In this regard the authorities launched a consultation process with the stakeholders involved, to amend Banking Rule 9 which involves measures addressing credit risks arising from the assessment of the quality of asset portfolios of credit institutions. In a nutshell, the proposal aims to establish a concrete plan with those banks with NPLs higher than 6% to reduce such NPLs below that level over a period of 5 years, where failure to adhere to this plan will require the institution to shore up its resilience through the accumulation of an additional capital reserve. Meanwhile, on a European level, the European authorities are pushing for the establishment of a European Deposit Insurance Scheme (EDIS), which is a necessary ingredient to complete the architecture of the Banking Union project. This is because a common deposit insurance fund inspires the same level of confidence to depositors throughout the entire Banking Union, creating a consistent and common framework for supervision, resolution and depositor protection. Moreover, this joint safety net within the Banking Union is expected to prevent the creation of competitive distortions, thus facilitating cross-border banking and hence strengthen financial integration. However, in this regard, there is still some way to go for agreement among all Member States, as risk reduction measures, particularly through asset quality reviews of the less significant institutions and addressing the banking-sovereign debt loop, need to be also implemented. Malta is committed to taking the EDIS file forward during its presidency.
Following an exceptional increase of 6.2% last year, real GDP expanded at a more than respectable average annual rate of just over 4% during the first half of 2016. The expansion in output is being driven by domestic demand, especially by strong growth in private consumption and investment. Exports of services are also performing well, indeed significantly better than the export of goods. Growth is being driven by private market services, encompassing a mix of traditional and new sectors, including tourism and distribution, aviation and professional services. The  utilities, which were formerly loss-making, have now returned to profit, reflecting the use of cheaper energy sources and efficiency gains. Manufacturing is holding its own, with pockets of success and others that continue to face strong competitive pressures. At the same time, following vigorous growth last year, growth in value-added in construction has eased. Growth in output depends upon and feeds into a dynamic labour market. According to administrative records, which are available up to April 2016, annual employment growth consistently exceeded 4% in recent quarters. The Labour Force Survey paints a similar picture, with employment gains averaging around 3% during the first half of the year. More recently, registered unemployment has continued to fall to record low levels over the summer. Notwithstanding such a dynamic economic performance, price pressures remain contained, with inflation fluctuating in a narrow range around 1% since the beginning of the year.