by Biodun Iginla of the Economist Intelligence Unit

Fri Dec 10, 2010 11:53am EST

 Dec 10  - Following are upcoming events linked to the debt crisis in the euro zone:

 * IRELAND:

 BUDGET:

 -- January 2011 - Ireland's parliament will pass the final bill underpinning its 2011 budget this month, completing the budgetary process. No date set yet.

 -- The passage of the Finance Bill will be the cue for Prime Minister Brian Cowen to call a parliamentary election.

 (See below)

 GOVT DEBT SUPPLY:

 -- Bond and treasury bill auctions have been cancelled for the rest of 2010.

 -- Finance Minister Brian Lenihan has said the government will start accessing some of its 85 billion euros aid package from the EU and the IMF in early 2011.

 DATA:

 -- Dec 16 - Third Quarter National Accounts

 -- Dec 16 - Wholesale Price Index November 2010

 -- Dec 16 - Third Quarter Balance of Payments

 POLITICS:

 -- Q1 2011 - An early general election that Prime Minister Brian Cowen is likely to lose is widely expected in early 2011 after the Green Party said it would pull out of his coalition government next year. No date has been set.

 IMF PACKAGE:

 -- END Q1 2011 - All 2011 budget measures need to be approved by parliament.

 -- MAY 2011 - Deadline for government to reduce national minimum wage by 1.00 euros per hour.

 -- MAY 2011 - Deadline for new legislation reforming unemployment and welfare benefits systems.

 -- END Q2 2011 - Government must submit a timetable for implementing reforms agreed with the IMF and EU.

 -- END Q2 2011 - Deadline for legislation increasing state pension age to 66 years in 2014, 67 in 2021, 68 in 2028.

 -- END Q3 2011 - Legislation to liberalise legal and medical services sectors, including pharmacists.

 -- END Q4 2011 - Independent assessment of electricity and gas sectors with a view to increasing competition.

 * GREECE:

 -- Dec. 22/23 - Parliament to vote on 2011 budget.

 ECONOMIC DATA:

 -- Dec. 16 - Third quarter unemployment.

 -- Dec. 21 - October current account data.

 -- Dec. 29 - November producer price inflation (PPI).

 -- Dec. 30 - October retail sales.

 STRIKES:

 -- Dec. 15 - Greek unions stage 24-hour general strike to protest austerity measures.

 T-BILLS:

 -- The public debt agency said it would not hold a T-bill auction in December, due to a lack of investor interest in the holiday season. [ID:nLDE6AI1CC]

 * PORTUGAL:

 MEETINGS:

 -- Dec 13 - Finance Minister Fernando Teixeira dos Santos to speak at conference on public administration.

 -- Jan 23, 2011 - Presidential elections, with five candidates standing, including current president Anibal Cavaco Silva. The president in Portugal has a largely ceremonial role, although he has the right to veto legislation and mediate cross-party negotiations.

 ECONOMIC DATA:

 -- Dec 14 - National Statistics Institute releases inflation data for November.

 -- Dec 20 - Budget office publishes core state deficit data for January to November.

 -- Dec 23 - Bank of Portugal presents current account data for January to October.

 -- Jan 5, 2011 -  National Statistics Institute releases business and consumer confidence indices for December.

 -- Jan 7 - National Statistics Institute releases trade balance for September to November.

 -- Jan 10 - National Statistics Institute releases tourism data for November.

 -- Jan 11 - Bank of Portugal publishes quarterly bulletin, may include revisions of economic growth forecasts, comments on budget deficit goals and austerity measures.

 -- Jan 12 - National Statistics Institute releases inflation data for December.

 -- Jan 27 - National Statistics Institute releases business and consumer confidence indices for January.

 GOVERNMENT DEBT SUPPLY:

 -- Dec 15 - IGCP debt agency offers 500 million euros in 3-month T-bills in auction.

 * SPAIN:

 BUDGET:

 -- 2011 budget due to be passed by year-end.

 REFORM:

 -- Spain savings banks consolidation to be completed by Dec. 24

 -- Pension reform draft due to be presented by Jan 28.

 GOVERNMENT DEBT AUCTIONS:

 -- Dec 16 - Benchmark 10, 15-year bonds.

 ECONOMIC DATA:

 -- Dec 15 - Final inflation for November.

 -- Dec 16 - Q3 house prices.

 -- Dec 21 - Central gov. state deficit data Nov.

 -- Dec 23 - Industrial prices Nov.

 EUROPEAN UNION:

 -- Dec 16/17 - Two-day European Council meeting (heads of state and government).

 -- Dec 16 - European Systemic Risk Board (ESRB) meeting (Frankfurt)

 -- Jan 1, 2011 - Introduction of the euro in Estonia

by Natalie de Vallieres, BBC News EU Desk, for the BBC's Biodun Iginla

President Nicolas Sarkozy's office on Sunday categorically denied that France was threatened by the crisis in the eurozone provoked by Ireland's massive debt problems.

"We are not in the same category" as Ireland "and I note also that even the markets have not punished France in recent weeks," a presidential aide wrote in an email to me (and cc'd to Biodun Iginla) at the BBC

The aide said a front-page banner headline in Sunday's Journal du Dimanche newspaper stating "Financial Crisis: France threatened," did not "correspond to reality."

"Interest rates, in contrast to what has happened in Ireland, Portugal and Greece, have not risen... French interest rates even have more of a small tendency to fall in absolute values than to rise," the aide said.

