>> businesses in our city and state and country are not going to return from this. >> there are so many people out of work. >> the important thing is we are starting a new economic cycle right now. >> i worry markets are getting ahead of the politics. >> you have a complete lack of coordination. >> it is not that we will grow in 2021. it is, will it be enough? >> this is "bloomberg surveillance." tom: jonathan ferro, lisa abramowicz and tom keene on bloomberg television and

bloomberg radio worldwide. there are 14 stories this morning. they all matter but there is nothing that would matter like the press conference of christine lagarde we will see here after another extension of the great ecb experiment. if we bounce back into the equity market, bounce back into the american economy and chairman powell's policy as well. john, what would you listen to at this presser? jonathan: they want to manage the message around duration. we have to keep financial conditions easy for a lot longer. they are looking to put monetary policy on autopilot the with the federal reserve has. they are doing it on the asset purchase program. probably already done it on rates and they need to do it on the asset purchase program in the coming meetings. that is the perspective when you going into this news conference. not about making conditions easier. it is about keeping them easy for a lot longer. that is the commitment to march

22. tom: pre-google, i went back in the stacks. i think eisenhower was president. i researched the phrase "pushing on a string." it comes out of the 1930's and congressional testimony. what kind of string is christine lagarde, mr. bailey at the bank of england, and powell, what string are they pushing on right now? jonathan: let's be clear. they are all pushing on a string. they can't do much more than they already are doing. what happens if they don't do this? if they allow financial conditions to tighten? that is what they are worried about. they can't achieve more. they can only keep things as they are, which is what today's move was about. keeping things as they are. the additional change has got to come from the physical channel, channel,fis -- fiscal not policy making. tom: vix is nothing.

euro barely moved. we will talk american equities right now. lisa, i want to go to you on pushing on a string. things priced to perfection. the spanish paper priced to perfection. portugal priced to perfection. the credit and high-yield yield markets completely priced to a bizarre perfection. lisa: let's draw a distinction. spain and portugal are not necessarily treated as credit the ecb is buying. when you look at credit, how long can central banks globally push on the string? how long can they keep things where they are before you either -- zombie fixation zombification of the world? people don't want to lend insolvent companies. tom: i want to talk about the ipo market.

it is not something we want to spend a lot of time. timmy, -- to me, it is almost manipulated in the category of capitalization of these tech companies. what is your take on things priced to the moon where the evaluation is a gazillion dollars? jonathan: everyone is struggling to read the market. bringing the companies to market, struggling to read the market. the banks are bringing ipo's together and struggling to read the market. that is my take away. es that. understats priced at just under $100. where did we get to? north of $180. that's the gap right now between where a company thinks it is worth, for the bankers think they should bring it to market without taking everything off the table, leaving just a little on there. that turns out to be an 80% pop.

tom: i don't want to go all stewart on people. i'm looking at the wacc screen. debt,uity, 6% long-term and a preferred multi-convertible stuff that is 61% of the company. these are not ipo's we grew up with. they have invented a new beast and technology. with us now, lisa erickson with u.s. bank wealth management. she is qualified to speak about the disparity between traditional conservative investment in the 10,000 shares of doordash she took down. are these new ipo's legitimate investments? lisa e.: i think what you are it hasis a market where been conducive to fundraising. there is optimism about recovery. the work from home stories

that helped propel the market, particularly earlier in the year. optimismly a story of around reopening and recovery, as well as investor sentiment being able to look forward into 2021 and 2022. lisa: would you buy these ipo's? lisa e.: in general, we are glass half-full on the u.s. equity markets. we recommend a more diversified approach to equity investment. focus particularly here in the u.s. a little less on the international markets. generally what we are advising clients is to stay the course and be able to pick up some of that economic recovery that is likely coming with reopening. jonathan: why is the glass 50% of the? -- empty? the pointersall, point to some potentially good numbers in 2021 on both the macro and corporate basis.

there are some risks. one of the key risks is the gap between full reopening with vaccines being able to do that and the current situation where we have a high number of unemployed and businesses that continue to struggle. being able to bridge the gap in terms of continuing stimulus to reach those most affected by the pandemic is key. now,ther key risk we see to your point on sentiment, is around the priced perfection nature of the market. focus on therally optimism from the vaccine. on the other hand -- not pricing some of the risk that may be around that. tom: i want to get in front of your 2020 when i look. what to do with big tech? u.s. bank has been great about that. do you lighten up on technology on an absolute basis, diversify away from it?

four keep owning technology as you try to find how to you did in 2020 and 2021 -- in 2021? lisa e.: it depends on the time horizon. over the long term we considered some of these secular growth stories like tech as some of the most attractive. depending on if you are focused more on some of those long-term horizons, we believe that is one of the most interesting stories out there. i agree and the near term there is some risk to the tech sector. there is obviously some of the antitrust issues coming up, valuations are low more stretched. lisa: what was the biggest debate at your lookahead meeting for the staff at u.s. bank? lisa e.: i think the biggest debate is really, again, the timing of when to take more risk on physician with respect to equities -- position with respect equities. we are not fully bullish. we do have risk in terms of

current valuations and sentiment. if you look at a lot of the technical indicators, we certainly had a run. if you look at the raw price-performance of the s&p. obviously some really good numbers. that is probably one of the key risks. jonathan: great to get you on the show. thank for your perspective, lisa erickson, u.s. bank wealth management. instagram. $750 million back in 2012. tom: thank you for bringing this up. jonathan: yesterday they were accused of being anticompetitive. i look back on the last decade. away from this case, when you think about one of the best deals made in the last 10 years, i've got to say $750 million for instagram. what a deal. tom: sarah frier has her fabulous book of the year with the mckinsey award on instagram. we will use her as her resource.

