fifth, the non - performing loans ( npl ) problem proved more difficult that initially anticipated. it was mainly the outcome of economic contraction, but it was also propagated by legislative changes such as the blanket moratorium on auctions and the abuse of protection law 3869 / 2010. several other legal and judicial impediments exacerbated the npl problem 4. a more forceful reaction during the first years of the crisis by implementing the required legislative changes much earlier and introducing a centralised asset management framework for npes as other member states had done could have reduced the problem we are facing today. the bank of greece believes that there is still ample scope for introducing such a systemic solution now and has recently presented a scheme to deal with the high volume of npes, in addition to banks ’ endogenous efforts, in order to achieve a rapid convergence of the greek npe ratios to the european average. sixth, certain reforms fell behind the agreed time schedule due to several factors, including : insufficient ownership of the necessary reforms ; populist rhetoric, rivalry and failure to reach an understanding among political parties ; and the various – small and large – vested interests that resist reform. seventh, at the same time, political economy deliberations in the euro area have played their part in delaying the recovery of the greek economy. the eurogroup decision of november 2012 to grant further debt relief was put off for several years and was actually implemented only in june 2018. this was partly due to delays and to mixed signals occasionally received from greek political parties on the commitment to reform. however, and rather more importantly, it also reflects forthcoming elections and populist voices in a number of euro area member states. overall, this development undermined the growth prospects of the greek economy and extended the duration of the crisis. eighth, at the start of the greek sovereign debt crisis in 2010 the euro area authorities objected to any type of intervention to contain the rapidly rising greek government debt. instead, emphasis 4 / 8 bis central bankers'speeches was placed on drastically correcting fiscal imbalances. hence, on account of all this, the much larger than initially anticipated recession over the programme years and the rather unorthodox negotiations of the first half of 2015 that led to the third economic adjustment programme, the greek debt rose to 176. 1 % of gdp at the end of 2017 from 126. 7 % of gdp in 2009, thus requiring further debt relief, which was actually provided in june 2018

of the crisis. • labour cost competitiveness has been fully restored and price competitiveness has recorded substantial gains since 2009. this outcome was mainly driven by labour market reforms, which liberalised employment protection legislation and facilitated a more flexible and decentralised wage bargaining system. • a bold programme of structural reforms and privatisations has also been implemented. reforms cover various areas, such as the pension system, the health system, goods and services markets, the business environment, the tax system, the budgetary framework and public sector transparency. as a consequence of the above, openness has improved substantially and the economy has started to rebalance towards tradable, export - oriented sectors. the share of total exports in gdp increased from 19. 0 % in 2009 to 34. 2 % in 2017. exports of goods and services excluding the 1 / 8 bis central bankers'speeches shipping sector have increased by 54 % in real terms since their trough in 2009, outperforming euro area exports as a whole. the share of tradable goods and services in the economy has increased by 10 % relative to non - tradables in terms of real gross value added since 2010. on account of improving economic conditions and the reforms implemented, the unemployment rate, although still quite elevated, declined to 19. 0 % in the second quarter of 2018from 27. 8 % at the end of 2013. the banking system has been restructured and recapitalised and its corporate governance has been enhanced. following three rounds of recapitalisation, greek banks have capital ratios above the euro area average and maintain buffers sufficient to absorb additional credit losses, as the recently completed pan - european stress test indicated. they have also markedly improved their liquidity position, regaining access to the interbank market and issuing covered bonds ; as a consequence, they have reduced their reliance on central bank funding. however, nonperforming exposures ( npes ), one of the most important legacies of the crisis, remain banks ’ most significant challenge. a number of important reforms have been implemented, aiming to provide banks with a variety of tools to meet this challenge. these reforms include, among other things, the establishment of a secondary market for non - performing loans ( npls ) and the subsequent licensing of fourteen credit servicing firms, the operation of an electronic platform for out - of - court settlement, and electronic auctions of real estate collateral. these efforts have started to bear fruit : according to end - september