It should be taken into account that most of the reforms to be implemented entail fewer shortterm costs relative to those implemented earlier on in the programme (i.e. labour and pension reforms). However, taking into account the synergies with the already implemented reforms, upcoming reforms are expected to yield immediate net gains in terms of faster economic recovery.
Moreover, flexible economic structures and better institutions not only lead to higher long-term growth but also reduce the probability of severe recessions. iii. Tackle the NPL problem In the banking sector, the large volume of non-performing loans and the problem of the strategic defaulters prevent the banking system from financing economic growth.