, the progress with the recapitalisation of greek banks. in 2015, the stock of non - performing loans increased. non - performing exposures as a percentage of total exposures ( npe ratio ) rose to 43. 6 % at end - september 2015 ( up from 39. 9 % in december 2014 ). this deterioration was visible and similar in size ( roughly 4 percentage points ) across all loan categories. in particular, the npe ratio reached 55. 4 % for consumer exposures, 43. 3 % for business exposures and 39. 8 % for housing exposures. this can in part be attributed to the postponement of the implementation of the code of conduct on the management of npls and to the less active loan portfolio management on the part of banks, which seemed to focus mostly on short - term solutions. however, from the third quarter onwards, especially after the recapitalisation, banks appeared to step up their efforts towards more active npl management. bis central bankers ’ speeches the completion of the first review will enhance the prospect of recovery contrary to what was the case in 2015, 2016 could mark a new beginning leading greece out of the crisis and onto a path of sustainable growth. as mentioned previously, however, there are a number of major challenges, arising not only from unpredictable developments in the international environment but also, more importantly, from potential risks to the domestic macroeconomy, such as delays in the completion of the first review of the new stabilisation programme or failure to implement the programme ’ s actions. real gdp growth is expected to be negative, at least during the first half of 2016, largely reflecting a carry - over effect from 2015. however, as already mentioned, the objective conditions are in place for greece to exit recession and come closer to positive growth from the second half of this year. this is also conditional on a number of steps that will help to avert risks and strengthen the prospect of recovery, which is feasible. the first step, and the one with the most crucial bearing on future developments, is the successful completion of the first review of the programme, currently in progress. this will require, among other things, the completion of the social security reform and the alignment of farmer income taxation. these are not just prior actions for the review of the programme. they are necessary to ensure the sustainability of the social security system and of public debt and to restore social and tax equity both across generations and across taxpayer groups. a positive

targeting social spending to remove the bias against the new generation and improving labour mobility from overstaffed to understaffed parts of the public sector. 5. encouraging business investment and protecting private investors greece has been plagued by serious investment inertia. between 2007 and 2014, total investment expenditure as a percentage of gdp fell by half. underlying this disinvestment are anaemic demand, political and economic uncertainty, as well as financing constraints. the prompt rebound of business investment expenditure is key to sustainable growth. the restoration of economic and political stability that would strengthen investor confidence and encourage business investment plans, the rapid shift of the domestic production model from non - tradable to tradable goods and services and the easing of financing constraints are instrumental in stimulating business investment expenditure. a decisive contribution should also come from actions such as the enactment of a new development law with clear growth incentives, but especially initiatives from the financial system to address non - performing loans in the context of the new institutional framework, which also enables creditors to cooperate in restructuring productive businesses. furthermore, the greek state must help restore investor confidence and protect private investors by ensuring a stable, businessfriendly economic environment. this can be achieved through the establishment of a clearcut, simple and stable tax and legal regime fostering healthy entrepreneurship, and through initiatives to settle long - pending, and harmful for the country ’ s investment appeal, disputes with major international investors. 6. increasing exports the competitiveness gains achieved by the greek economy at considerable social cost do not seem to have been fully exploited. these gains, together with improved labour market flexibility, are strong incentives for investment initiatives. despite the recouping of losses in international competitiveness, mainly in unit labour cost terms, exports have not yet recorded the anticipated upward dynamics. this can in part be explained by the lack of financing, the bis central bankers ’ speeches comparatively higher cost of long - term borrowing and the increased tax burden which weighs on the economy ’ s overall competitiveness. in part, however, it is also due to a number of inherent structural weaknesses that hamper the penetration of greek products in international markets and relate to non - cost aspects such as product quality, protected designation of origin and branding, red tape, etc. 7. combatting high unemployment the observed gradual decline in unemployment and the continued recovery of the employment rate have been supported by the active employment policies implemented through programmes and actions using resources from the national strategic reference framework ( 2014 – 2020 ). in order to