delimitation of state intervention in private initiative. the state ’ s role should be to regulate the institutional framework governing the private economy and provide oversight of performance and monitoring capacity rather than 6 / 7 bis central bankers'speeches acting as an entrepreneur - producer. furthermore, the use of public - private partnerships in a wide range of administrative procedures and in the delivery of public services would shift costs from taxpayers onto users, while at the same time enabling care to be taken to support the weaker groups of the population. second, speeding up the privatisation programme and the development of public property. with government intervention under the new productive model being limited to the role of overseerregulator, privatisations will increase public revenue, while also strengthening competition to the benefit of the consumer. third, changes in the tax system with a view to creating a clear and stable tax regime with lower tax rates for households and businesses and to broadening the tax base. fourth, expanding the use of electronic transactions to all types of economic activity, so as to effectively reduce the informal economy and increase public revenue with a fairer distribution of the tax burden. the success of this endeavour will crucially hinge upon citizens ’ familiarisation with digital technology applications, as well as upon building a taxpaying culture. fifth, emphasis on the “ knowledge triangle ” ( education - research - innovation ), with evaluation of higher education and linking research to funding and to the production process. this is so because linking higher education with the production process promotes innovation and the country ’ s competitive advantages. sixth, and most important, strengthening the operational independence of key institutions and the rule of law. for this to become possible, society and the political forces must understand that strong and sound inclusive institutions, which do not serve the interests of specific groups at the expense of others, promote the welfare of society as a whole. for the restart of the economy to be a success, the status of institutions – which is synonymous of confidence – needs to be elevated in future. weak and closed institutions generate uncertainty and disorientation, whereas strong, open and socially accepted institutions are necessary for a return to normality. * * * today, the greek economy is close to an exit from the crisis and a return to normality. the economic fundamentals, as recorded, so far, in the evolution of economic indicators, are encouraging. however, making the most of these favourable conditions calls for a comprehensive plan for the future, within a climate of social

consequences connected to trade links in the event of a sharp slowdown of the british economy : a 10 per cent fall in uk imports, close to the upper limit of the leading analysts ’ evaluations, would shave around one quarter of a percentage point off italy ’ s gdp in the three - year period 2016 – 18. higher risks to the medium - term outlook for the italian economy and the euro area could stem from the spread of unfavourable expectations which, as our experience of the crisis years has taught us, can have non - linear and difficult - to - predict effects. a tightening of conditions in the financial markets and credit supply, triggered by investors ’ flight to safety and by an exacerbation of strains on bank securities, coupled with a general decline in business confidence, would harm investment and growth. what matters most is the ability to adopt measures, at the european and national level, capable of containing the tensions on financial markets, strengthening the banking system and shoring up confidence. the monetary policy toolbox is well stocked but all the other policies must play their part. we must take care that supervision does not itself become a source of tensions. recognizing the emergence of risks to financial stability, in the last few bis central bankers ’ speeches days the bank of england has made use of the flexibility inherent in the rules to reduce the countercyclical capital requirements for banks. italian banks non - performing exposures and capital adequacy the fall in italian banks ’ share prices reflected, as in other euro - area countries, fears that slower growth could dent banks ’ profitability and impair their capital. it was, however, compounded by the large stock of non - performing loans ( npls ), a legacy of the recession, and by concerns that current market conditions could make it harder to sell these exposures or raise capital. italian banks ’ npl problem is serious but manageable ; it must be clearly defined and tackled. this is being done, taking account of the need to deliver both swift and cost effective solutions. the reduction in the stock of npls recorded since last autumn is an encouraging sign. the loss of almost 10 percentage points of gdp and about 25 per cent of industrial output during the crisis inevitably had a severe impact on italian banks ’ balance sheets and on the quality of their loans. without the double - dip recession, the gross stock of bad loans, considering only loans to non - financial firms, which exceeded €140 billion at the end of