Greece's first sovereign bailout

Shortly after taking office in late 2009, Greek prime minister George Papandreou disclosed that the country's budget deficit would exceed 12% of GDP, roughly double what previous governments had reported, exposing years of understated fiscal data. The revelation eroded investor confidence sharply, driving up the yields Greece had to pay to borrow and eventually shutting the country out of bond markets entirely. On April 23, 2010, Papandreou requested emergency assistance from Greece's eurozone partners and the IMF, and by May 9 the two had agreed a combined €110 billion rescue package, split between roughly €80 billion in bilateral eurozone loans and €30 billion from the IMF. In exchange, Greece committed to a severe program of spending cuts, tax increases and structural reforms that shrank the economy by an amount comparable to the US Great Depression in relative terms. It was the first of three successive bailout programs for Greece between 2010 and 2015, which together totaled roughly €289 billion and made Greece the opening case of what became known as the eurozone sovereign-debt crisis.