 So, welcome to today's IIEA webinar entitled Combat in Crisis, the EU's response to the COVID-19 pandemic with our speaker, Sean Berrigan, Director General of DGFISMA, the European Commission and the highest ranking Irish civil servant in the Commission. This event is part of our future of the EU 27 supported by the Department of Foreign Affairs and Trade. The webinar is also jointly organised with the European Commission representation in Ireland. We'd encourage attendees to tweet using the handle at IIEA during the event and during the Q&A. The hashtag is hashtag FO EU 27. The address in the Q&A will be on the record. And just before we go, let me give a brief introduction of our speaker. Sean Berrigan was appointed Director General of DGFISMA in March 2020. Before assuming his current role, he served as Deputy Director General and Director for Financial Systems Surveillance and Crisis Management in DGFISMA from 2000 to 2014. He worked in the Director General for Economic and Financial Affairs, first as Head of Unit for Financial Markets and Financial Intermediaries, and then as Director for Financial Stability and Monetary Affairs. Sean, over to you. Thank you. Well, thank you very much, Dan, and good afternoon, ladies and gentlemen. Thanks a lot to the IEA for the invitation to participate in this webinar. I hope everybody online is keeping well in what are, of course, very difficult times. I think it would have been nice to meet you all in person. I have not been to the IEA for a while, but I guess we're all having to adjust to a kind of new way of doing business during this period of confinement. On the other hand, I must say it's very reassuring that even a non-techie like me, I can tell you I'm a truly non-techie, is still able to engage in outreach through the wonders of modern communications. Now, today I want to speak about some economic aspects of COVID-19 crisis. Of course, this is first and foremost a health crisis. Sometimes it seems almost trivial to be discussing GDP figures alongside reports of a sort of human tragedy that's unfolding across the world. But we have to be clear that managing the pandemic will come at a major economic cost, and that there is a potential for very deep and long-lasting scars on the productive capacity of the global economy. And in this regard, I think the EU and indeed the Irish economies are no exceptions. So in my remarks today, I would like to discuss the EU strategy for managing the economic aspects of the COVID-19 crisis. Now, this strategy involves actions, of course, both at national and EU levels. But as you might expect, I will focus mainly on the EU level actions in this strategy. I want to discuss the EU level economic strategy in terms of two distinct phases of the crisis. The first and what I would call the more acute phase of the crisis reflects the economic impact of widespread confinement measures. These are things that we have been experiencing for the past several weeks. But the next phase of the crisis will come as the confinement measures are eased progressively, and that is hopefully without the need for a new introduction later on. And this phase will involve a process of economic repair and recovery, and it could last for several years to come. And then finally, given my own specific responsibilities with the permission, I want to say just a few words about the financial system. And here I'll speak of how the financial system has functioned during the acute phase of the crisis and how it will have a very key role to play in the phase of recovery and repair. But let me begin by discussing the acute phase of the crisis, and which, as I said, has been characterized by widespread confinement measures, or the so-called lockdowns. Now, from an EU perspective and indeed from a global perspective, the economic impact of the COVID-19 pandemic has taken the form of what we would call in economic terms an exogenous symmetric shock. It's exogenous because it can't be traced to specific economic policy areas or errors, I should say, either at national or EU levels. And it's symmetric because it has impacted all the member states in pretty much the same way, albeit with somewhat different timelines. And this exogenous and symmetric nature of the shock makes it very different, I think, from the great financial crisis of 2008 and 2009. That crisis clearly originated in policy errors at national and EU levels in the preceding years, and that crisis evolved very differently across the member states of the union. But these differences don't mean, of course, that there are no lessons we can learn from the great financial crisis. There are many, notably relating to how to act early, how to respond decisively, and how to communicate clearly across the crisis. And many of those lessons apply equally in the crisis today. And I think they have been learned to varying degrees. But I think in other respects, the two crises are different and therefore warrant very different policy responses and some new thinking is required. Now, the Commission has not yet published its spring economic forecast, but the indications aren't that good if we look at the forecasts recently published by other international institutions. It's clear that we face an economic recession of unprecedented severity in more than a century. Not even during the world wars and the depression in the intervening years have we seen such a sharp deceleration in economic activity. If we take the IMF WAO forecasts, they are predicting a decline of about 7.5% in euro area GDP in 2020. And that's in the context of an unprecedented decline of 3% in world output. Now, there's a rebound of 4.7% predicted for 2021 in the euro area GDP. But I think if you read the real texts carefully, they reveal many and indeed only downside risks to this rebound. So this forecast of an unprecedented decline in economic activity and rather uncertain recovery already takes account of the massive public policy responses at least in weeks. And without this response, of course, the economy will be a lot worse. So what exactly has been the strategy underlying this massive public policy response? Well, the underlying strategy at both national and EU levels has been to inject liquidity into the real economy. And the objective of this liquidity injection has been to allow non-financial corporates and households to bridge cash flow problems amid the period of confinement when, of course, economic activity has largely come to a standstill. In the EU, the banking system has played a key role in implementing this liquidity injection strategy. It has this role because the banking system remains the main conduit