 Hello and good afternoon everybody. Welcome to the European Central Bank and our first webinar with civil society organizations My name is Victor Krzyżanowski, and I'm with the ECB's Directorate General Communications As you may know, last week the governing council of the ECB met and considered the new ECB staff macroeconomic projections which for the first time fully included the potential impact of the pandemic on the economy and the future We are joined today by Frank Smetz, Director General Economics of the ECB who kindly agreed to walk us through the latest projections that he and his team put together Frank will also give us an overview of the ECB policy response to the pandemic and he will also be with us to answer any questions you may have and hear your comments on those projections I'm sure by now we are all acquainted with virtual events Let me therefore just state a few obvious things. You should be able to see myself and Frank now We will also share some slides with you later on. Those slides will also be available on the ECB website after the event In case you're wondering why you can't see any other participants, please note that this is a feature of the tool we are using But at any moment you may interact with me and my colleagues helping facilitate this webinar through the chat function Please only remember to chat with all panelists. Thank you very much. I can see it At this stage all participants are muted and can't use their cameras In the Q&A session you will be able to speak and also turn on your camera if you so wish As stated in the invitations, this webinar is recorded and the recording together with the slides will be published after the event on the ECB website Now without further ado, let me turn to Frank Smets for his presentation. Frank, the floor is yours Thank you very much, Victor. It's a great pleasure to be here and welcome to this first webinar It's about the impact of the COVID-19 pandemic on the euro area economy and some of the policy responses And obviously my presentation will very much be based on the new macroeconomic projections that we released and published last Thursday On the occasion of the last monetary policy meeting of the governing council Before I go into these projections, I think it's probably useful to take a step back and review a little bit the three stages That one can distinguish in terms of the impact of the pandemic on economic activity in the euro area and more generally on the global economy I mean, the COVID-19 pandemic is of course first and foremost a health crisis and it's a tragic crisis for those of us who are affected and have passed away and their families But that also has left a very strong and deep and sudden impact on the economy as you know And to describe sort of the three phases of the impact of the pandemic on the economy, I sometimes find it useful to make sort of a medical analogy I think it was probably Paul Krugman who at least I heard the first time used that analogy of the economy being put in an artificial coma Very much like those of us who are affected seriously, what governments have done in the first phase is to in many cases lock down the economies and put the economy in an artificial coma And this of course is very different from any other recession or cyclical drop in economic activity that we've seen definitely in the monetary union but even going back in history So that's the first phase, the lockdown phase, then comes the second phase when the patient, the economy springs back to life Now that's a phase where we'll see a very quick bounce back in economic activity but obviously not everything has been healed and the recovery at this stage, the patient may still be hospitalized, needs still to be taken care of And the recovery is likely to be incomplete and that's also something that we will see And then this, so that's the recovery of bounce back phase and then there's a third phase when the patient is allowed to go home and so the return to his previous life or the economy is going back to normal But then there's two questions, first of all, have there been any scars from having spent time in lockdown and with containment and of course that is something to look into And secondly, do we have to change our ways? Very much like a patient may have to change his nutritional habits, maybe also on the economy side But not everything will be the same as before and I guess I don't have to explain some of the changes that we will be expecting So if Victor you can put on the first slide, I just want to talk you a little bit through our projections using those three phases if you like And what you see here on the left hand side is our estimates for the quarterly GDP growth rate of the euro area economy and the changes from the June to the September projections The hard data that we now have pertain to Q2, so that's the second quarter of this year and that's the second pair of bars So what we know is that this lockdown period has left a very large imprint on economic activity in the euro area of about, here it says 12% This is in our forecast, this was before we know the revised number of minus 11.8% in that quarter Now this was the result mostly of the economy being in this artificial coma, in this lockdown, which of course in some countries started earlier, like Italy in February, end of February In others a bit late, but it was basically a relatively short period of two months ending beginning of May But of course it left a big impact in the first half, if you add first and second quarter, we're talking about a drop