These institutional reforms would be crucial for the EMU to face two of the most fundamental objectives to consolidate its future: increase its growth potential and restore a path of real economic convergence among its member countries. While at present the recovery is on track, looking ahead the growth potential of euro area economies needs to be strengthened.
Private sector credit extension grew by 12.6 percent in FY 2018/19 compared to 6.8 percent in FY 2017/18 and nonperforming loans as a percentage of total loans have declined from a peak of 10.5 percent in December 2016 to about 3.8 percent in March 2019.