for channeling credit into the economy. Despite my best efforts in recent years to build the Capital Markets Union, the banking system remains the main channel of liquidity flow to the economy. Fortunately for us, the overhaul of the potential framework for banks after the great financial crisis has left banks in a sufficiently robust condition to play this role. But I think we cannot just take that resilience for granted. And I want to come back to that a little bit later in my final point. But this strategy to inject liquidity into the real economy has had several elements. First, central banks, the ECB for the Euro Area and Ireland, have made available substantial amounts of low-cost liquidity via the long-term refinancing operations and the targeted long-term refinancing operations. At the same time, the ECB has eased strains in the functioning of the wider financial system via a massive new asset purchase program, the Pandemic Emergency Purchase Program of PEP. The PEP is not only large in size, but it has the capacity to respond more flexibly to financial market developments than previous facilities. Secondly, supervisors, the ECB SSM for the Banking Union and for Ireland, have provided capital and operational relief to banks. This relief has created room within the balance sheets of banks and released staff resources so that they can onlend the liquidity that's been provided to them from the central bank. Thirdly, the supervisors and the commission have taken steps to provide regulatory relief to the banks. This regulatory relief involves exploiting flexibility within the existing framework and a limited number of targeted and temporary amendments to the framework. And yesterday, you will have seen that the commission adopted a package of proposals for such amendments to the potential framework for banks. And these proposals will hopefully now be agreed by the Member States and the European Parliament in a swift co-legislation process. Fourthly and very importantly, of course, national governments have taken significant fiscal measures to inject liquidity into the economy. For example, via short-term unemployment payments, tax deferrals, et cetera. In addition to this, the measures have been taken by governments to improve the capacity of bank clients to support additional credit. For example, via debt servicing moratorium and state guarantees. So all of these things have come together to combine in a strategy that injects liquidity into the real economy to get through this period of economic interruption. Now I should, as a commission official, of course, point out that mission has also played a wider role in the secured phase in the crisis. It has escalated the massive fiscal policy action at national level by temporarily relaxing the rules of disability and growth act and the state aid framework. It has mobilized the EU budget and the EIB to provide up to 8 billion of working capital for SMEs and to redirect 37 billion in cohesion funding towards crisis response efforts. It has brought forward a proposal on unemployment and reinsurance from member states, this so-called SURE instrument. And SURE involves up to 100 billion in loans and 25 billion in guarantees. And lastly, the commission has taken a range of other measures from boosting expenditure in the health care field to creating the first ever EU stockpile of medical equipment, co-financing flights to repatriate EU nationals and providing support to partners, countries outside of the EU. So we've been engaged in a full range of activities with the means we have available to us. Now we've been only able to do this because we can rely on long-term budget. Of course, the available resources have been depleted because we are now reaching the end of the 2014-2020 budget period. But let's be clear that without the EU budget, none of the actions by the commission would have been possible. And I want to return to this issue of the budget a little bit later because it is quite important. So this is the acute phase. The phase we're going through now, we're in confinement, whereas a sharp interruption in activity and we're trying to use liquidity to get cash flow businesses, cash flow, cash flow constrained businesses and cash flow constrained households through this gap and into the next phase when we can start to recovery. All these various responses I have listed are now being implemented, implemented now quite swiftly. And I hope that they will limit the worst effects of this confinement period. But when we begin and we are now beginning to think about the post-confinement world, we have to start thinking about the process of economic repair and recovery longer term. We have seen, thankfully, in most parts of Europe now that transmission rates of the virus have begun to moderate. There can, of course, be no complacency here in relation to the pandemic. But as I said, policymakers are now beginning to turn their attention to strategies for existing confinement measures and then beginning this process of repair and recovery. Now, given the depth of the likely economic recession, this process of repair and recovery is going to be challenging. I think the earlier hopes that the economy might somehow spring back from the confinement period, like some kind of coil spring, well, I think they have all long since faded. So we expect the exit from confinement to be gradual. And so the pace of economic repair and recovery will be correspondingly moderate. The pace of recovery, I think, will also reflect the extent to which such a sharp recession induces not only kind of conjunctural pressures, but also structural changes in how the economy functions going forward. And it's hard to imagine, in fact, that deep scarfers and very permanent damage can be avoided. Now, undoubtedly, a further important fiscal effort will be required to push the EU economy back onto its pre-crisis path. This will require additional government assistance for various sectors of the economy. And these measures must address not only the economic, but also the social consequences of the crisis. And for the EU, of course, this repair and recovery phase brings very specific challenges. I said earlier that the crisis has taken the form of a symmetric shock. But the reality is the capacity of member states to respond to that symmetric shock has not been and will not be the same. Indeed, some of the member states hard as hit by the COVID crisis have the least capacity to respond to it. And in that sense, the recovery from the crisis risks being quite asymmetric and could result in distortions of the living playing field and so hampered the effective functioning of