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TIMELINE-Ireland's Brian Cowen says to stay on as Taoiseach

Published 01/16/2011, 12:52 PM
Updated 01/16/2011, 12:56 PM

Jan 16 (Reuters) - Below is a timeline of Ireland's economic troubles since Brian Cowen took office as prime minister (Taoiseach):

May 7, 2008 - Brian Cowen is elected prime minister as allies and opponents warn the former finance minister he faces a tough task steering the country through an economic slowdown. Justice Minister Brian Lenihan becomes finance minister. Sept. 25, 2008 - Ireland becomes first euro zone country to slide into recession after its property bubble bursts.

Sept. 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 ($530 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.

Dec. 21 - Ireland agrees to inject 5.5 billion euros into its three main banks, taking Anglo Irish Bank under its control.

Feb. 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. 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.

Dec. 9 - Ireland's 2010 budget delivers savings of more than 4 billion euros, slashing public pay and welfare.

July 19, 2010 - Moody's cuts Ireland's credit rating by one notch to Aa2, saying it faces a slow climb out of recession.

Aug. 25 - Standard and Poor's cuts Ireland's long-term rating by one notch to AA- and gives it a negative outlook.

Sept. 30 - Ireland discloses a worst case price tag of more than 50 billion euros ($68 billion) for bailing out its banks. Oct. 6 - Fitch cuts Ireland's credit rating to A+ from AA-, citing huge rescue costs. Fitch also says outlook negative.

Nov. 8 - EU Economics Commissioner Olli Rehn says he has not discussed an EU bailout and he believes confidence will be restored once country publishes 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 agrees to let EU, IMF and European Central Bank technical experts visit Ireland to assess its banking problems.

Nov. 21 - EU finance ministers welcome an Irish request for EU financial aid as it will safeguard euro zone stability.

Nov. 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.

Nov. 24 - Ireland reveals a 15 billion euro four-year austerity plan imposing spending cuts and tax increases to help pay for the bank crisis and meet the terms of the EU/IMF rescue The plan includes thousands of public sector job cuts, phased-in increases in the value added tax (VAT) rate from 2013 and social welfare savings of 2.8 billion euros by 2014.

Nov. 28 - The EU approves an 85 billion euro rescue for Ireland and outlines a permanent system to resolve debt crises.

Dec. 7 - Ireland details the toughest budget on record, which includes 6 billion euros in tax rises and spending cuts.

Dec. 9 - Fitch becomes the first agency to strip Ireland of its 'A' credit status, slashing it by three notches to BBB+.

Dec. 10 - Parliament pushes through the third major vote underpinning its harsh 2011 budget.

Dec. 15 - Parliament approves the 85 billion euro EU/IMF bailout package, but the opposition threatens to renegotiate the deal to force losses on some senior bondholders in Irish banks.

Dec. 17 - Moody's slashes Ireland's credit rating by five notches to Baa1 with a negative outlook from Aa2 and warns of more downgrades if Ireland is unable to stabilise its debt.

Jan. 16, 2011 - Cowen says he will remain as leader of Fianna Fail and prime minister but will call election after the finance bill is passed. He also announces a vote of confidence in his leadership for Jan. 18.

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