of about 15%, which is probably almost three times as large than what we have seen in the great financial crisis in 2008-2009 Now one thing that I think is interesting to highlight in this episode is that also apart from the suddenness and the size of the drop in economic activity, which again was related to the outbreak of the pandemic Also some of the other features are quite different from what the usual business cycle or usual recession looks like, in particular, usually it's manufacturing and construction that lead the recession In this case it's mostly services, so about two thirds of that drop are in the services sector and of course we understand why because it's mostly services that have been affected Think about hospitality, hotels, restaurants, travel, leisure activities by the lockdown and by the containment measures Now this has one implication because the services sector is relatively more labor intensive than particularly manufacturing We have to be watchful of what is going on in the labor market and any differences that we see relative to other recessions We've moved into the second phase, which is this bounce back, this sudden recovery, the economy is springing back to life, basically as of May, May and particularly June, July and to a lesser extent August And this will, so we are now at the end of the third quarter, so we have a pretty good idea of what the growth outcome will be in the third quarter and that's the third set of bars there So we expect that this will be around a positive number rather than minus 12, a positive plus 8%, so significant growth in this third quarter, mostly concentrated in second half of May, June, July And these estimates are very much in line with our projections of June, so the good news is that basically if anything, some of the negative effects that we had expected are a little bit less than what we had expected, but obviously still quite bad Now, as we move into the fourth quarter, we will see and we already seeing in some of our indicators like the PMI indicators or confidence indicators and also in some of the high frequency data, the mobility data, the credit card data and so on that we look at That there is a slowdown of this sudden recovery in August, partly also driven in services, partly driven by the fact that in a number of countries we've seen sort of a rise in infections, although the implications so far for hospitalization and deaths has been much less than in the first wave But it's natural and again this is also something that we foresaw in June, that so this big bounce back will now moderate and we will have slow convergence to more normal growth rates, which are in the area of 0.4, 0.5% I mean for a while, hopefully they will be a bit higher than that as the economy is trying to converge to the new economy Now another important element to emphasize in our projection is more shown on the right hand side. Oh, you know, there's a lot of discussion what type of letter should characterizes the recession and the recovery. I mean if you look at levels as we do here on the right hand side, it's not so much a letter, it's what some have called the square root symbol, remember from your algebra lessons. I mean it's a little bit the square root with the second leg, maybe normally would be a bit higher, but that's what we're having. And of course the important feature of this is that the third phase, which is the normalization and I would say transformation phase, to the extent that we have to transform to the new normal to the new economy will be relatively slow. So in our forecast, we assume that only in the third quarter of 2022, we will reach the level, the pre pandemic level of economic activity, and this will still be about three to 4% below what we would have expected the economy to be in March of this year. So we do assume that there will be some scarring and some some some slow pace healing necessary to to bring the economy back to its its its pace of growth and level of growth before. So about where we are now we are basically in this transition from the big bounce back to the normalization and transformation phase, and that brings a lot of uncertainty for us macro economists trying to trying to forecast and project the economy. So the projections article that we published on Thursday, you will see like in the June projection that we have also developed two alternative scenarios, which basically are a function of the narrative on the pandemic. One a mild scenario where we assume and there were some expectations in the markets about this, that maybe a vaccine will be found earlier than we assume in the baseline scenario, which is basically by the summer of next year. So that would lead to sort of a more positive outcome, and another more severe scenario where we would have some sort of second serious second wave with maybe not again the full lockdown, which we know governments definitely want to to want to avoid if at all possible. But where the containment measures will be strengthened the economy will suffer again. So one big source of uncertainty is, as you all know, what will happen to to the to the pandemic and and of course we're not epidemiologists. We read the literature, but the only thing we can do is think about different different scenarios. As I said in the baseline that I showed, basically we expect containment measures of some sort to last until well into the next year, but then a vaccine to be operative as of the summer of next year. Now, the other sources of uncertainty that we're facing and that we have to acknowledge also in