the single market going forward. Now, this level playing field dimension to the crisis repair and recovery phase has, of course, ignited a debate about whether and how the union could have a collective fiscal response. This, of course, is not a new debate. We have had debates about mutual bond issuance going back to 2000. I know that because I was there when they started. And typically, that debate has focused on efficiency, typically weighing the permanent pros and cons of common debt issuance for the proper functioning of economic and monetary union. But in the context of the COVID-19 crisis, I think the debate has focused more on equity and the justification for a one-off collective issuance of debt as an act of solidarity among member states. While this is an old debate, and this old debate has acquired a new focus, it remains as complex as ever, I'm afraid. It raises highly sensitive issues about how the EU should function and the trade-offs between what might be justifiable solidarity, but also what is necessarily fiscal discipline. And many of those who would support a common response to the COVID-19 crisis at the same time would worry that such a response could result in a permanent change in how the union functions. Now, all that being said, the risks of the level playing field from an asymmetric economic recovery are indisputable. And with that in mind, important steps towards a collective EU response have already been taken. Many of you will be aware of a Eurogroup report which was presented to heads of state and government last week. And that report lists a series of measures that collectively add up to a possible 500 billion euros. And that collective response is likely to go further. The European Council has mandated the commission to explore design options, excuse me, for an EU recovery fund. This recovery fund should reflect, and I quote the conclusions, a coordinated exit strategy, a comprehensive recovery plan, and unprecedented investment. Now, internal analysis within the commission is ongoing. We have been given this mandate. I know you'll probably be disappointed, but it's a bit too early for me to go into any detail on that now. But I think the Eurogroup has given a clue by concluding that the next EU multi-annual financial framework, which is the EU budget, will play a central role in the economic recovery. The Commission President von der Leyen has also made it clear that the EU will need massive investment in the form of a Marshall Plan for Euro, and that a powerful new EU budget should be at the heart of any such effort. So the commission will therefore propose targeted and ambitious changes to its proposal for the next EU long-term budget. And we're currently studying the different options, and we will come forward with proposals on that quite soon. But I cannot go further than that now, I'm afraid. But before I conclude on this point of repair and recovery, I just want to say a few words about how any recovery plan should fit with the existing policy priorities of the EU. Because not unexpectedly, a debate has started in some quarters, suggesting a potential trade-off between measures to promote short-term economic recovery and longer-term sustainable economic development in the EU. This is a sort of speed versus sustainability discussion. And according to some commentators, responding to the COVID-19 crisis should take priority over all other policy objectives. For these commentators, the EU's other priorities, notably the so-called twin transitions to a sustainable and digitalized economy, should be put on ice. And we focus only on quick recovery from the COVID crisis. Now, we in the Commission don't agree with that. We do not see a trade-off really between the speed and the sustainability of public recovery. Now, I'm sure, like me, many of you get tired of hearing these old cliches that every crisis is not only a challenge, but it's an opportunity. I've lived through three major crises now, and I accept the opportunity, but I also see disadvantages. But the reality is that this crisis not only presents an opportunity to rebuild the economy on a more sustainable and digitalized basis, I think it's actually essential that we do so. Because today, you know, we are required to heed the advice of medical science in handling the catastrophe of the pandemic. I think this is highly appropriate. But in the same way, we must heed the advice of climate science in handling the catastrophe of global warming. And unfortunately, the climate science tells us that 2050 is not a deadline that we can postpone for a year or two or three or four like we can with regulatory deadlines like Basel 3.5, for example. If we don't achieve carbon neutrality by 2050, the scientists tell us that we will be too late to avoid a climate catastrophe, and we're already struggling to keep up with that deadline. So I don't think that is something we can simply postpone for a later day. And similarly, there's one thing that confinement has taught us. It's the power of digitalization. You know, entire financial markets, traders, investors, infrastructures, providers, supervisors, are functioning on a predominantly remote basis today. There's also evidence of a surge in online shopping that I think is likely to accelerate dramatically the previous trend away from physical retail activity for shopping. So I think the direction in terms of digitalization is also pretty clear. But it should be noted that most of the new technologies that we're using, I think perhaps also the technology we're using today, belong to suppliers from outside the EU. So the EU is to be a powerful sovereign economic force in the future. It's essential that we also embrace the opportunities of a new digital era with the same vigor as our main trading partners. So again, we in the commission don't believe that the digitalization agenda is something we can simply postpone while we focus on what are called more important parts of the COVID recovery strategy. So to sum up on this point, if we are to have a strategy for repair and recovery for the EU economy post crisis, why should that should not be smart? That is promoting not only recovery, but also the trend transitions to a sustainable and digitalized economy. So before I conclude my remarks, I have looked at the Q'd phase. I've now looked at what we see as coming forward as a repair phase. I just want to conclude with a few remarks on the role of the financial system amid the crisis. And here again, there are sort of two aspects to consider. The first is how the financial system has been impacted by the Q'd phase of the crisis and how it has responded to that