After a summer lull, the euro zone faces two months that will go a long way to dictate whether its debt crisis, now into a third year, will spiral out of control or finally be contained.
Following is a breakdown of the key events and dates that will shape the currency bloc's future:
SEPTEMBER
- The troika of EU/IMF/ECB inspectors returns to Athens early in September and will almost inevitably conclude that Greece cannot meet debt-cutting targets set in its bailout agreement. That verdict, which may not be delivered until October, will leave the euro zone with a stark choice: cut Greece some slack or cut it loose. The Greek government is seeking an extra two years to make the savings demanded of it. Germany is not so sure.
- European Commission President Jose Manuel Barroso has said that early in the month he will detail plans for a euro zone banking union starting with cross-border supervision. Once that is established, the currency bloc's rescue fund will be allowed to recapitalise banks directly, offering a new route for struggling countries without them having to succumb to a full-blown sovereign bailout.
SEPT. 6
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- The European Central Bank holds its monthly meeting. Having signalled that he will start a programme of government bond-buying to lower Spanish and Italian borrowing costs, ECB President Mario Draghi will be expected to detail just how the central bank would go about it if called upon. He faces stiff internal opposition, led by Germany's Bundesbank. If he has not got broad backing for a plan and fails to flesh it out, stock markets, which have been climbing in the belief that ECB action is coming, could fall sharply.
- German Chancellor Angela Merkel meets Spanish Prime Minister Mariano Rajoy in Madrid, and Spain will hold its first bond auction since early August.
SEPT. 9/10
World's central bankers meet at the Bank for International Settlements in Basel, Switzerland.
SEPT. 12
- Germany's Constitutional Court to rule on complaints made to it about the euro zone's ESM rescue fund. The process has delayed the firewall from coming into being because Berlin cannot ratify it until the court has spoken. It is unlikely to block the fund's inception but might well call for greater political supervision of its activities. This is crucial because Draghi has stated that the ECB would only intervene in the bond market if a country has first sought similar help from the rescue fund.
- On the same day, Dutch elections are held. With polls charting growing disaffection with austerity and the hard-left Socialist party showing strongly, it is possible a coalition of parties will be voted in that robs Germany of one of its key allies and rejects any further bailouts of euro zone countries.
SEPT. 13
Italian government bond auction. Also, G20 finance ministers and central bank governors meet in Mexico for two days.
SEPT. 14/15
Informal Ecofin meeting of European Union finance ministers to be held in Cyprus. After Rajoy indicated that Spain might seek help from the euro zone's rescue funds, officials have said this meeting could be the venue to thrash out the details.
MID-SEPTEMBER
Spain to unveil audit of its banking sector, which will determine how much it will take of a 100 billion euro bank bailout on offer, and how much each bank needs. EU officials have suggested that some banks might need to be wound down.
SEPT. 20
Spanish government bond auction.
SEPT. 27
Italian government bond auction.
BY END SEPT.
Cyprus's central bank governor has said a bailout accord could be brokered with international lenders by the end of September to help a banking system battered by its exposure to Greece.
OCT. 4
Spanish government bond auction.
OCT. 8
Eurogroup meeting of euro zone finance ministers in Luxembourg. Likely to be the forum at which the troika's report on Greece and any plans to loosen bailout terms will be discussed.
OCT. 11
Italian government bond auction.
OCT. 14
Annual meeting of International Monetary Fund and World Bank begins in Tokyo.
OCT. 18
Spanish government bond auction.
OCT. 18/19
Summit of EU heads of state and government in Brussels that could cement the bloc's approach to Greece, Spain and Italy.
OCT. 29-31
Three days in which 20 billion euros of Spanish debt matures and will need to be refinanced - a daunting task for Madrid unless its borrowing costs have fallen substantially.