our policymaking both at the central bank, but also by governance and supervisors is that there's a lot of uncertainty about the economic and financial implications of these containment measures. First of all, I would highlight the behavior of consumers, an important no feature of this recession is that it's consumption driven services and consumption rather than investment which unusual recessions is the more volatile component. What we've seen is that because governments have put in very significant support measures, including short time working arrangements for lowing arrangements that actually disposable income in the aggregate has not fallen that much it has been reduced growth rate has been reduced, but not as much as we've seen the fall in economic activity, whereas consumption has dropped a lot and we see in the second quarter because of that a big increase in the savings rate. Basically underlying our forecast is a doubling of the savings ratio in the second quarter from an average of 12 to 13% to almost 25% in the second quarter. And so a big uncertainty in trying to foresee what will happen in the next quarter is what will the consumers, the households do with this accumulated saving. Will this normalize quickly? Will there be pent up demand and actually we could have even lower savings rates than before or not. We've done quite a bit of analysis to try to distinguish how much of the savings is forced saving just because consumers could not consume, they could not go to restaurants, they could not travel. And what part is more precautionary saving because the uncertainty is very high, consumers basically want to save money for bad times to come. And we find that precautionary saving is an important component, but obviously the biggest part is this forced saving. And so a big question and we've made the assumption that actually the savings rate would gradually fall back over the projection horizon to where it was before the pandemic is exactly where do you see this balance between pent up demand, which would sort of be a boost to the economy versus precautionary saving, which would be a drag on the economy. So we have in our forecast quite a bit of drag in the economy. Now, of course, we can influence this partly by good policy, which reduces the uncertainty. A second source of uncertainty that we have and of course it's linked also to the first uncertainty about savings behavior is what's going on the labor market. It's very difficult nowadays to read the labor market with our usual indicators. On the one hand, we see that unemployment has increased, measured unemployment, but not to the same extent as we had expected in June. In June, we had expected that actually would increase to close to 10%. In fact, it has only increased to somewhat below 8%. And so the question is, is this a good indicator of the slack that we see in labor market? Probably not. It underestimates the amount of slack. If you look at hours worked, we see that there's a much deeper recession also in the labor market, basically a 15% drop in the first half of hours work. And of course, the discrepancy is partly related to how, what assumptions do you assume about what will happen after some of these furlough arrangements, these short time working arrangements, and some of the other support measures will run out. So that's again a big uncertainty. And of course, what will happen there, how many of the jobs of those employees, which is a large number, we're talking about more than 10% of the labor supply that are now on short time working. How many of those employees will go back and work full time for their firms and how many of those will eventually need to look for other jobs. So we assume in our forecast that there will be some fallout, that the unemployment rate will rise in the coming quarters to probably something below 10%. And of course, that will also be a drag on the economy and will put downward pressure on prices. Let me speed up a little bit and say, of course, there are two more factors of uncertainty when trying to read the economy, what will happen to firms. Many of the measures that we took as ECB were to support credit to firms, including small and medium sized enterprises through our lending operations. And of course, that has gone hand in hand with what governments have done in terms of guaranteeing some of those credits. We talk about 20% of GDP of guarantees by governments in the Eurozone. And with supervisory measures where we have our supervisors, our SSM has given some leeway to banks in terms of also accounting for some of those credits that are under moratoria and that at the moment are not being paid back or that are guaranteed. So one question that's the third source of uncertainty is indeed what will happen after some, sorry, let me just take a sip, what will happen after some of these measures. And of course, the main idea is there to make sure that there are no cliff effects, so that these measures are gradually phased out depending on how the economy is moving. But they need eventually to be phased out in order to also allow for the reallocation of resources that will be necessary following the pandemic. And that leads then to the last phase of factor of uncertainty, which is what all this means for the banks once some of these credit guarantees run out. So far, the bank credit has been very supportive. We had a big increase in bank loan growth from 3% to 7% during the pandemic. But banks, of course, have also indicated that this may not last forever if in the end some bankruptcies and defaults