impact. And then secondly, what the role of the financial system will be in the next phase in this repair and recovery phase. Now as I said earlier, clearly the reform of the financial regulatory framework in the years following the great financial crisis has paid off. In particular, the banking sector still the most important part of the EU financial system entered the COVID-19 crisis in much more resilient shape than back in 2008-9. We have bank capital ratios that are higher. We have leverages that is lower. We have reliance on short-term liquidity which is now fully contained. And all of this has allowed the banks to act as an effective conduit for injecting liquidity into the real economy. So as I said, to assist solvent with cash flow constrained companies and households. The wider financial system has experienced, I think, greater stress, to be honest, in this acute phase. I think the precipitous drop in global equity prices captured all the headlines, but there were also historically high activity volumes and volatility in other parts of the market as well. And from our ongoing contacts with market participants, we've been reassured that for the very most part, the financial system which stood the pressure pretty well. Of course, central bank actions were decisive in calming investor sentiment. But again, I think the prudential reforms, the regulatory reforms that we put in place over the last 10 years have paid off here as well. And so all of this allows me to annoy you with another overuse cliche. And that is that this time, the financial system was part of the solution rather than part of the problem. It's an annoying type of cliche, but it is true. And we are clearly not facing a situation today where the financial system is at the epicenter of the crisis. And looking forward, the financial system will play a vital role in the phase of economic repair and recovery, but it will also have challenges of its own in that phase. So as we enter the next phase, EU banks will be expected to play their traditional role of financing viable economic activity. And the targeted amendments that we are making to the prudential framework and have already made will help, I think, in this regard. But we will need to strike an appropriate balance, I think, between using the flexibility within the regulatory framework to support bank lending but not taking unjustifiable risks with the very resilience that the banks have constructed since the last crisis and which has served us well so far in this crisis. Now, EU banks may be more resilient than they were 10 years ago, but they face an economic outlook that is amongst the most challenging in a century, as I've said, and many of these banks face challenges with low profitability and variable asset quality going into the crisis. So this need to preserve resilience in our banking system is one reason why I think we will also need to rely on other parts of the financial market to finance the economic recovery. I should also add that the recovery phase will probably be less about preserving liquidity and more about reinforcing solvency. So this suggests the need for more equity than debt, again pointing to a greater role for non-bank financial states of financing the recovery. At the moment, many of these non-financial bank actors are on the sidelines in so-called risk-off mode, although the recovery in global equity prices has been impressive if not entirely understandable. This risk-off mode is not so surprising, I think, because face such uncertainty about the depth of recession, the pace of lifting confinement measures, and the shape of the economic recovery, its risk aversion is to be expected. But as this uncertainty eases in the coming months, we can expect investors to begin the process of reinvestment. And in this process, they will seek to distinguish among economic sectors and companies within sectors that will have the best chance of recovery. And it's important that their investment decisions are somehow consistent with public policy access in promoting recovery. That's why the Commission has just announced proposals for dialogue with the industry that you saw that in the communication yesterday in the executive vice president announced it in his press conference. And I think given the scale of the task and the finite means of public support, the need for a coordinated public-private response is pretty obvious. So I think I've spoken now for about 25 minutes, so I will close by simply recalling the scale of the crisis and the challenge presented by responding to that crisis. We have not faced such a sharp contraction in activity in any of our lifetimes. Of course, the crisis is primarily a health crisis, as I said, and health considerations must take priority. But managing the economic aspects of the crisis cannot come too far below that list in terms of priorities. So for the EU, managing the economic aspects of the crisis is a major challenge. It's a challenge not only in terms of scale, but also in terms of coordination and, as I said, collective response. Member States have different capacities to respond, and these differences are a potential threat to the economic and social cohesion of the union. Well, the first elements of a coordinated collective response have already been delivered by the Eurogroup, and the commission has been asked, as I said, to develop that collective response for that. So I think we can say more about that going forward, but I think the EU will again rise to the economic challenge of the crisis and hopefully will put the economy back on a path not just of strong, but also of sustainable and digitalized development. So with that down, I think I'll stop here and hand over the questions. Thank you very much for your attention. Thank you. That was great. Just to let the 222 participants here know there are a lot of questions coming in. If you want to get one in, get it in early and use the Q&A function, not the chat function, please. It's just very difficult to follow two sets of questions coming in. Q&A function at the bottom of your screen. So kick off, Sean, Terry Neal, a board member of the Institute, makes a point and asks the question. He heard a Swedish epidemiologist this morning say that Sweden's approach has already been vindicated. Now, we're not here to talk about the medical side of things, but as someone who clearly keeps an eye on all the member state economies, do you see any specifically around Sweden? Do you see it appearing, its economy appearing to do less badly than others and any other observations you might make about how different member states economies are adapting to this