in its latest report on monetary policy released in march, the bank of greece estimated that gdp would decline by around 2 % in the current year. given the present circumstances, this projection is surrounded by high uncertainty and is subject to high upside risks. 5. the recession spread across all sectors of activity in 2009, negatively impacted employment, and caused an increase in the rate of unemployment. total employment declined by 1. 1 %, the number of employees fell by 1. 6 % and the unemployment rate climbed to 9. 5 %. a further drop in employment is projected for 2010, while the rate of unemployment will come close to 11 %. 6. the adverse developments, mainly in greece ’ s fiscal aggregates, together with the blows to market confidence, ultimately took their toll on the banking system. whereas in many other countries the crisis first broke out in the financial system and from there spread to the real economy, in greece things worked the other way round. the greek banking system only began facing liquidity constraints when the severe fiscal imbalances led to successive downgradings of the country ’ s credit rating – and consequently the credit ratings of greek banks, thereby restricting their access to international capital markets. meanwhile, the slowdown in deposit growth, due inter alia to the recession, affected the domestic supply of credit. it is worth noting that, in spite of these problems, the annual rate of credit expansion to the private sector remained positive throughout 2009, contrary to the situation in the euro area as a whole, where there have also been periods of negative credit growth rates. the greek banking system showed remarkable resilience during the global crisis ; the provision of ample liquidity from the eurosystem at low cost was one of the reasons for this. for the banking sector, retaining this resilience in the future, especially in view of the gradual phasing - out of the extraordinary measures for the provision of liquidity, will be conditional upon dealing with the fiscal crisis, which affects its functioning, and restoring market confidence in the future of the economy. even after this happens, however, the new conditions that will emerge will be quite different from the ones in which the banks used to operate. the lessons drawn so far from the crisis will lead to a revision of the supervisory framework, now under examination by the basel committee. greek banks must therefore adapt to the new situation with insight, bearing these impending changes in mind. at the current stage it is imperative that they : • maintain size

co - ordinator in the regulation and supervision field, augurs well that if a decision is taken on this issue the role of the ecb in this area should be further enhanced. conclusions in conclusion and given that the severe stress in global financial markets and its impact on the greek economy will probably last for some time yet, we can argue that the measures taken by the greek state represent a necessary and proportionate package to enhance, first, financial stability and hence ensure the deposits and the savings of the population ( which is one of the key obligations of supervisory authorities ) and, second, confidence in the greek economy, provided that during the initial implementation phase, all parties involved will perform their tasks in the best possible manner. moreover, there are a number of positive factors : no greek bank has faced any crisis ; in 2008 their high profit rates will be sufficient to help banks to further increase their capital base. of course, many questions remain on the adequacy of the measures at the euro area level and on the volume and pattern both of the state financial support and fiscal stimulus. examples of repetitive packages introduced in some countries and calls by non - euro area countries to be assisted may lead – in the end – to bigger packages than presently envisaged. as far as it concerns the exit strategy, this is still lacking, but first things first.