The average NPL ratio for euro area banks at just above 2% in 2007, reached 8% in 1/7  BIS central bankers' speeches  2013 and stands now at 6%. For the six “high-NPL” national banking sectors, the averages went however from 5% in 2007 to 23% last year.1 Elevated loan impairment costs remain an important driver of low profitability in “high-NPL” countries.
Unemployment is rising, but with considerable variation between the member states. The Southern European countries are burdened by high unemployment, including high youth and long-term unemployment. In fact, the situation is so bad that it has triggered social and political unrest. That gives cause for concern.