take place, which to some extent will take place, but hopefully to a limited extent. So this is more or less the picture we have on the growth side. Let me be relatively brief. So that we have enough time also for a Q&A on what this all means for inflation. Obviously, our mandate now is to maintain price stability. And this crisis has not been good for the inflation outlook. Our overall assessment is that the demand factors, the negative demand factors related to, for example, the impact of uncertainty on consumption and investment, and also the fall in external demand do outweigh some of the positive supply shocks that we see. We did see somewhat of an increase in food price inflation, for example, during the pandemic. In the short term, there's a lot of uncertainty. You have noticed that actual HICP inflation in August, and you see some of the elements here, dropped to a negative number of minus 0.2%. But this is mostly due to temporary factors. The three main temporary factors underline sort of the extraordinary nature of this negative inflation. I wouldn't call it deflation given its temporary character. The first one is that we had a big drop in the oil price in the past, basically early this year, which is still feeding through to headline inflation and energy price inflation. Secondly, of course, some of the governments took actions by reducing VAT, for example, in Germany. And this has a big impact, again, temporary impact on the profile of both headline and core inflation, as you can see again on the left-hand side, which should wash out at the beginning of next year, in the first half of next year. And thirdly, August in particular was affected by the fact that some of the sales periods, particularly in France and Italy, were moved from July to August. So many more sales in August relative to usual seasonal patterns. And again, that put the downward pressure. But of course, this is not to say that the inflation outlook does not look good. We expect that once that these temporary factors wash out, inflation both core and headline will gradually increase. But at the end of our projection horizon, we have a headline inflation of 1.3%, which is way below where we would like it to see. And similarly for core inflation, if you look at the right-hand side graph, so that's HICP excluding energy and prices, you see that we have a slight upward update, upward move in our September forecast. But still core inflation is around 1.1% in 2022. So again, way below where we want to see it, which is below but close to 2%. And then finally, of course, DCB has taken action since the start of the pandemic. If you can put up the slide, Victor, which gives a bit of an overview of our measures since March of this year. I took this from a recent speech by Philip Lane, our chief economist and board member for the Jackson Hole Conference. You can find it on our website. So the two main, I mean, he talks about basically three challenges that we as ECB had to face. The first challenge was to stabilize markets. There was a lot of market displacement in the early phases of the crisis. And that's where particularly our PEP program, the pandemic emergency purchasing program has helped stabilize markets. One example is commercial paper markets, which basically dried up and of course inhibited the financing of firms, which is that market is again alive and there is issuance. The other big fragmentation that we saw was in sovereign debt markets. And also there, the flexible purchase program that PEP has helped in bringing back the spreads in sovereigns to levels that are much closer to what they were before dependent. So that's a first challenge. And I think that challenge we so far have faced successfully. The second is to make sure that in these very uncertain times where many firms will lose, have lost revenues, that liquidity and financing continues to come on board. That's where our lending program, these are the green parts, I think. Sorry, I should put up my glasses. So that's where our lending programs, the targeted LTRO has been. Okay, so it's the second, it's the green part and the different sort of summary of the measures taken there. So where we lend to banks at very favorable rates under the condition that they maintain their loan book to the non-financial corporate sector, including small and medium sized enterprises. As I mentioned before, I think also that's a challenge that so far we have faced successfully. At least if you look at credit growth, it has, if anything, increased as firms demand for loans increased because of the special situation. And then the third challenge is to upset what I showed a minute ago, basically the downward shift in the inflation path, looking forward, given, again, our price stability mandate. Again, that's where the first set of measures our asset purchases are helping. And particularly the recalibration that we did in June, the increase by 700, 600 billion of our asset purchase program has helped in lifting a little bit the inflation path as we saw the difference between the September and June. Outlook. So this is what, and of course there's many details, but this is sort of the main elements of our monetary policy response. What you have, some of the other elements, particularly the last row, which is probably not readable, has to do with the supervisory measures, which went also hand in hand with our monetary policy measures, which were taken by the SSM, our supervisory arm. And of course what's not on this slide and very important in this crisis is what governments have done and