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The financial and economic crisis - a chronological overview - December 2009

The crisis has called for concerted action at both the European and the international level. The EU has taken a series of bold measures to restore confidence, stability and sustainability  in the financial markets.

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17 December 2009
Statement on Romania after EU/IMF joint technical mission

The discussions under the multilateral assistance programme focused on fiscal policy issues. Agreements for 2010 at technical level set fiscal consolidation measures mostly on expenditure. With improved macroeconomic outlook for 2010, these measures seem sufficient to achieve the government deficit target set in the programme. However, structural reforms will remain important for sustainable economic adjustment.

The Commission hopes to conclude the review by end January 2010. This would release a tranche of EUR 1 bn under the EU balance of payments assistance programme.
>> MEMO/09/565. Statement on Romania after EU/IMF joint technical mission Choose translations of the previous link 

15 December 2009
Statement by Commissioner Commissioner Almunia on Greece

"We take note of the Greek government's commitment -- as reiterated yesterday evening by Prime Minister Papandreou -- to cut public deficits and reduce government debt through permanent expenditure cuts and revenue increases."
>> MEMO/09/555. Statement by Commissioner Commissioner Almunia on Greece Choose translations of the previous link 

10 - 11 December 2009
European Council
>> Council (17066/09). Conclusions adopted by the Council on 2 December on Exit strategies
>> Council (17398/09). Letter by the Chairman of the ECOFIN Council on the progress made on financial supervision
>> European Council. Presidency conclusions

9 December 2009
Statement by Commissioner Commissioner Almunia on Greece

"We take note of the fact that the sustainability of public finances in Greece draws the attention of financial markets and rating agencies."
>> MEMO/09/541. Statement by Commissioner Almunia on Greece Choose translations of the previous link 

1 - 2 December 2009
Meetings of finance ministers - Eurogroup and ECOFIN

The Council agreed to create the three European authorities to supervise banking, insurance and securities markets:

  • The European Banking Authority (EBA)
  • The European Insurance and Occupation Pensions Authority (EIOPA)
  • The European Securities and Markets Authority (ESMA)

As part of the reform of the EU supervisory framework after the financial crisis, the new authorities are scheduled to be put in place in 2010. The Council also confirmed to establish the European Systemic Risk Board (ESRB) and specific competences for the European Central Bank.

Agreement on exit strategies

Ministers agreed on principles for the coordinated exit strategy of public support schemes. Coordination among Member States should avoid negative spill-over effects and will account for national specificities. The timing of the exit should take into account a broad range of elements, including

  • macroeconomic and financial sector stability
  • the functioning of credit channels
  • systemic risk assessment and
  • the pace of natural phasing out by banks

Member States will thus be allowed to exit from support schemes at different times by maintaining adequate competition. The EFC in cooperation with the Commission, CEBS and the ECB will closely monitor the developments and further discuss possible ways to phase out public support schemes. The EFC should report such progress to the Council by February 2010 and then on a regular basis.

Excessive deficit procedure (EDP)

The Council opened EDPs and issued recommendations on corrective action for nine Member States: Belgium, the Czech Republic, Germany, Italy, the Netherlands, Austria, Portugal, Slovenia and Slovakia.

Ministers also issued revised recommendations on measures for Ireland, Spain, France (EDPs since April 2009) and the United Kingdom (EDP since July 2008) to correct their excessive deficits.

Furthermore, the Council established that Greece's response to its recommendation on measures to correct its excessive deficit has been insufficient.

Deadlines for corrective action

The Council however found that there were special circumstances due to the impact of the global economic crisis. This would warrant correction of the deficit in the medium term, rather than the short term. The Council set the new deadline for corrective action to 2 June 2010 and outlined the strategy to reduce excessive deficits per country.

On the basis of the Commission autumn 2009 economic forecasts, the Council called on Belgium and Italy to reduce their deficits below the 3% of GDP threshold by 2012, the Czech Republic, Germany, Spain, France, the Netherlands, Austria, Portugal, Slovakia and Slovenia to do so by 2013, Ireland by 2014 and the UK by the 2014-15 financial year.
>> Council conclusions
>> Economic and Financial Affairs. Excessive deficit procedure. Country-specific procedures



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