However, all upgraded buildings except capitals are downgraded to the lowest tier and all offensive armies and half of the empire's military ships are disbanded.

If a shortage situation progresses completely, the empire defaults, refunding a large amount of resources based on how many decades have passed since game start and ending all current shortage situations. All shortage situations have a Maintain Current Expenditures approach with no effects and one or two other approaches which attempt to alleviate the deficit by reducing expenses or increasing output of the resource. Unlike most situations, the aim is to prevent the situation from making progress to avoid increasing empire penalties. Shortage situations progress as long as the empire has negative income and recede once a positive income is reached, or the stored stockpile is raised above zero some other way. Shortages are situations that start if an empire's stored stockpile for a resource drops to 0 with negative income. Please help with verifying or updating this section. The situation, stages, or approaches can also apply modifiers to the empire experiencing the situation. Situations may have a target – usually a planet or empire – and the situation, stages, or approaches can apply modifiers to this target. The end of a situation can be good, bad, neutral, or even nothing – depending on the situation and which end is reached. Situations automatically end when the progress bar reaches 100 ('complete') or goes below 0 ('fail') it is also possible for a situation to end due to an event, project, or other reason.

Occasionally, an event can lock a situation, preventing its progress from changing, usually to force the player to make a choice or prevent an undesired possible interaction of effects from the situation stage changing. Most situations have a base amount of monthly progress as well as one or more approaches, which can affect the monthly progress or apply other effects. In addition to events triggered by entering a stage, situations may also have random monthly events. The progress bar is split into one or more stages, which often represent the increasing effects of the situation and may also trigger events when first entered. All situations have a progress bar, which typically goes from 0 to 100 by default situations start at 0, but some situations start at other points along the progress bar. Situations are narrative or mechanical events that develop gradually rather than occurring immediately upon triggering.

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