particularly fiscal authorities over this crisis phase. Governments have announced fiscal stimulus to gather national governments of the order 4.5%, which is two to three times larger than what was done in the financial crisis. And of course this is a supporting factor for the outlook. And in addition to that, of course we have also a very historic agreement amongst governments in the form of both the sort of three safety networks for households, firms and governments to the tune of 540. million, billion euros and probably even more important, the new generation EU program of 750 billion. Some of these measures are not in our baseline forecast, particularly for example the most recent French announcement of a 100 billion additional stimulus is not in the September forecast. Also some of the spending, additional spending that will come from the new generation EU is not in our forecast. And so that constitutes a bit of an upside risk, which hopefully will balance the many sort of downside risks that I also talked about. Overall the governing council saw the risks to the downside. So if we think about those two scenarios, there was more relatively more weight on the downside risk. And of course that also has led to the message that the president gave about no complacency in terms of our mandate. Let me stop here. I probably took it along. Thank you very much Frank. I don't think it was too long. Thank you very much for this presentation. I'm sure our participants will now have a number of questions. Ladies and gentlemen, if you'd like to ask a question, please raise your electronic hand. Once your name has been called, you will be able to start speaking and also if you choose so to turn on your camera. Of course, if your organization has released any projections recently, please also share with us those numbers. And if you have any comments on the projections that Frank presented, please also share those with us. And finally, please state the name of your organization and your role in it. If you don't mind one more time, please raise your electronic hand if you'd like to ask a question. Once you hear your name called, you may start speaking and you may also want to switch on your camera. If your organization has released any projections recently, please share those with us as well. And please state the name of your organization and your role in it. I can see that there is Stan Jordan who would like to start the discussion. Stan, if you are ready, you can turn on your camera please and you can start speaking now. Can you hear me? Yes, sir. We can hear you absolutely. Thank you. Excellent. Well, good. Yeah, hello everyone. Thanks for organizing this seminar. It's good that ECB is making efforts to reach to civil society. My name is Stan Jordan. I'm working for the Director of Positivity in Europe. We are an NGO based in Brussels and we work on financial policy as well. So I have a remark on the question. So obviously one of the greatest interest certainty is this problem with excess savings that occurred. So we've seen huge numbers in additional savings. But of course, when we look at those numbers, those are aggregate. And the reality is much more granular because certain income groups have much more savings than others. And the crisis as well as affected groups differently. So I think the issue there is that certain income groups are probably not at any added savings. Low income people have been much more affected by this crisis. If you are a freelancer or if you are a low income, you don't necessarily benefit from partial unemployment schemes, for example. And in that respect, what can the ECB do? Because the ECB, all the tools you mentioned, and obviously I respect the fact that those actions were needed. But all those tools, they are only easing borrowing constraints essentially at the bottom of it. So if you are a precarious worker, if you don't enjoy partial unemployment schemes, if you're an employment, how do these policies help people? And because it's not just about the equity aspect of this. It's also because ultimately the economy is made more fragile by the fact that certain income groups have really fallen down. And because there is interdependency in the economy, certain businesses, certain sectors are going to be most affected, not in aggregate just because their clients are those specific people. And then you have an old chain effect. So I'm wondering how do you really take those things seriously? Looking at the granular, because I see some midline speeches by some governors that are really saying we don't have a problem with consumption because we have excess savings. And I think we have to get much more real here. So are you looking at that on the research aspect? And also in terms of policy, where do you see the potential for improving monetary policies so that we get a better, we address this issue much better? Thank you. Frank? Thank you very much, Stan. No, these are very important consideration. And of course we do look also behind the aggregate numbers. And one of the tools that we are developing is actually sort of a consumer expectations survey, which is a microkinometric survey, which will hopefully, particularly in the future, we're in a pilot phase at the moment, give a much richer information set about how different parts of the society and of households are affected. I mean, one of the things that comes out from, again, some of that pilot work is exactly what you're saying. What we find is a lot of heterogeneity in terms of the impact of the pandemic and the containment measures on