Nevertheless, restoring the capital position of Greek banks represented only the first step of a more comprehensive reform plan to restore confidence in Greek banks. Over the past months the focus has been on the resolution of non-performing loans (NPLs) and on improving bank governance.
The simulation results showed that by 2020 a comprehensive package of policy measures, encompassing both product market and labour market reforms, could lead to a 2.2% increase in GDP, compared to the base line scenario. Employment levels could rise by about 1.5% over the same horizon. Such an outcome would also greatly support the ongoing fiscal consolidation process.