There are two key hurdles to getting a new Greek loan programme in place: Greek approval of the austerity measures to keep the deficit trajectory on track and agreement among the EU on the details of private sector involvement (PSI) in the new loan programme.

The last week has seen the Greek politics dip dramatically and recover somewhat, improving the chances of Greece crossing the first hurdle. Significant risks remain, however. We have also seen a virtual capitulation by Germany on PSI, with Angela Merkel now seeing a "Vienna Initiative" as a good foundation and a pledge to work out the details with the ECB. There remain challenges and details to work through, but by the end of the week a better sense of the hurdles being crossed was emerging.

The protagonists are grinding towards what we have been expecting: a new loan programme with a voluntary rollover agreement. Is this a lasting strategy? The voluntary roll-over does not reduce the burden of Greece's debt, but it buys time, both for Greece to show what it may be capable of but more importantly for the other peripherals to differentiate themselves with their own adjustments. Whether the strategy is durable depend on Greece's capacity to keep delivering austerity. There is a rising risk that it cannot. Another round of austerity is due by year-end in the 2012 Budget.

Eoin Treacy's view The Greek crisis continues to make headlines and investors remain anxious as to the outcome and its potential ramifications for asset markets globally. In an interview on Friday afternoon, I was asked if I believed Greece was similar to Lehman Brothers and whether Germany was the equivalent to JP Morgan in this crisis. Germany's dominant position as the economic powerhouse of Europe makes it central to any funding mechanism aimed at supporting Greece. However this crisis differs from the Lehman Brothers default in an important respect: everyone is expecting a disaster.

In 2008, one of the reasons so many asset markets crashed was because of the shock value of the default. This time around, everyone has gotten used to the idea of a potential default. Greece's problems with revenue raising, record keeping, political and bureaucratic corruption, overly generous public services etc. are well understood. The main uncertainty remains whether the Greeks accept the need for reform and are willing do what is necessary to correct past abuses.

If we expect a disaster it would be schizophrenic if we did not adjust our positions to reflect such an event. Those who had concentrated exposure to Greek debt have had ample opportunity to hedge. The surge in CDS spreads reflects both demand for insurance against default and speculation on how likely a default is. The European Commission has been playing for time in an effort to allow European banks the chance to get their balance sheets in order. The ECB remains likely to offer unlimited cash at the discount window in the event of a default just as it did in 2008 and subsequently.

This crisis will not be solved in the short term. Potential remains for the rise of a populist party that makes refusal to accept harsh fiscal austerity a central theme of its election platform. Some form of Greek restructuring is most likely inevitable at this stage but an outright default and ejection from the Euro remains an extreme view with no apparent support within the Eurozone.