poor versus more rich households. So one of the things that we find is that actually when you belong to the sort of the poor segment of society, in that case, actually, your income is relatively more affected, whereas your consumption opportunities are relatively less affected. I mean, one way of explaining that is, of course, if you're poor, you spend a lot on basics, not food. And of course, there was no constraint, but prices did increase quite a bit. So consumption was okay, but of course it's the poor segments that were affected mostly by some of the negative developments in the labor market and unemployment, rising unemployment. The drop in employment. So we're talking basically about 5 million people that have become unemployed or 5 million people that are no longer employed since basically the first half of this year. Whereas if you look at the richer segments of the population, what we see there is actually the opposite, that those people, those households are more affected in terms of their consumption opportunities. Again, these are the households, not richer households that travel a lot, that go to restaurants a lot, potentially a lot. And of course, they couldn't do that. Whereas on the income side, they have been less affected because we know, and again, you can understand why, because often it's the richer that have office jobs that are the higher skilled jobs, which can easily more transfer to teleworking and so on so forth. So, so again, we make a big effort to try to increase our knowledge there and this is also part of our strategy review, which is ongoing to see what we need to do in order to have a better picture. So that's just acknowledgement. Now, what can we do about it? I mean, again, we are reflecting on this also in this year long strategy discussion. But I mean, first and foremost, you know, our actions are really geared at ensuring, you know, that price stability is maintained. Now, in order to do that, I mean, we have to respond to the drop in economic activity to the rise in unemployment. And so, of course, how we do it is typically, I mean, it's sort of we are in conventional time, so it's true different instruments than usual for the drop in the interest rate, but it's by maintaining credit flowing and interest rates and financial conditions ease. And this will trigger into spending, support the economy, reduce unemployment, and thereby also help hopefully, and normally that should be the case, sort of relatively more, those that are affected by unemployment. So, but by stabilizing the economy, we also stabilize some of these distributional effects, because in the end, it's really the poorer parts of society that are affected, most by unemployment. And again, that's one of the things we see in also our micro data. Thank you very much, Frank. I hope Stan, this addressed your question. Please remember to unraise your hand or lower your hand, of course, unless you want to speak later on again. I can see that we have another request for taking the floor. Just as a reminder, ladies and gentlemen, if you'd like to take the floor, ask question or make any comments, please raise your electronic hand. Once your name is called, you will be able to speak and you may choose to turn on your camera. The next participant intervening will be Martin Schmalzrit. Martin, you can start speaking now and turn on your camera if you wish. Please kindly state the name of your organization and your role in it. Thank you. Hello, can you hear me? Yes. Okay, so my organization is Co-Facet Families Europe. So we are a European NGO representing the interests of families, but also consumers, consumer protection, financial inclusion and all kinds of other issues. So thank you very much for your very interesting presentation. It's really very detailed and interesting. So what I wanted to point out is basically in the various forums where we are, ECB, for instance, and the Banking Stakeholder Group or the FSUG, what we see is a sort of a fear of a Japanification of the world economy with high debt overhang, private and public alike, and they're sort of locked in 0% interest rate and no growth. So also envisaging the long-term consequences of this crisis, like for instance, we're mentioning telework. All those empty office spaces might also then trigger sort of cascading bankruptcies for real estate companies that can also affect the banking sector, obviously the travel businesses and all businesses depending on travel and tourism. How are they going to be affected? And we can't really count on the public sector to prop them up artificially via increasing public debt forever, but at the same time allowing them to fail could set off a real deep crisis. So and then regarding consumption, you're mentioning that consumption sort of settled at lower levels and savings were a bit higher. But when we're talking about sustainable development, for instance, it might be a good thing that people start being a little bit more picky about what they consume. Instead of having this counting on a continuous increase in consumption each year to sort of have this smooth growth over time. There's also no mention of the political risks that this crisis has set off because I think many citizens might be very unhappy with the way it was handled. And you can clearly see that there's a big demographic deficit here where many people found themselves in technocracies rather than democracies and their opinions counted for nothing as opposed to experts in deciding what should be done in handling this crisis. So that might also have a