##it effect ( the hit to the european economy is a real gdp decrease of around 0. 5 % over the next three years, but this is a very early forecast ). 3. last but not least, political risks have increased, posing a challenge to fiscal and structural reform implementation. rising political uncertainty ( especially in spain, portugal, greece, italy and france ) and increasing support for populist political parties which seem to be less reform - oriented and with eurosceptic credentials contribute to the downside risks to debt sustainability in the euro area. of course, in the aftermath of the british referendum the biggest political risk to the whole of europe is brexit. brexit represents a shock to the institutions and norms that underpin markets. thus, brexit is different from the euro break - up fears of 2012, the global financial crisis of 2008 or the bursting of the high - tech bubble of 2001. it is not financial contagion, as in 1998, or this february. instead, it represents a contagious political development. no matter whether we have a full - blown or a light brexit, the political risk for the rest of the continent is that the referendums will mushroom across europe in a tug - ofwar between populist forces and the political establishment and elites. this risk is particularly heightened for countries with strong anti - european sentiment such as hungary, the netherlands, denmark, even france. there is an old saying in brussels that europe ’ s leaders are known to have a tried - and - tested method for coming up with policy fixes when forced to cope with emergency situations. postbrexit europe has the potential to become an emergency in the not - too - distant future. i only hope that this time is not different. times will tell. bis central bankers ’ speeches

to reduce the stock of their npes, and the rise in a number of leading indicators of economic activity and confidence. on 20 september the ela ceiling for greek banks stood at €33. 6 billion, compared with €50. 7 billion at end - 2016 and €90 billion in june 2015. deposits by the non - financial private sector increased by €1. 4 billion to €119. 4 billion in august 2017. in particular, from end - may 2016, when the first review of the programme was completed, until august 2017, deposits by non - financial corporations and households increased by 5. 3 % or €7. 3 billion, while total deposits gained about €11 billion. the economic sentiment indicator rose to 100. 6 in september, from 99. 0 in august, also amid strong consumer confidence, which recorded a two - year peak. the manufacturing pmi suggests expansion for the third month in a row, and came to 52. 2 in august, from 50. 5 in july, reaching its highest level since august 2008. in the same vein, since the beginning of this year there has been progress with the issue of banks ’ problem loans. more specifically, on the basis of june 2017 data, the stock of nonperforming exposures ( npes ), including off - balance sheet items, decreased by 3. 2 %, compared with end - december 2016, coming to €102. 9 billion or 44. 9 % of total exposures. the npe reduction was mainly driven by extensive loan write - offs and to a much lesser extent by collections, liquidations and sales of loans. loan write - offs amounted to €3. 3 billion in the first half of 2017. lastly, significant headway has also been achieved in the area of reforms despite several delays. according to a recent report by the lisbon council ( europlus monitor, september 2017 update ), greece continues to rank first in the eu - 28 in terms of the adjustment progress indicator. greece ’ s high score in this area is mainly attributable to its adjustment efforts in 2010 – 2013, but also to the fact that since mid - 2015 there has been a reversal in the negative course that had started in late 2014 and peaked in summer 2015 amid heightened uncertainty and strong confrontation with the institutions, thereby weakening the country ’ s position. 3. positive prospects for 2017 – 2019 in the light of the data i mentioned briefly, it is now safe to predict that economic activity