160 of 300 parliament seats.
* 5 Nov.: New budget draft reveals a deficit of 12.7% of GDP, more than twice the previously announced figure.
* 8 Nov.: Final budget draft aims to cut deficit to 8.7% of GDP in 2010. Draft also projects total debt rising to 121% of GDP in 2010 from 113.4% in 2009.
* Dec. 8: Fitch Ratings cuts Greece's rating from A- to BBB+ with a negative outlook.
* Dec. 14: Greek PM Papandreou outlines first round of policies to cut deficit and regain investor trust.
* Dec. 16: S&P cuts Greece's rating to BBB+ from A-.
* Dec. 22: Moody's cuts Greece's rating to A2 from A1.
* Jan. 14: Greece unveils the Stability and Growth Program which aimst to cut deficit from 12.7% in 2009 to 2.8% in 2012.
* Jan. xx: 5-year bond issue is five-times oversubscribed but yields and spreads rise.
* Feb. 2: Government extends public sector wage freeze to those earning less than EUR 2,000 a month.
* Feb. 3: EU Commission backs Greece's Stability and Growth Program and urges it to cut its overall wage bill.
* Feb. 24: One-day general strike against the austerity measures halts public services and transport system.
* Feb. 25: EU mission in Athens with IMF experts delivers grim assessment of country's finances.
* Mar. 5: New public sector wage cuts and tax increases is passed and estimated to generate savings of EUR 4.8 bn. Measures include increasing VAT by 2% to 21%, cutting public sector salary bonuses by 30%, increases on fuel, tobacco and alcohol consumption taxes and freezing state-funded pensions in 2010.
* Mar. 11: Public and private sector workers strike.
* Mar. 15: EMU finance ministers agree on mechanism to help Greece but reveal no details.
* Mar. 18: Papandreou warns Greece will not be able to cut deficit if borrowing costs remain as high as they are and may have to go to the IMF.
* Mar. 19: European Commission President José Manuel Barroso urges EU member states to agree a standby aid package for Greece. Barroso says the EMU countries should be on stand by to make bilateral loans.
* Mar. 25: ECB President Jean-Claude Trichet says his bank will extend softer rules on collateral (accepting BBB- instead of the standard A-) for longer (up to 2011) in order to avoid a situation where one ratings agency (Moody's) basically decides if an EMU country's bonds are eligible for use as ECB collateral.
* Mar.: €5bn in 10-year Greek bonds sold - orders for three times that amount are received.
* Apr. 11: EMU leaders agree bailout plan for Greece. Terms are announced for EUR 30 bn of bilateral loans (roughly 5% for a 3-year loan). EMU countries will participate in the amount based on their ECB country keys. Rates for variable rate loans will be 3m-Euribor plus 300 bp + 100 bp for over 3-year loans plus a one-off 50 bp charge for operating expenses. For fixed rate loans rates will be swap rate for the loan's maturity, plus the 300 bp (as in variable) plus the 100 bp for loans over 3 years plus the 50 bp charge.
* Apr. 13: ECB voices its support for the rescue plan.
* Apr. 15: Olli Rehn says there is no possibility of a Greek default and no doubt that Germany will participate in the bail out plan. In the mean time there had been serious objections from parts of German society to the country's participation in the Greek bail-out.
* Apr. Sale of more than 1.5 billion euros Greek Treasury bills met with "stronger-than-expected" demand, albeit at a high interest rate.
* Apr. 23: Greece officially asks for the disbursement of money from the aid package effectively activating it.
* Apr. 27: Standard and Poor's downgrades Greece's debt ratings below investment grade to junk bond status.
* Apr. 27: S&P downgrades Portugese debt two notches and issues negative outlook, warning that further downgrades to junk status are likely. Stock indices around the world drop two to six percent on the news.
* Apr. 28 S&P downgrades Spanish bonds from AAA to AA-
Oh also, Ireland, Portugal and Spain are in trouble too. Fun times.