severe political instability and backlash which will not help in the economic recovery. Which brings me to the final sort of overall consideration and overarching question of whether a debt based monetary system can handle a transition to a world where growth plateaus or decreases even over the long term, especially considering the challenges such as climate change, which will not help. So does the ECB basically envisage considering alternative ways of money entering and leaving circulation besides private bank lending in maintaining its price stability and not just relying on that. So thank you very much for your time. Thank you very much, Martin. I mean, these are many observations and many, many questions. And I mean, if there's one thing that I think we've learned many things, but one thing from our perspective that we've learned is that obviously for many of these things we shouldn't be looking at central bank. No, it's really the times when some people thought central banks were almighty. I mean, that's finished. And again, this is first and foremost a very important health crisis. It's also a crisis that is, I think, related to some of these longer term challenges that we will be facing, including climate change. You touched upon that. But first and foremost, it's the governments and other authorities that have to deal with those, those, those thousands problems. I mean, let me just say quickly a few words on some of the elements that you mentioned. First of all, fear of Japanification. I mean, we're clearly not there at the moment. So, I mean, there is no sense in which there is a high probability of deflation at the moment. If anything, what we have seen is that inflation expectations have somewhat stabilized. If you look at market based inflation, we have to sort of backed up a little bit. And in general, the surveys show that inflation is still it's low, but we're talking about no 1.6%. So which is not it's lower than we would like it to be, but it's also not zero and it's not, not, not negative. And of course, all our actions are really geared at making sure that we can converge back to something that is close to 2%. Now, it is also obvious that that's why I also had this idea of transformation in my mind in the third phase of this crisis, that we will not go back to Exanti. We will have to organize our economy a little bit differently. But of course, that's a much bigger set of issues than just the health crisis. And again, I mean, I don't want to refer too much to our strategy view, but you know that some of these bigger structural changes like climate change will feature in reviewing our policy strategy. I mean, what's important is indeed that, and this will be a very difficult balancing act, is this transition from support measures. I mean, we still are at the end of rescue and support, which is very important in this crisis. But at some point we have to move towards transformation, reallocation. And so as you said, we cannot keep on supporting firms that no longer have a demand, that no longer have a business case. And so, and we know that there will have to be these structural changes. And this is true to some extent for our measures, in the sense that some of the measures about, for example, supervisor measures at some point will have to transit into much more targeted measures and also allowing for this reallocation of credit. But it's also true for all the other measures that has been taken. And to find that balance in terms of making sure that we don't fall off the cliff when this stops, but at the same time, have a ramp. I think there was somebody mentioned, we really need to go from the cliff and have a ramp into this kind of new normal. I mean, do we need to consume less? I mean, I don't know, maybe this is not to me as a central banker to say, but I mean personally, I think that we don't necessarily need to consume, unless we need to consume differently. There are many ways in which we can enjoy life and consume, which are much less taxing on our resources, on our natural resources. So I don't worry too much about this discussion about growth versus no growth. I think we will have growth, because that's part of the innovation and sort of the longing for creativity innovation that we have in our societies and in our systems. But it will have to be different. And of course, that will have to be to be to be accompanied by the right policies. And here I would say, again, it's not really the center bank but it's really the governments. And I would put in the strong welcome and support that also the governing council has put up for the new generation youth fund, which clearly signals out some of the key priorities in terms of climate change and in terms of digital revolution. And it's clearly that in my view that this cannot be stopped if you think about digital, but we need to have policies that allow everybody to participate in what I think will be very exciting new developments. Let me not talk about the political instability. I mean, that's definitely a risk. It's a global risk. And but again, from that perspective, we just humble bureaucrats. Thank you very much, Frank. I hope Martin that addressed your question. I'm being cautious of the time, but I hope we can still manage to give the floor to two participants that would like to ask questions. So let's try to do it a bit quicker. Mary Collins would be the first one and then Henry Eviston are the participants that raised their hands. Mary Collins, you the first one you may start speaking now and switch on your camera, if you wish. Okay. I'm