The Next 12 Pivotal Dates You Can't Miss In Europe

Danger Electricity Sign

Photo: Martin Deutsch via Flickr

With Greece running amok and the markets blissfully continuing to rally, it’s an odd time to be watching Europe.In general, however, everyone agrees that the eurozone is still the big disaster waiting to happen. That was even apparent in President  Obama’s budget plan, which suggested that a European catastrophe was one of the biggest risks to the American economy right now.

It seems we’re nearing a crucial moment in Europe right now, with Greece closer than ever to default and EU leaders less willing than ever to mitigate the problems there. Are we about to jump off the precipice?

Wednesday, February 15

Eurozone finance ministers will hold a conference call to talk about whether Greece's leaders have made sufficient commitments to austerity with the newest round of austerity measures passed Monday. This was initially scheduled to be an in-person meeting, however this afternoon we learned that some leaders thought Greece had not gone far enough towards accomplishing these goals.

When they met on February 9, they rejected Greece's commitments to austerity, saying that these provisions must be written into law. However, ministers were also sceptical that these cuts were sufficient to reduce Greece's public debts to make them sustainable in the long term.

Friday, February 17

German Chancellor Angela Merkel will meet Italian PM Mario Monti in Rome for a 'deep dialogue' on how Greece can receive the bailout aid it has been promised under the second bailout. Monti has waxed sympathetic to Greek leadership, and is also concerned about how handling of the Greek situation will affect Italy.

Monday, February 20

Eurozone finance ministers will meet again in Brussels. If necessary, they'll continue to debate the terms of the Greek bailout. Also look for discussions of private sector involvement in the bailout--and possibly a European Central Bank contribution--to heat up, and some discussion on that matter will likely also come up.

Tuesday, February 21

European Union finance ministers (the Ecofin) will meet in Brussels. Expect them to continue the discussions on the Greek bailout, and talk about the fiscal compact EU leaders announced back in December. Last (and probably least), they will discuss the EU's budget for the coming year.

Notable here will be the differences in opinion between euro and non-euro EU representatives. These have been growing larger of late.

Saturday, February 25

Group of 20 finance ministers and central bank governors will meet in Mexico City. Depending upon the progress of a Greek bailout, methods to restrain the effects of a Greek disorderly default could be a topic of discussion.

Also on the table will be efforts to increase the IMF funding available to create a firewall against contagion in Europe. Managing Director Christine Lagarde has said that she might be able to wheedle more funding out of the fund's contributors if eurozone countries increase their contributions, however this remains unlikely and would not take effect for many months.

Monday, February 27

The lower house of the German parliament, the Bundestag, will vote on the new Greek aid package. (They might not be the only parliament to vote on the plan, but this is one of the few dates that's firm.)

If the Bundestag fails to approve the deal, then Greece is pretty much on its own. German representatives have been wary of doling out more money that they won't get back, and while any decision handed down from Merkel is likely to pass, margins are getting slimmer and standards are getting higher to shove such plans through.

Tuesday, February 28

The European Central Bank will hold its second, highly anticipated three-year long-term refinancing operation.

In the first such operation in December, the banks requested and received €489 billion ($643 billion) of funding at ultra-low rates. Analysts are expecting a similar, if not larger, take-up in the second operation, even though ECB President Mario Draghi said last month that he expected the allotment in the second operation to be smaller this time around.

This operation also incorporates new rules that allow French, Cypriot, Spanish, Italian, Irish, Austrian, and Portuguese central banks to relax rules on the collateral domestic banks have to offer up in return for funding.

The Irish Attorney General will also have to decide by this date whether to schedule a public referendum on the new EU treaty incorporating a financial compact.

Thursday, March 1-Friday, March 2

EU leaders will hold their next summit in Brussels at the beginning of March. They will try and stitch together the final details of what happens to Greece later in the month when debts mature that it cannot pay off--be it a bailout, a hard default, or perhaps even exit from the euro.

Tuesday, March 6

Greece means to complete the private sector bond swap by this date.

This is taking into account a lot of assumptions, however:

  • Greek officials and private creditors can reach a deal on the debt swap.
  • That deal is acceptable to a significant number of bondholders.
  • There are no legal challenges to this deal.

Not only do we think the swap is unlikely to happen by this date, we're not convinced that EU leaders can avoid provoking a credit event, at least not without destroying the market for credit default swaps in Europe.

Thursday, March 8

The European Central Bank will make its March decision on interest rates. We'll be looking to hear more about the central bank's outlook on the eurozone economy, and investors will probably be hoping for more activist measures: another LTRO, true QE, losses on holdings of Greek bonds, or perhaps even a commitment to stand behind countries' debts to prevent contagion. (The last one would be a stretch, however.)

Monday, March 12

Eurozone finance ministers will meet again, though it's too soon to tell which worries will be at the top of their mind at this point. Likely, they will focus on Greece, which could be only days from having to default on its debts if it does not receive aid in time.

Tuesday, March 20

This is the big day for Greece.

€14.4 billion ($18.9 billion) in Greek government bonds mature, and they won't have the funds to pay off this debt without the next round of troika aid. While they technically have a week-long grace period to actually pay off their creditors (meaning the date of default could be as late as March 27), we will probably know by this date whether Greece will be able to avoid a hard default.

Now here's what we're worried about...

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.