, while the existing exemptions from the general pension system provisions must be re - examined. increasing public sector efficiency. completing the national cadastre and eliminating the chronic obstacles to the efficient and speedy delivery of justice are fundamental prerequisites for a well - functioning state, as are the efficient deployment of human resources and a transparent staff appraisal framework that rewards productivity and work ethic. strengthening active labour market policies with particular emphasis on education and training, as a way to improve the job - finding chances of people on the sidelines of the labour market, such as the long - term unemployed and young people, who have borne the burden of unemployment. managing in an effective way non - performing loans ( npls ). greek banks must now adopt an active management of distressed loans, in a manner that not only eases the burden on cooperating borrowers facing temporary difficulties in servicing their debt, but also enables banks to unlock funds tied up in troubled loans that are unlikely to be repaid. the banking sector must be assisted in this effort through bis central bankers ’ speeches improvements in the legal framework that would lift restrictions on, for instance, ( pre - ) bankruptcy procedures, out - of - court settlements or, as already mentioned, a speeding up of the judicial procedure. c ) grexit is not an option after six years of severe recession and five years of fiscal adjustment, the economy has stabilized and is showing signs of improvement. if this momentum is maintained, the economy is likely to return to a steady growth path in the next few years. grexit is not an option to greece for the simple reason that the competitiveness of the greek economy has been restored over the past five years through internal devaluation and bold reforms in the labour market. hence, grexit would deliver no benefit but a lot of pain. in case of grexit, the greek economy would enter another deep recession characterized by extremely tight financing and liquidity conditions, on account of massive deposit outflows and a dramatic fall in confidence and living standards. these developments would lead to trade disruption, push unemployment further up and reduce government revenues, generating fiscal and financing gaps and concerns for the stability of the financial system. as a consequence, another round of fiscal consolidation would be required, while capital controls would be imposed and a deposit freeze could also be required. moreover, the rapid depreciation of the new currency would serve to improve greece ’ s international price competitiveness, but this would also

of the economy. had this collapse not been averted, losses would have been much greater. an exit from the euro area, as i had put in an interview, would have opened the gates of hell. bis central bankers ’ speeches 2. policy orientations to overcome the crisis against today ’ s more favourable background for the country, recovery appears to be ante portas. the year 2014 marks a halt to a deep and protracted recession. of course, the economy ’ s adjustment has not been completed. but as the first, difficult cycle seems to be coming to a positive end, it would be helpful to evaluate actions and omissions and, most importantly, draw lessons for the future. the bank ’ s positions concerning the exit from the crisis have been expressed based on a number of policy orientations, reflected in its publications and described in detail in the chronicle. these policy orientations can be summarised as follows : first, greece should make every effort to remain in the euro area and steer clear of default, which would have incalculable economic and social consequences. second, the adjustment programme and the agreements with our partners ensure the financing of the greek economy. without them, default would have been inevitable. this is why they must be implemented consistently. moreover, to a very large extent the programme ’ s terms relate to changes that should have been implemented long ago. third, in order to return to growth, securing its european perspective, the country should eliminate its fiscal imbalances, improve its competitiveness and enhance the export orientation of its economy, modernise the state, restore competitive conditions in markets and reduce the burden of public debt. greece also needs a new, outward - oriented growth model. fourth, fiscal adjustment should rely primarily on a rationalisation of expenditure. revenue must be increased by reducing tax evasion and broadening the tax base to make possible the necessary lowering of tax rates and the tax burden in the future. fifth, the historical challenge that the country is facing necessitates the greatest possible alignment of political and social forces, an understanding at the national level and the widest possible convergence of views. finally, the adjustment programmes are a necessary but not sufficient condition for exiting the crisis. a radical reorientation of the economy towards a new model requires a comprehensive national plan for growth, which will have far - reaching goals and will be implemented consistently. adhering to these policy orientations, the bank of greece has performed its institutional functions, informed