Timeline: Ireland unveils new austerity plan

(BestGrowthStock) – Following is a timeline of Ireland’s economic troubles in the past two years, as the country unveiled a four-year austerity plan on Wednesday.

May 7, 2008 – Brian Cowen is elected prime minister as allies and opponents warn the former finance minister he faces a tough task steering country through an economic slowdown.

— Cowen reassigns justice minister Brian Lenihan to the post of finance minister. September 25, 2008 – Ireland becomes first euro zone country to slide into recession in 2008 after its property bubble bursts.

September 30 – Ireland becomes one of the first countries to respond to the collapse of U.S. investment bank Lehman Brothers, approving a guarantee covering 400 billion euros ($532.2 billion) of liabilities at six Irish-owned banks. The package is later increased to 485 billion euros to cover foreign-owned banks with significant operations in Ireland.

December 21 – Ireland agrees to inject 5.5 billion euros ($7.7 billion) into its three main banks, taking Anglo Irish Bank under its control.

February 4, 2009 – Cowen says senior executives hired to work at banks receiving state funds should face at least a 25 percent cut in remuneration and their salaries should be capped.

March 30 – Standard and Poor’s downgrades Ireland’s credit rating from AAA to AA+ and says it could drop further, in a sign of no-confidence in Dublin’s efforts to get its public finances under control. Fitch strips Ireland of its AAA credit rating on April 8, reducing it to AA-plus.

April 8 – Lenihan outlines 10.6 billion euros in spending cuts for 2010-2011 and forecasts an additional 3.25 billion euros from taxation in that period in an emergency budget, the second in six months.

December 9 – Ireland’s 2010 budget delivers savings of more than 4 billion euros, slashing public pay and welfare to try to halt the soaring deficit.

July 19, 2010 – Moody’s cuts Ireland’s credit rating by one notch to Aa2, saying the country faces a slow climb out of recession as the cost of the rescue of its banking sector mounts.

August 25 – Standard and Poor’s cuts Ireland’s long-term rating by one notch to AA- and gives the country a negative outlook, a move criticized by the Irish debt management agency.

September 30 – Ireland discloses a worst case price tag of more than 50 billion euros ($68 billion) for bailing out its banks and announces it will have to make more budget savings. October 6 – Fitch cuts Ireland’s credit rating to A+ from AA-, citing the huge cost of cleaning up its banks. Fitch also puts its rating on negative outlook.

November 3 – The government bows to pressure from its junior party and the High Court to hold a late November vote to fill parliamentary seats that could cut its majority to just two.

November 8 – EU Economics Commissioner Olli Rehn, visiting Ireland, says he has not discussed any need for an EU bailout, adding he believes market confidence would be restored once the country published its four-year plan to cut debt.

Nov 16 – Euro zone finance ministers agree to lay the groundwork for bailing out Ireland’s banking sector with the IMF, but say Dublin has to decide itself whether to request the aid. It agreed to let EU, IMF and European Central Bank technical experts visit Ireland to look at how to deal with its banking problems.

November 21 – EU finance ministers welcome an Irish request for EU financial aid as the loan program will safeguard the euro zone’s financial stability.

November 22 – EU and IMF officials begin working out details of the rescue package.

— Cowen’s coalition partner, the Green Party, says it will support the government until the budget is passed and the EU/IMF bailout is in place, but will then leave the coalition.

November 24 – Ireland reveals a 15 billion euro ($20 billion) four-year austerity plan imposing spending cuts and tax increases to help pay for a bank crisis and meet the terms of an EU/IMF rescue.

— The plan includes thousands of public sector job cuts, phased-in increases in Ireland’s value-added tax (VAT) rate from 2013 and social welfare savings of 2.8 billion euros by 2014.

Timeline: Ireland unveils new austerity plan