Timeline: Greece's economic crisis

(Reuters) - The 16-nation euro zone remains divided over whether and how to provide financial help to Greece as it struggles to cope with soaring debt and deficits.

Following is a timeline of economic events in Greece since George Papandreou's socialist PASOK party won a 2009 election.

November 2009 - The new government pledges in its 2010 draft budget to save Greece from bankruptcy by cutting the budget deficit of 12.7 percent of GDP, more than double the previously announced figure, while keeping electoral vows to help the poor.

-- A final budget draft on November 20 shows Greece aims to cut the deficit to 8.7 percent of GDP in 2010 to show EU partners and markets it is serious about restoring fiscal health.

-- It also sees public debt rising to 121 percent of GDP in 2010 from 113.4 percent in 2009. EU 2010 forecasts on Greece see the deficit at 12.2 percent of GDP and national debt rising to 124.9 percent, the highest ratio in the EU.

December 2009 -- S&P puts Greece's A- sovereign rating on negative watch. Fitch Ratings, which had cut Greece to A- when the government revealed the higher deficit, cuts Greek debt to BBB+ with a negative outlook, the first time in 10 years a ratings agency has put Greece below the A investment grade.

-- December 14, Papandreou outlines policies to cut the budget deficit. He pledges a 10 percent cut in social security spending in 2010 and says he will abolish bonuses at state banks and put a 90 percent tax on private bankers' bonuses. He promises to fight corruption and tax evasion, announces an overhaul of the pension system in six months and a new tax system that will make the wealthy carry a bigger burden.

-- S&P cuts Greece's rating to BBB+, saying austerity steps unlikely to produce sustainable reduction in public debt burden.

-- December 19 yield spreads between Greek and benchmark German 10-year Bunds widen to an average 272 basis points, the widest in more than eight months, as markets continue to sell Greek government bonds and stocks.

-- December 22 - Moody's cuts Greek debt to A2 from A1. Spread between 10-year Greek and German Bunds tightens because downgrade less severe than expected.

January 2010 - Greece unveils stability programme. Aims to cut budget gap to 2.8 percent of GDP in 2012. Unions protesting against the austerity plan announce strikes for February.

February 2010 - Government says will extend public sector wage freeze to those making below 2,000 euros a month for 2010, excluding seniority pay hikes.

-- EU Commission says it backs Greece's plan to reduce its budget deficit and urges Greece to cut its overall wage bill.

-- Greece must refinance 54 billion euros in debt in 2010, 20 billion euros becomes due in the second quarter. A 5-year bond issue in January is five times oversubscribed but the government has to pay a hefty premium.

-- A one-day strike on February 24 against the austerity measures cripples Greece's transport and public services.

-- An EU mission to Athens with IMF experts delivers a grim assessment of the nation's economy on February 25, seeing a deeper than expected recession and higher borrowing costs.

-- Finance Ministry official says the inspectors anticipate Greece can cut the deficit by about 2 percentage points, short of a 4 percentage point target for 2010. This will mean additional economy measures worth 4.8 billion euros.

March 2010 - EU Economic Affairs Commissioner Olli Rehn asks Greece to announce further measures to tackle its budget crisis.

-- New package of public sector pay cuts and tax increases passed by the government on March 5 to save an extra 4.8 billion euros. The measures include raising VAT by 2 percentage points to 21 percent, cutting public sector salary bonuses by 30 percent, increases in tax on fuel, tobacco and alcohol, and freezing state-funded pensions in 2010.

-- On March 9, Papandreou, visiting Washington, says President Barack Obama encouraged Athens' effort to curb speculators who they blame for worsening the debt crisis. The idea will be examined by the G20 at its next summit.

-- Public and private sector workers strike on March 11.

-- March 15, euro zone finance ministers agree on a mechanism that will allow them to help Greece financially if needed, but reveal no details except that it would be without loan guarantees.

-- March 18, Papandreou warns Athens will not be able to make deficit cuts if its borrowing costs remained high and may have to call in the IMF. Athens denies planning to turn to IMF as soon as April if the EU does not agree on a rescue plan.

-- March 19, European Commission President Jose Manuel Barroso urges EU member states to agree a standby aid package for Greece. Barroso said the 16 countries that share the euro currency should be ready to make coordinated bilateral loans.

-- March 22, Barroso challenges German Chancellor Angela Merkel to rise above domestic politics and help to decide at an EU summit on Thursday and Friday on a support mechanism for Greece or risk harm to their common currency.