##equacy ratios stand at satisfactory levels, and their loan - loss provisions are sufficient to address potential credit risks. however, the banking system still faces a very high stock of non - performing loans ( npls ). a number of important reforms have been implemented in this regard, aiming to provide banks with an array of tools to tackle this challenge, including a strengthening of the supervisory framework by setting operational targets for npl reduction, the creation of a secondary npl market and the removal of various legal, judicial and administrative barriers to the management of npls ( see bank of greece, 2018 ). these actions have started to bear fruit, as shown by the continued reduction of the npl stock in line with the targets set. non - performing loans amounted to eur 81. 8 billion at the end of december 2018, down by eur 25. 4 billion from their peak in march 2016. however, the npl ratio remained high, at 45. 4 % in december 2018. on account of the reforms implemented since the beginning of the crisis and the effort of enterprises to make up for declining domestic demand by exporting to new markets, openness has improved substantially, and the economy has started to rebalance towards tradable, exportoriented sectors. • the share of total exports in gdp increased from 19. 0 % in 2009 to 37. 7 % in 2018. exports of goods and services, excluding the shipping sector, have increased in real terms by 53 % since their trough in 2009, outperforming euro area exports as a whole. • the volume of tradable goods and services in the economy increased cumulatively between 2010 and 2017 by 14 % relative to non - tradables in terms of gross value added. the rebalancing of the economy towards the internationally tradable sectors was facilitated by increases in the relative prices and net profit margins of tradable goods and services. it is worth underlining the fact that, in 2017, the estimated net profit margins of tradables were three times higher than those of non - tradables. thanks to improved economic conditions and to the reforms implemented, the unemployment rate, though still high, fell to 18. 7 % in the fourth quarter of 2018, from 27. 8 % at the end of 2013. 3. the greek economy continues to face major challenges despite the progress made so far, the greek economy continues to face major challenges and crisis - related legacies. the european commission, in its

in order to restore intra - european financial flows, improve stability in the banking sector and promote private risk - sharing in the eu. third, the esm could be transformed into a european monetary fund to act as a lender of last 5 / 8 bis central bankers'speeches resort for member states, when they cannot access financial markets on sustainable terms. fourth, the emu should also enhance public sector risk - sharing by creating a centralised fiscal stabilisation tool ( based on investment and / or unemployment insurance ) and by allowing for the issuance of european “ safe ” bonds. fifth, it is crucial to improve the accountability of european institutions to the european parliament, for european citizens to have their say ( through their european mps ) on euro area developments as a way of combatting populist and anti - european voices. 6. conclusions despite some missteps and delays and political resistance to the implementation of the required reforms, greece has made notable progress since the start of the crisis in 2010. the implementation of a bold economic adjustment programme has eliminated several macroeconomic imbalances. moreover, the economy is now recovering and has started to rebalance towards the tradable, export - oriented sectors. nevertheless, significant challenges and crisis - related legacies remain ( e. g. a high public debt ratio, a high npl ratio, and high long - term unemployment ), while the brain drain and underinvestment weigh on the long - term growth potential. to address these challenges, emphasis must now be placed on implementing the reforms described above. these reforms would facilitate the sustainable return of the greek state to the international government bond markets and the rebalancing of the economy towards a knowledge - based and export - led growth model. finally, it is high time to take bold steps towards the completion of emu, promoting greater political solidarity and fostering private and public risk - sharing. the next crisis should not find us unprepared and we should not rely solely on the ecb ’ s monetary policy to deal with it. ( 1 ) for example, according to alesina ( 2015a, b ), revenue - based consolidations are more harmful for output dynamics than expenditure - based consolidations. the more benign effect of the latter type of consolidations works through their positive impact on business confidence and private investment. moreover, kasselaki and tagkalakis ( 2016 ), using greek data, have found that a government spending - based fiscal consolidation improves financial markets