Despite some progress in the Greek programme negotiations, large disagreements in key areas persist, and Greece’s liquidity situation is deteriorating further. It is also unclear whether another Greek attempt for a ‘political’ solution at the EU leader summit (21-22 May) will be successful. We think that the policy commitments needed for a programme agreement may only be achieved after some form of government crisis that serves as the catalyst for political change (see Scenarios for Greece, 27 April 2015). Although we still believe that an agreement will ultimately be reached, the dynamics of the necessary process are highly uncertain. Without an agreement, Greece could descend into what would effectively be an ‘exit’ from the euro area, where defaults and capital controls become a permanent feature