shock? Well, as you said, I'm not a medical expert epidemiologist either. And I think what I'm told is we have to wait for a bit longer to see to what extent the various different approaches actually work out in terms of numbers, in terms of effects. I can imagine that because the Swedish economy has had a less lean lockdown than others, it is performing better than others at this time. But that's not so much a function of the virus, but more a function of the differential response to the virus. Most member states have taken more, how would I say, stringent confinement measures. But the issue there is those measures have tended to reflect the extent of the crisis. So you'll see in countries like Italy and Spain, there have been very, very stringent lockdowns. Then as you move up north, you see various levels of approaches. I think when I speak in terms of capacity, it is not so much the capacity to manage confinement. I think the real problem is how you're going to control the economic dimension into confinement. And whether or not on the way out, different countries will have different capacities, particularly in fiscal space to manage the recovery and to promote the recovery. And clearly, although this was a symmetric shock, member states entered the shock in different positions in terms of their fiscal capacities. Not just measured in terms of budget deficits and GDP ratios, but just the size of the state, sophistication of the state, the links of the state to the rest of the economy. So it is clear that some member states will have a greater capacity to publicly promote recovery than others. And that could lead, as I said, to friction within an unknown level playing field in the single market. And so the discussion of a collective response through the Eurogroup, but also through what the commission has been asked to do, is to some extent, to address those differences and make sure that those divergence are limited to an extent where they don't interfere with the functioning of a single market in a sort of durable way. Thank you. A question from Uno Dwyer asks, you probably want to speculate about this, but she asks, what's the probability? What are the chances of a significant increase in the EU budget from 1% of GNI of gross national income? And where were the resources? So she's interested on the tax side. Where do you think is the most likely area for increased resources if there is a decision on a significantly bigger EU budget, wherever they come from? I mean, I really would prefer not to speculate because interesting enough, the closer you get to the final point, the less you can talk about these things. But I think, you know, there will, I mean, if you're talking about a capacity, the capacity of the budget will have to be greater. The financing, I think you've already seen discussions about how it will be financed. I think it will not imply taxation, it would imply issuance. But all of this, as I said, is extremely fresh. We have been asked to think about it. We are thinking about it. We're trying to come up with design options, but really I'm not in a position to say too much about it now today. Okay, good. I'll lose you some. Yeah, no, that's understandable, but we've got to ask the questions anyway. EIB is the European Investment Bank, has been raised by Patrick Honen, former governor of the central bank of Ireland and Paul O'Brien. Not sure you mentioned the EIB. Any? I mentioned, yeah, I mean, they are part. I mentioned them explicitly in terms of what we have done in the last year, but maybe the eight billion available to the EIS, in fact, so the EIBG group, for them to use to online to SMEs. But of course, if you look at the Eurogroup report, you'll see the EIB also has a part to play in terms of a large guarantee program, again, mainly targeted towards helping SMEs get through the, first of all, the confinement phase and then also onward to recovery. So the EIB will be playing an important part in this. And I suppose both of those people who raised it in the context that if some countries decide to give their businesses bigger support, that will clearly have an impact on the level playing field across the single market. And for that reason, it would one go so far as to advocate that all business supports go via a European level, whether it's EIB or elsewhere, to ensure as much as possible that some countries can't seek to gain a competitive advantage. I think in a very pure world, that might be the way to go, but of course, that's not how it's happening. And I think, as I said at the beginning, that the response to the crisis is a bit a combination of European level and national level activity. And in that, in a sense, that's appropriate because a lot of things can be better done at national level than they can be done at European level. It is often better to be close to those receiving the aid than to be far away. So what we're thinking in the European response is not that we would replace national response, but that we would sort of equilibrate the differences between the different capacities for responding at the domestic levels. So in a very idealistic position, you might say, put everything to the European budget and they'll equalize it all. But I mean, that's simply not the way it's going to happen. What will happen is that there will be national responses and then the differences between those national responses will be somehow equilibrated using the EU level. So Peter Gunning, another member of the Institute, raises an issue, a related issue, the tourism sector. It's clearly going to be one of the most affected of all the sectors. State supports, he raises it specifically in the context of Southern European countries. Many of the Southern European countries are particularly reliant on tourism and therefore will be affected most. Widening the question out, do you have thoughts on which sectors may not, maybe that if the resources are limited, some sectors may be first in line for state aid to get them through this. Alternatively, are we looking at a tourism sector that is just going to downsize and therefore difficult decisions have to be made about limiting support to the tourism sector? Is that something that you've given consideration to? Well, I think a lot of people are thinking about this. We are, I mean, we have been asked, as you know, to do a needs assessment as well. I simply ask for a large amount of money. We have to expect where the need will be. So in that context, you have to look at not just the macro but also how those needs will stack up across sectors. This is also something which, by the way, is underway in the private sector. If you speak