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The financial and economic crisis - a chronological overview - November 2010

The economic crisis has prompted intense and sustained action by the EU's national governments, the European Central Bank and the Commission. All have been working closely together to support growth and employment, ensure financial stability, and put in place a better governance system for the future.

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28 November 2010
Agreement on future European Stability Mechanism (ESM)

Euro-area finance ministers agreed on the future ESM to replace the current European Financial Stability Facility (EFSF) as of mid-2013. This agreement will be reflected in the proposal for an amendment to the Treaty that Council President Herman Van Rompuy will submit to the European Council in December 2010.

The ESM will safeguard financial stability in the euro area and will build on the existing European Financial Stability Facility (EFSF) and complement the new framework for reinforced economic surveillance in the EU. This new framework, which includes in particular a stronger focus on debt sustainability and more effective enforcement measures, focuses on prevention and will substantially reduce the probability of a crisis emerging in the future.

An overall evaluation of the new mechanism will be performed by the Commission, in liaison with the ECB, in 2016.

The ESM will assist euro area Member States in financial distress in combination with a strict economic and fiscal adjustment programme.
Private sector involvement will be decided on a case-by-case basis, fully in line with IMF usual practices. There will be no automatic solutions and no prior requirement. The exact form of the participation by private creditors will depend on the specific nature of the problem to be addressed and will be fully consistent with IMF practices.

>> Memo 10/636. Question and answers. European Stability Mechanism (ESM) Choose translations of the previous link 
>> 28 November 2010. Statement by the Eurogrouppdf
>> European Council. President Van Rompuy welcomes the statement of the Eurogroup on a European stability mechanism and the agreement on the Irish programmepdf

Commission and IMF issue joint statement on Ireland

European Commissioner for Economic and Monetary Affairs Olli Rehn and Managing Director of the International Monetary Fund Dominique Strauss-Kahn have issued a joint statement on Ireland on the economic program announced today by Ireland.

>> Ecfin Article. Commission and IMF issue joint statement on Ireland

24 November 2010
EP plenary debate on economic governance

In his statement, Commission President Barroso made a number of key points on the European Council and the current economic situation. He expressed his confidence that the intended interventions for Ireland through the European European Financial Stabilisation Mechanism (EFSM) and the European Financial Stability Facility (EFSF) will allow the Irish economy to get back on the path to sustainable growth. 

On EU economic governance, Mr Barrosos stressed the importance to make the broad convergence on the Commission's legislative proposals and some other very important aspects operational by summer 2011.

Mr Barrosos also referred to the ongoing preparatory work with the President of the European Council for the future crisis resolution mechanism for the euro area, which will replace the current mechanism until 2013. As part of the overall effort to reinforce economic governance, this future mechanism would contain the three main components of a macroeconomic adjustment programme, a financing arrangement, and some form of private sector involvement.

>> SPEECH/10/681. Statement of President Barroso following the European Council on economic governance Choose translations of the previous link 

Statement on the Irish 4-year recovery plan

Commissioner Rehn welcomed the continued commitment of the Irish authorities to reducing the deficit to below 3% by 2014 a,d its four-year fiscal plan an important contribution to the stabilisation of Irish public finances. This plan is also a sound basis for the negotiations on the fiscal and structural reforms of the policy programme under the EU and IMF financial assistance Ireland has requested.

>> Memo 10/611. Statement by EU Commissioner for Economic and Monetary Affairs Olli REHN on the Irish 4-year recovery plan Choose translations of the previous link 

23 November 2010
Conclusion of the second EC, ECB, IMF review mission to Athens, Greece

The mission's overall assessment is that the program remains broadly on track. The end-September quantitative criteria have all been met. While challenges remain, significant progress has been made, particularly in reducing the fiscal deficit. 

However, further structural reforms are needed to secure Greece’s competitiveness, reinvigorate output, and increase employment. While significant progress has been made, many of the reforms that are necessary to transform Greece into a dynamic and export-driven economy require skillful design and political resolve to overcome entrenched interests. The challenge now is to implement an ambitious schedule for these next-stage reforms.

>> Economic and Financial Affairs. Statement by the EC, ECB, and IMF on their second review mission to Greece

21 November 2010
Statement by Eurogroup and ECOFIN ministers on Ireland

European finance ministers agreed that providing assistance to Ireland is warranted to safeguard financial stability in the EU and euro area. In their statement, they confirmed that the joint EU-IMF financial assistance package would be financed from the European financial stabilisation mechanism (EFSM) and the European financial stability facility (EFSF). In addition, this could possibly be supplemented by bilateral loans to be negotiated by EU Member States. The United Kingdom and Sweden already indicated their readiness to consider such loans.

EU and euro-area financial assistance will be provided under a strong policy programme which will be negotiated with the Irish authorities by the Commission and the IMF, in consultation with the ECB to address the fiscal challenges of the Irish economy in a decisive manner. After approval by the Irish Government, the programme will be endorsed by the ECOFIN Council and the Eurogroup, in line with national procedures, on the basis of a Commission and ECB assessment.

>> Economic and Financial Affairs (ECFIN). Statement by the Eurogroup and ECOFIN Ministers on Ireland

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