Last week's issue of this paper included two authoritative texts about the Maltese economy which otherwise would not have been published anywhere else in Malta, thus leaving the Maltese reader without very important texts regarding the state of the economy.

One was a statement by rating agency Fitch and the other was the conclusion of an Article IV consultation by the IMF board with regards to Malta.

Concurrently, there was a debate in Parliament regarding the economy and financial matters, although there has not been so far in the Maltese House of Representatives a debate on the Greek bailout as there has been, for instance, in the German Bundestag.

The parliamentary debate included many appeals, coming from both sides of the House, that banks should lower their interest rates and/or be more proactive to help businesses.

The two texts we published also speak about the banks in Malta but from a very different perspective.

The IMF Executive Board said: "Directors observed that the large financial sector remains stable, and welcomed the progress in strengthening the regulatory and supervisory frameworks. They considered that reducing the relatively high level of nonperforming loans would further boost the resilience of Maltese banks. It will also be important to remain vigilant to the exposure of banks to the real estate sector. Directors encouraged the authorities to implement the action plans resulting from the ECB's Comprehensive Assessment of the largest banks, and to apply the same standards across the rest of the banking sector. They saw a need to strengthen the contingency framework in line with reforms at the EU level, by boosting the resources of the deposit compensation scheme, establishing a resolution fund, and introducing a bail-in requirement."

In this regard, what Fitch had to say was more direct. "The three Maltese banks directly subjected to the ECB's Comprehensive Assessment passed it unscathed. No capital shortfalls under the baseline and adverse scenario of the stress tests were found. The adjustments required as a result of the Asset Quality Review were limited.

"The core domestic banks have a loan/deposit ratio of only around 66% and have not been drawing significantly on ECB liquidity facilities. Their Tier 1 capital ratio stood at 11.08% in June 2014, well above the regulatory minimum threshold (8%). The ratio for the whole banking sector (including non-core domestic and international banks) was 25.8% in June 2014. The government has not had to provide capital or liquidity.

"Loan portfolios are concentrated in mortgages, construction and real estate. Non-performing loans (NPLs) to total loans stood at 9.5% in June 2014, up from 9.1% in 2013. This was due mainly to the corporate segment where the NPL ratio rose to 17% from 15.9%.

"The bulk (45% of total NPLs) was concentrated in the construction sector. A sharp housing market correction combined with problems for real estate developers are the main domestic risks to financial stability, but Fitch considers this scenario unlikely."

In short and to make it simpler to understand, the Non-performing Loans in our economy are on the increase - from 9.1% in 2013 to 9.5% in June 2014. And the corporate sector is in an even worse state - here NPLs rose from 15.9% to 17%.

Now on the one hand it may be that the ECB is over-reacting in these post-crisis years where before it was lenient and accommodating. On a general level, this seems to have been the leit-motif of all that the ECB is doing in these post-crisis years.

But it may equally be true that the cash and general situation in the companies engaged in the construction, real estate and mortgages sectors has been deteriorating. The fact that the sector saw fit to develop its own pressure group seems to indicate the sector well knows it is under pressure.

Regardless, in fact, of all the appeals to banks to loosen their strings, the national interest demands that the NPL levels be brought down and substantially.

Coupled to this one may add the story we carry on today's front page about the huge delays in court procedures and litigation where for all promises and repeated commitments we are still Europe's laggards.

This is a huge nationwide vicious circle that turns on itself and reinforces each other sector thus leading to a national slowdown. To break this vicious circle is exactly what the national interest demands.