TIMELINE-Chronology of Spain's economic crisis

MADRID Nov 16 (Reuters) - Spain's Socialists face voters' wrath over unemployment and economic stagnation at a parliamentary election on Sunday after presiding over the country's worst slowdown since World War Two.

The euro zone's fourth largest economy has gone from growing faster than any of its neighbours to stagnation in just three years and many voters blame Prime Minister Jose Luis Rodriguez Zapatero for not reacting quickly enough when the crisis hit.

Here is a timeline of events leading up to the Nov. 20 election:

March 2008

Zapatero wins a second term in office with a small majority in parliament, leaving the Socialists reliant on regional parties to pass legislation.

Economy Minister Pedro Solbes cuts the 2008 economic growth forecast to 2.3 percent from a previous 3.1 percent, blaming troubles in the real estate sector.

In 2007 Spain had a public account surplus of over 2 percent of gross domestic product and grew by 3.5 percent. By 2008, the surplus has become a deficit and growth has fallen to 0.9 percent.

Third Quarter 2008

Spain economy officially enters recession as a decade-long property and credit bubble bursts.

Early 2009

Standard & Poor's is the first credit rating agency to downgrade Spain in January 2009, cutting its treasured AAA rating by one notch to AA+.

Elena Salgado takes over as economy minister after Solbes and Zapatero clash on how to stimulate the economy.

Like other developed countries, Spain adopts an economic stimulus plan. It is worth an estimated 5 percent of gross domestic product, including a 400-euro tax rebate for all taxpayers, 8 billion euros of infrastructure products and a 2,500-euro 'Baby Cheque' for each newborn.

The Bank of Spain bails out regional lender Caja Castilla-La Mancha, the country's first bank rescue.

May-June 2009

Spain creates a bank bail-out fund, known as the FROB, with firepower of up to 99 billion euros and urges weaker savings banks to merge to improve solvency.

Over the next year, the number of savings banks, which lent heavily in the property boom, will be cut to around 17 from 45.

First Quarter 2010

Spain's unemployment rate tops 20 percent for the first time in nearly 13 years with a record level of 4.6 million unemployed.

Spain's economy emerges from an 18-month recession as exports pick up.

April 2010

As talks intensify on granting Greece an economic bailout, attention turns on Spain amid worries over its massive public deficit -- 11.2 percent of GDP in 2009.

Over the second quarter of 2010, the premium investors demand to hold Spanish over German debt jumps from 67 basis points to 224 bps.

May 2010

After initially denying Spain was in trouble, Zapatero announces a slew of austerity measures worth around 1.5 percent of GDP, including wage cuts for civil servants, the end of the "Baby Cheque" and freezing pension increases.

Austerity measures passed over the following six months, including a 2 percentage point rise in Value Added Tax, are worth an estimated total of 5 percent of GDP.

The Bank of Spain seizes CajaSur, a tiny savings bank run by the Roman Catholic Church, spooking investors and helping to hasten the consolidation of the system.

June 2010

Spain's cabinet approves a labour market reform which is passed through Parliament in September, which is criticized by unions as undermining workers' rights and by businesses for being too weak.

The reform is expanded over the following year to grant further hiring-and-firing flexibility for crisis-striken companies and changes to collective wage bargaining practices.

July 2010

Private investment in savings banks is allowed for the first time, to complement restructuring and merger processes.

September 2010

Unions call a general strike to protest at the reforms and austerity measures, but the impact is limited.

December 2010

The central government forces the country's 17 autonomous regions, considered the weak link in spending cuts, to publish more details of their accounts.

Government raises the tobacco tax, slashes wind power subsidies and says it will sell stakes in its airport authority and the state lottery. Both partial privatisations are later scrapped due to bad market conditions and political pressure.

January 2011

Spain passes a pension reform that will gradually raise the retirement age to one of the highest in Europe of 67 from a previous 65.

June 2011

Zapatero announces general elections will be held in November instead of the originally planned March 2012. On the same day, the International Monetary Fund warns Spain's economy still faces "considerable risks".

September 2011

Parliament passes a constitutional amendment which forces future governments to keep a balanced budget during times of normal economic growth.

Third Quarter 2011

Economic growth slumps to zero and most economists see another recession on the horizon. The jobless rate continues to rise, hitting 21.5 percent, the highest in 15 years.