to private sector participants, they're also trying to work out, as I said, I mentioned a little bit in my remarks. They're trying to identify those sectors which will have different experiences of the crisis. So you'll have various types. So you'll have those that you take an immediate conjuncture on the hit. So you might take the restaurant sector, for example, but could be expected to rebound so long as normally, you know, when situation normalizes. There will be losses along the way, but the sector as a whole is not going to be structurally changed. People are still going to, when we get back to normal, are still going to want to eat out, are still going to want to have evenings and restaurants. Other sectors will not be softened at all. Think of that in initiatives, for example, if you can do it, they may look good. Then there are sectors where, you know, it has been brought to my attention commercial real estate, for example, where you may see structural changes because people have learned to work remotely and we may change their entire working patterns. I know in the commission where we're also thinking of the lessons we're going to draw from what has been an enforced experience of remote working, but actually it has been a not inefficient experience of remote working. So you can see other sectors. Aviation is a sector which will rebound, but the question is, will it rebound in the same way as it did before? So you have to sort of build different scenarios for different sectors. And tourism is one of those sectors which I think will have a big conjunctural impact because it's quite likely that tourism will be badly affected in the short term. But again, I would imagine that as soon as things get back to normal, people will want to again, you know, along the line will want to again to start traveling and go back to, I don't see, and this isn't my personal view, this is a structural change. I think people will want to go back to travel. Of course, it may be more expensive, but I still think tourism will recover, but of course it may take a hit in the short term. Yes. And then when you put all that together, then you'll have to decide from a sort of public policy point of view which of the sectors which are most strategically important in terms of systems, and then try of course to see also those sectors in which the market will come back. Because the market, as I said, will want to reinvest, and it'll be also looking at those sectors, trying to identify the ones that are most profitable going forward. And I think there is a need, not for a tight coordination, but certainly for some in a sort of game theoretical way, it'll be very important for the private sector to know what the public sector is thinking and what the public sector to know what the private sector is thinking as we go forward, if we're to optimize this recovery. And just to follow up on that, as you survey across the member states the extent of government support for business, how big a range of difference do you find there? And just, it seems here in Ireland because of our experience of guaranteeing the banks 12 years ago, that there's a greater reluctance here to give business supports because of the bad experience around that. Just interesting if you have a general view of the surveying across the 27 or the age in Ireland in particular. Yeah, it does differ. In two to X, one in two different sides, some countries have put on the table more in terms of the amount of public support. Another member states have put on as something needs to come about it. What is interesting is that if you take the differences in approach, so for example, the use of state guarantees or the use of legislative moratorium, what has been interesting is that when we introduced these things into the regulatory framework and we thought, how are they going to be treated? The interesting thing is that the regulatory treatment of a moratorium, for example, whether it's public or it's private, is determined not so much whether it's public or private, but whether it's sector-wide. So even though some member states have decided to have state-legislated moratorium, and others have just encouraged the banks to engage in their own private moratorium, so long as they're sector-wide, their treatment is the same. Similarly with public guarantees, the treatment of expected losses brought in the same under the regulation. So there have been different approaches. There have been different scales. They are big in some cases, but that reflects, and it isn't the sort of one-to-one sort of countries who have weak fiscal positions are not doing it, and those with strong fiscal positions are. The Netherlands, for example, has not used state guarantees, has not used state-legislated moratorium, but is fiscally very strong. So it has really been a choice among member states, I guess, reflecting what they think works for them, and the treatment in the regulatory framework has been brought in the same. Two sort of similar type questions, one from Kieran Spelan and another from Angela Black, in terms of citizens' expectations of what the EU can do and whether it may be perceived as too sexual-focused rather than citizen-focused. Do you have any thoughts on how this could be perceived, that there could be an over-embrace, and which I think has already happened in some countries, that there has been an expectation that the EU would do more than it could possibly do, given that health and welfare are the main levers so far, and they're at a national level rather than EU level? Well, I mean, this is an excuse for me to moment a bit, but I do see times the EU is held to higher standards than is justifiable, a lot of things. I will come back to your questions on citizenship, but I mean, if you think about, you know, the sort of criticism that has been made of the lack of coordination in Europe, if you look then across to the United States or even if you look at the United Kingdom where you have different behavior at the bone levels of government, these are much tighter unions than us. I think all of these more federalized structures, perhaps with the exception of Germany, have had their difficulties in managing the process in a coordinated way. I also think, I often think the EU is held to, you know, a really much higher standard than, and perhaps is justifiable. Similarly here, in terms of the citizens, I mean, this is a fair point. I think the idea in looking sexually will not be to look at the industry, but will be to look at things like employment, for example. And I guess employment is important to the citizens. So the idea will be to have a recovery which is