not so I'm going to make it so rather than waste time. And it's not that I don't want to see you, but just don't manage to find the camera. First of all, I would also like to say thank you very much for organizing this event. This is really great to have this exchange amongst us. I'm representing the European Women's Lobby, which is the largest organization of women's organizations and the European Union representing 2,000 women's organizations in 30 countries. I think for us, this crisis has shown how women played a massive role of upholding the whole economy and society and it's also made visible the undervaluing of women's work and particularly in areas where women work care, cleaning, education really has been undervalued for a long, long time. So we think the time has come to change that and that we're not really making the right investments. What we saw after the financial crisis was a real politic of austerity measures, which in fact led to some of the crisis that we had in the health systems. A couple of months ago, because over the years there was a disinvestment in those sectors, we believe that the time has come to change our economic model has shown its weaknesses and its limits as well. So we would like to see more massive investments in public services, particularly those services that have played a key role in the last couple of months and that's particularly health care, education as well. So my question to you is, will the European Central Bank support this kind of a change and move to a different economic model, one which will entail in the short term an increase in public deficit because it's about investing massively in public services. But in the long term, as this crisis has shown, will be of benefit to us all because it is about long term investment and long term spending. So I'd like to have your opinion on that. Thank you very much. Thank you, Mary. I appreciate your question, Frank. Yeah, let me be short this time. I mean, obviously, the issues that you mentioned are really there for governments to take care of and definitely, I mean, these sound reasonable choices, particularly also following this particular crisis. Our policies are there to facilitate financing of projects, including of governments. And so, but it's up to governments that to decide where to spend and what to spend. From our side in order to make this this big increase in deficit spending, which we are seeing and it is much bigger, as I mentioned, than in the financial crisis to also sustainable. I mean, it's important that a lot of this money is also spent in investment and public investment has is at a very low level for a number of reasons, and can actually support growth in the future, and thereby also support the sustainability of the public debt that governments are taking up. So, but in the end, as I said, to specific choices about where to spend it, of course, a government question. Thank you very much, Frank, and we now going for the final question to Henry Ebbistan. Henry, please tell us something about your organization and your role in it. You can start speaking now and you can switch on. This is Henry Ebbistan from the European Policy Office. My connection is a bit slow, so I hope my voice will suffice. I suppose the COVID crisis has provided very clear evidence of the links between healthy ecosystems, healthy people and the healthy economy. Specifically, if you want to help the economy, we need to stop damaging our environment, starting by ending support for fossil fuels. But the ECB, by June of this year, had acquired assets worth almost 8 billion euros from highly polluting companies. So, given what we know about the importance of healthy ecosystems for the economy, will the ECB commit in its strategy review to align its asset purchasing programs, its collateral frameworks, and its refinancing operations to the banking sector with the Paris Agreement, in particular, to ensure that they do not support fossil fuels. And will it use the eutectonomy of sustainable investments to accomplish this? Thank you very much. Thank you. Thank you very much. I mean, important questions. And I mean, as you know, this is indeed one of the topics that is very much on our agenda in the strategy review. I cannot really sort of answer the question because that will depend on the outcome. But I understand there will also be a webinar with all of you, particularly geared towards the strategy review. I'm sure you can ask that question again to our President. Indeed. Thank you very much, Frank. We will be trying to organize similar gatherings in the future, be it with experts or policymakers at the ECB. The next one, of course, will be in the framework of the strategy review and the whole ECB license initiative. On the 21st of October, there will be an ECB license event with the President Lagarde. And certainly, that will be the platform where you can raise such issues. There is also an ECB license portal open and available to you if you'd like to make use of it to submit your suggestions or input into the strategy review process, which, by the way, Frank is also managing together with some colleagues within the ECB. But on the projections that was it from us today, thank you very much, Frank, for presenting it and answering the questions. Thank you very much, ladies and gentlemen, for joining us online. As said, the video recording of this event will be made available on the ECB website together with the slides from today. We hope to see you very soon, but please stay safe otherwise. Thank you very much and bye-bye.