EU foundations remain strong

Greece won’t exit the monetary union this year, in our judgment. The country’s near-term financing gap is small relative to the size of the financial aid it has received in the past, and the will to keep the union together remains strong.

We expect Greece and its creditors to find a mutually acceptable list of reforms to unlock the funds needed to keep the beleaguered country afloat.

Experience suggests that agreement could be reached at the last possible moment — just before a repayment must be made to the International Monetary Fund. Still, as the timeline grows tighter, the risk is rising that European leaders might run out of patience and trigger a messy exit from the euro area.