as job-rich as possible. I think although the focus may be on identifying those sectors that can deliver the jobs, the ultimate benefit will be to the job holder and therefore to the citizens. So I think, you know, there's no inconsistency in looking at sectors and having a citizen-based approach. It's not for me anyway. Okay, Michael Tutty, again, a member of the Institute, wonders whether the stability pact is effectively suspended for good or what sort of timeframe do you see? No, it's not suspended for good. And as you know, there's always been this general escape clause inside the pact. It's been there for quite some time since the last crisis. We did not trigger it in the last crisis. But this time it was considered, the shock was considered of such a scale and such a sort of generalized nature that it was justified to use it. Similarly, we have suspended a lot of the state aid rules in the forms of temporary framework. But the understanding of the member states in doing that, because as you can imagine, some member states had some reluctance around exactly the point Michael raises. But if we do it, can we get it back? But the understanding is that it will come back. And that even though we have this general escape clause, it's all the other parts, all the other parts of the SGP will continue to apply. We'll continue to go through the procedures. We'll continue to use all the instruments, the country-specific reports, the EU semester, et cetera, to still manage the public finances. All that we have done essentially is we have removed this one. What will it become? I think artificial constraints because the member states are being forced even to the ordinary stabilizers through some of these numbers, pro temp. But I wouldn't argue strongly that the SGP is not gone though. Okay. One from Pat Laudner from the funds industry, investors balance considerations of risk-returnal liquidity in the expectation of a persistent low interest rate environment and higher risks. How do you see the commission's role in the process of encouraging investors to get off the sidelines? Well, we have an experience in this. We already have some instruments like the investee, EU, et cetera, where we have worked with the private sector to help to de-risk certain sectors. So you can see this will essentially be the sort of logic which is to use the public money in a way that also encourages the private sector to come in. Absolutely right that the environment will be difficult for investors in the immediate post-crisis phase. It's also right to say that the amount of public money will not be unlimited. So I think it's very important that there is a sort of strategy which both the private sector and the public sector understand that strategy. And in that way through a sort of coordinated game or I don't use it with coordinated because it goes further than I mean. But by having dialogue and by understanding each other's concerns, I would hope that the public and private sector could work together sort of pull the economy out of the crisis and into recovery. And that's why, as I said that the vice president Don Broschus announced yesterday that he would want to have some dialogue with the industry just to understand their concerns and that they could understand ours as well. Okay. But I fully agree it's not going to be a great investment environment post-crisis and there will be a need for some jurisdiction. Okay. Kieran McGovern asks in a personal capacity about airlines and whether they may become like banks in the past, different regulatory requirements and hold different levels of capital. She puts, is that a possibility for the future of the airline industry? We, I won't speculate now. I mean, we have to see what happens. I'm not an expert in the airline industry. I would say I'm on the financial side. Clearly it's an industry which is being extremely happy now. And I think it's one of those industries where it's difficult to predict with accuracy the balance between what is a conjunctural effect and what is a structural effect. Sure. I mean, certainly if you ask people today, they will tell you they intend to travel less. But I am not sure in a year or two is time if you ask the same question, people will answer the same way. So this is one of the uncertainties and this is an uncertainty which exists for lots of seconds. Sulanya Maitra asks about the EU budget for research funding, research development and also the international aid budget. How do you think this is going to impact both of those? I think they are both priorities which will be a certain, the commission will want to preserve both of them. Research and development, obviously as I said, it fits into the EU priorities. We have argued all along that before COVID that the EU needed to become much more present in this field of top technology. It's a field where we're falling behind in fact when you compare to the United States or Asia. So that has to remain a priority and cannot be, in our view, cannot be somehow parked for four or five years while we focus on something else. So we have to keep that. And as for aid to our third country, so one of the interesting things about this is that the EU has increased its aid and has refocused its aid to its neighbouring countries and to the third world, emerging markets, et cetera, simply because we understand that you cannot solve the COVID crisis in Europe alone not in the United States and Europe. The only solution to the COVID crisis has to be global and in many other countries outside of Europe are in even much less favourable position, have much less capacity to address it than even we have in Europe. So again, this focus on helping our neighbours, helping the third countries remains very high. We've got another one from Peter McGuigan of the Banking and Payments Federation. He says, given the real prospect that EU banks will increase non-performing loans after payment moratoriums and the impact this could have on capital and interest rate perspective, would the commission be open to exploring, adopting a contemporary framework to deal with these MPLs? I think we'll have to see how the world evolves. I think we are conscious that there will be an increase in MPLs. I mean, some of those MPLs will have been, in some member states, will be covered by guarantees and will only be taken care of, but in other places, and even in those countries, there will be an increase in MPLs. And we are conscious of that. We have in the past worked on strategies for managing MPLs, as you know. Some of them were recently leaked in newspapers. But we will have to face that a little bit down the line. I think we are