to their risks. a common european deposit insurance scheme would significantly increase the stability of the euro area banking system compared with the current situation in which national funds are responsible for the deposit guarantee. the goal should be that confidence in the secured bank deposits is equally strong throughout the euro area. reducing risks in the euro area banking system the implementation of a common european deposit insurance scheme can be enhanced by 3 / 9 bis central bankers'speeches reducing risks in the euro area banking system. overall in the euro area, significant progress has already been made, as the level of non - performing legacy assets has decreased. this development is clearly visible in figure 4. figure 4 : npls are decreasing in the euro area4 ( ppt slide ) as we know, the position of countries varies a lot concerning the share of non - performing loans ( npls ) of the total stock of loans across the euro area, as does the speed of reduction in their amount ( see figure 5 ). spain did utilize well and effectively its esm - funded financial - sector repair programme, which started in summer 2012, and has moved further towards solving the problem by reducing the share of npls to around 5 % by the end of last year, i. e. close to the euro area average. italy took action later and has managed to reduce the amount of npls in its banks by about 30 % in two years, and the share of npls in italy in 2016 – 17 came down from 16 % to around 11 %. hence, while progress has been made, there is still plenty of work to be done to maintain the positive trend in npl reduction. figure 5 : the reduction of non - performing loans by country ( ppt slide ) in any case, to mitigate risks in the banking system, it is important to reduce the amount of npls further. the position of the bank of finland is that the resolving of legacy problems should be separated from the management of future non - performing loans. the ssm has already published a proposal on provisioning methodologies for new npls that will increase banks ’ loan loss provisions and resilience. to ensure the most effective reduction of npls, legacy problems should be handled with a combination of bail - in and recapitalization by national funds, in line with the state aid guidelines ( 2013 ) set out by the commission. transitional provisions should provide an opportunity for this by facilitating the write - down of non - performing exposures to a level that enables market

endeavour to strengthen liberal democracy and international institutions, which is at the heart of europe ’ s peace project and part of her dna. in other words, our efforts to reinforce emu are part of a broader endeavour to strengthen europe, so that it will be better in serving its citizens, by enabling their entrepreneurship, innovation, prosperity and security. but to succeed, we must put our own house in order first. the crisis revealed serious weaknesses in the institutional structure of emu. it revealed especially how financial stability concerns – in particular the stability of the banking system and of the government bond markets – had been neglected when emu was created. financial stability was the ‘ neglected stepchild ’ of maastricht, it has been said. the crisis finally galvanized the union to action. there was an important, even vital, wave of institutional reforms which came about during the peak of the euro crisis. we should now seize the opportunity provided by the current favourable economic situation and complete the most 1 / 9 bis central bankers'speeches significant remaining reforms, in order to make emu more resilient before the next recession arrives. good times should indeed be used to reform. so where do we stand today? the eurozone economy has now been growing for over five years. growth is broadly based across sectors and countries. the ecb's latest forecast from march foresees growth to be 2. 4 % this year and 1. 9 % in 2019. figure 1. euro area grown for 5 consecutive years ( ppt slide ) the recent positive trend can be seen in this graph, showing gdp in the euro area, italy and germany. euro area gdp reached its pre - crisis level in 2015. however, this includes somewhat different country - specific paths. german output reached its pre - crisis level already in 2010. while italian output is still below its pre - crisis level, it has now returned to a growth path. figure 2. euro area unemployment rates ( ppt slide ) positive developments in output and growth have also suggested encouraging trends in the labour markets. euro area aggregate unemployment dropped to 8. 5 % in march 2018. the unemployment rate is trending down in almost all member states. the german unemployment rate has dropped to a record low 3. 5 %, whereas unemployment remains persistently high in the countries that suffered most from the financial crisis ; here in italy it is 11. 0 %. overall, there was a strong expansion in the euro area economy in 2017. however,