The comments came as calls for a bailout of Portugal grow and concerns over Spain, Italy and Belgium increase.

European Union finance ministers held an emergency session in Brussels on Sunday to thrash out the final details of Ireland's 85-billion-euro (113-billion-dollar) international bailout.

16 November 2010 Last updated at 06:38 ET

by Natalie de Vallieres, BBC EU Desk, for the BBC's Biodun Iginla

Fears have grown that pressure will spread to other weaker eurozone countries

Global Economy

The European Union is in a "survival crisis" over eurozone debt problems, the EU Council president has warned.

Speaking hours before eurozone ministers meet to address threats to the bloc's economic stability, Herman Van Rompuy said that if the euro failed, so too would the EU.

Members such as the Republic of Ireland and Portugal are under fresh scrutiny.

Questions have been raised over whether they can manage their debt without help from EU funds.

Mr Van Rompuy said he was "very confident" the problems could be overcome.

But he added: "We all have to work together in order to survive with the eurozone, because if we don't survive with the eurozone we will not survive with the European Union."

Bond auction

“Start Quote

When Ireland explicitly guaranteed the Irish banking system just over two years ago, the finance minister, Brian Lenihan, said it was 'the cheapest bank bailout in the world'. It is turning out to be very expensive”

End Quote

Stephanie Flanders Economics editor, BBC News

Stephanomics: Crunch time

The Irish Republic has insisted it does not need EU help.

But there is intense speculation that both it and Portugal may be forced to use EU bail-out money.

Portugal's finance minister has said that investors believed that his country would be forced to seek emergency help, because of the worries spreading in the markets.

Fernando Teixeira dos Santos urged Dublin to do the right thing for the euro and accept a bail-out.

And the Spanish treasury secretary called on the Republic to act quickly to end market uncertainties.

On Tuesday, Spain held an auction of government bonds - a routine way for governments to raise funds.

However as Irish bail-out concerns hit other eurozone periphery countries, the rates it must pay on money borrowed - the bond yield - was higher than that faced earlier in the year.

Solidarity sought

The BBC's business editor Robert Peston said that much hinged on the stance of the European Central Bank (ECB) - which has propped up the Irish Republic's banking system with loans it could not get on the money markets.

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What went wrong in the Irish Republic

: The 1990s were good for the Irish Republic's economy, with low unemployment, high economic growth and strong exports creating the Celtic Tiger economy. Lots of multi-national companies set up in the Republic to take advantage of low tax rates.

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"Without the financial support of the ECB, Ireland would be bust right now," he said.

"But if there is the faintest sign that the ECB wants to withdraw the succour it has provided to weak eurozone banks, Ireland will no longer have a choice, it will have to go cap in hand either to its EU partners or to the IMF."

The Irish Republic's Europe Minister, Dick Roche, admitted that there were major liquidity problems at the country's banks.

However, he said that his government had made major spending cuts which would be continued in its upcoming budget, and added that he hoped there would be "solidarity" from European colleagues at the Brussels meeting.

"I would hope after the meeting there would be more logic introduced into this," he told the BBC.

"There is no reason why we should trigger an IMF or an EU-type bail-out. There is a problem with liquidity in banks, there is no doubt about that. But I don't think that the appropriate response to that would be for the European finance ministers to panic."

“Start Quote

Dublin desperately wants to keep as much control of its own affairs as possible”

End Quote

Mark Simpson BBC Ireland Correspondent

Irish reluctant to take EU handout

There are a range of funds which troubled nations could access - including the European Financial stability facility - 440bn-euro (£372bn) pot of money set up to aid eurozone countries that run into debt difficulties.

And while the UK is not part of the eurozone, its taxpayers could end up footing some of the bill for any bail-outs.

For example, there is the European Financial Stability Mechanism - a 60bn-euro, EU-wide scheme, which countries can draw on and to which the UK contributes 12%.

Also, if the International Monetary Fund (IMF) is asked to step in, the UK would fund 4.5% of any aid.

Budget brought forward?

“Start Quote

There would be a serious risk of a new credit crunch, and global recession, if the providers of that $1.5 trillion of credit to Ireland, Portugal and Greece were to lose confidence... and were to ask for their money back now”

End Quote

Robert Peston Business editor, BBC News

Read Robert's blog

The Republic of Ireland government has consistently stated its determination to restore stability to the public finances and stressed that it is "fully funded" until late 2011.

The banks have struggled since 2008, when the Irish Republic suffered a dramatic collapse of its property market.

House values have fallen between 50% and 60% and bad debts - mainly in the form of loans to developers - have built up in the country's main banks, bringing them to the verge of collapse.

Reports suggest the Republic will try to reassure markets by bringing forward details of its four-year financial plan to next week.

The proposals will be severe. It has said it will impose unprecedented spending cuts or tax rises totalling 6bn euros (£5bn) to try to bring its underlying budget deficit down from about 12% to between 9.5 and 9.75% next year.

While intended to boost confidence in the country's finances, investors fear the budget cuts could plunge the Republic back into recession, leading to further losses to the government via falling tax revenues and higher benefit payments.

by Biodun Iginla of the Economist Intelligence Unit

by Natalie de Vallieres, BBC News EU Desk, for the BBC's Biodun Iginla

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by Natalie de Vallieres, BBC EU Desk, for the BBC's Biodun Iginla

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What went wrong in the Irish Republic

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