not yet in a point where we're working out how we're going to handle. And until we see what the extent of the problem is, then we will wait to discuss strategies there, I think. Okay, the drilling has started on the other side of the wall in my neighbour. So sorry if the noise comes through, I'll mute myself most of the time. Tom Ferris and Brian Daley of KPMG both asked about Brexit and whether or not we're faced with a double whammy or a second whammy at the end of the year, beginning of next year. Well, I think there, I could only refer you to public statements. I think the UK side has made it clear they don't want to deviate from the end of the year deadline for the kind of formal end of the transition period. So we can only operate within that. These negotiations, as you know, are continuing. They're continuing in remote form. So Mr. Barnier and Mr. Frost are continuing to have negotiations at the second round last week. You will have heard Mr. Barnier's comments after that. I think, yes, I am not one of those people who believes that's because we have this interruption now in the functioning of the single market that somehow that's going to make hard Brexit easier to accept. I don't think anybody really wants to accept the current situation as a permanent state of being. So we do want to get back to something that is more normal, that involves more cross-border activity both in terms of goods and services and people. So I think, yes, a cliff edge or another serious hard Brexit at the end of this year probably will come at a time that is not ideal. But as I said, I can only refer you to the public statements and the UK style, they show the general indication of wanting to move away from the end of the year as their date for any transition. Okay, and again, kind of one like for myself, I could, the word strategic autonomy have been used quite a bit recently. Those, some of the countries using that term have tended to have more protectionism use anyway in historically. Is there a risk that Europe will become more protectionist as a result of this, perhaps justifiably in some areas? I think we have to be careful of terminology and I fully agree with you that there's a clear risk of overstepping the mark of strategic autonomy and going to something that is very different. But I think this discussion of strategic autonomy is something that's going to take place all around the world. It will not just be a European conversation you hear already in the United States. I think there will be certain value chains which may well be declared strategic, which were not declared strategic before. And it will not be that the European would close its borders but may seek to have more control or more of the value chain or more of the supply within its own boundaries. And you can even imagine what I'm talking about in terms of medical equipment, et cetera. So this, that's a conversation which I think, again, this is the story of Europe being held to higher standards because of course Europe is a free trading, most open trade region in the world within the European Union and there is a concern that we certainly become less open. But I said, this is not a conversation to just take place in Europe. This is a conversation which I think all countries, all over the world are going to think about that if you are reliant, very reliant on an external supply of a strategically important product as we've just seen, this can leave you extremely vulnerable. And so you may need to think of a re-balancing of that but that's a very different conversation than saying you are moving to a protectionist stance. Because I think it'll only be in those areas where you can justify such a strategic discussion that that will happen. But again, as I said, it's a conversation which will be worldwide and not just in Europe. Angela Muni asks around digital finance, maybe the FinTech, do you think this would accelerate changes in financial services, delivery of financial services? I hope so. I mean, we have been a strong supporter of digital finance. As you know, it's one of the priorities of my own DG and of the Vice President Don Groskis. So we would hope yes. I think it's quite likely yes. In fact, I think in general, remote living has been demonstrated to be as I said, efficient. And many of the sort of, I wouldn't even say taboos, but much of the inertia which existed around the shift from field to remote and digital finance have been removed. So it's not about taboos, it's more just about inertia. I think many people now who simply haven't thought about digital finance as the way forward will think about digital finance as the way forward. And I think that is a big change. And I think it's in the right direction and we will certainly encourage it. And a final one. Do you have any thoughts on suspending dividend payments? No, it was clear. We were, let's go back to the strategy. The strategy was to create capacity in banks to onlend to the real economy. So we gave the banks additional liquidity. We created space in their balance sheet by the supervisors, by relaxing some of the capital requirements. We gave them operational relief, the union regulatory relief. And the idea was that they would use all their available capital above their regulatory requirements to onlend to the economy. I think we felt it was not appropriate at that time that they would take a large block of that. We were talking about a lot of billions of euro of capital and distribute them out of the system, which would, of course, reduce their capacity to onlend. So it was not that we, and we didn't ban it. We simply recommended they shouldn't do it. We didn't recommend they will never pay these dividends. Of course, we're delaying the payment dividends. But we thought it was appropriate that the bank should retain that capital and use it to maintain their capacity to the end, to the economy as part of what is a sort of mutually beneficial strategy for everybody concerned, including the unfortunate people who didn't get their dividends. Okay, so many thanks to you, Sean, for taking the time and joining us and sharing so many thoughts on such a broad range of issues. I think it was very useful. Just before wrapping up, we'd like to say that at this day next week, Phil Hogan, the commissioner for trade will be doing a webinar with us similar format. And that is also free, open to all commerce members and non-members. We've arranged a lot of events going on, exclusively for members as members who are watching now will know. So with that, thank you for attending. And above all, thanks to Sean for giving us his time and thoughts this afternoon. Thank you.