i had the clearest memory across the bloomberg terminal of a single quiet headlight on an afternoon. doj drops case against microsoft. i have read a lot of good opinions both ways on this. what i don't understand is how you apply traditional american monopoly theory to the network externalities of this modern corporation. they have to make up a whole new body of law if they prosecute this. jonathan: what is the abramowitz take? lisa: this is a very different case. facebookevidence at that they knew the threat of instagram and whatsapp. they said if we do not buy this, it could be a game changer and a business killer. the question i have is, why was the deal approved? they couldact that have had the information at the time, can they go back and undo

some things that frankly doesn't like it was anticompetitive and it's was it way? tom: if you technologies by sikorsky, the helicopter we use once or twice a week, if you tx buys sikorsky, is that a bad thing? is it a judicial issue? jonathan: what's amazing about this, and we covered this at the time, the $22 billion for whatsapp, $750 million for instagram. i remember those mornings. people were turning around and saying these numbers are ridiculous. fire they paying so much for these companies? to lisa's point, bear in mind most people in the last decade have watched those deals get executed and integrated into facebook. they called mark zuckerberg genius at the time. they are not saying the things they are saying now. lisa: i want to add the fact that mark zuckerberg saw these companies, new the potential, and they could not say no

because he would cross their business. jonathan: i get it. i am not here to defend mark zuckerberg. he would have to pay me a lot of money to make it happen. lisa: how much? tournament away from a news conference in frankfurt. the ecb, an extra 500 billion euros of qe. this is bloomberg. ♪ karina: president trump's campaign has asked to join a texas lawsuit challenging the resident's election defeat. 17 other states have filed in support of the case that has been called a publicity stunt. texas is trying to prevent electors from four swing states from taking part in the electoral college vote. business priced his long-awaited ipo above market range to raise $3.5 billion. airbnb has a market value of

about $47 billion. shares begin trading today. companies have raised a record $163 billion on u.s. exchanges. coming up on bloomberg markets, airbnb's ceo and cofounder at 10:00 a.m. in new york, 3:00 p.m. in london. thead sciences will buy maker of a drug in europe despite a rare form of hepatitis. they will pay $1.4 billion for nyr. hepatitis drug could be submitted to u.s. regulators in the second half of the year. elon musk is looking at the fireballde of spacex's in texas. everything in the seven minute flight went smoothly onto the landing. pressure in the fuel tank was too low, causing the landing speed to be far too high. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

i am karina mitchell. this is bloomberg. ♪

>> maybe we did this to quickly. they need to understand the

speed is really a reflection of the extraordinary scientific advances that have been made at that allowed us to do things in weeks to months that normally would have taken several years. that was not compromising safety, nor compromising scientific integrity. the process that went into deciding -- designing the safety and efficacy was independent and transparent. jonathan: that was dr. anthony felt he from the third annual bloomberg health conference, yesterday. hopefully we might get positive news on the fda on the pfizer vaccine later today. from new york and london, good morning to all of you alongside tom keene and lisa braun of its -- lisa abramowicz. i am jonathan ferro. we are minutes away from a press conference in frankfurt. equity futures just doing a little soft much of this morning. down about eight points on the s&p. euro back through 121.

121.08. i treasury market giving up some of the gains of this morning. yields down a couple of basis points. now down just one. 500he ecb does as expected, billion euro increase to the package and the duration extended into march of 2022. tom: i agree but is nevertheless to see the headlines on the screen is always a shock, even if you know they are coming. we will digress to this horrific pandemic. lawrence gostin is one of the nation's true expert in public health law. he's at georgetown and is definitive. ask if we lostto it. we all know in individual story, an individual recovery. mayor giuliani leaving the hospital yesterday. a tragic single death. then we tried to encompass 3000 people in one day. how do you keep perspective in

this pandemic? lawrence: what a great question. it is hard. and thinktep back this little microscopic organism that a matter of weeks and months and now into a year has literally taken over our lives. so many celebrations without that special person in the chair next to you. it's glazed over by the numbers but you are right. every single death means somebodys'dear loved one. -- somebody's dear loved one. it is massively tracgic. maybe it is the beginning of the end with the light o at the end of the tunnel with the vaccines. tom: let's start with power. what is the power you request from the biden administration? lawrence: i think the biden

administration first of all have to have the power of the purse. they will need congress to get a lot of funding. they will need funding, not just a recovery and getting people back to work. small businesses back up and running. they also need state and local health departments. they also need it for vaccine campaigns because a lot of americans don't trust this vaccine. we have got to overcome that and get enough people. we have to get the jabs in people's arms because having a good vaccine isn't enough. we have to get it to 70% of the population. that will be a hard task. lisa: power, duty, restraint. what is the duty to vaccinate individuals after you get the first responders and residents at nursing homes? who is next?

how should this best be rolled out? lawrence: that's the big question right now. domy view, what we need to is prioritize the most disadvantaged. that also has a good public health impact. there are communities in this country, black americans, and indian americans and others with four times as many cases and deaths and hospitalizations has anyone else. whoing the vaccine to them, tend to distrust the vaccine a lot more than others, will be very, very important. not just for equity, but actually to kind of target the vaccine exactly where the illness and deaths are occurring. that will be really important. we have got to ramp up production using the defense production act. that's another duty. not sure the supplies are

as scarce as they look like they are going to be. lisa: let's go to restraint. there's a question about employers and what they do in terms of mandating their employees get vaccinated in order to come back to work. what is the law on that? how did they deal with that aspect as they try to create a work yet effective workplace? lawrence: the eoc has not weighed in on this yet. from what we know, they said with the flu vaccine that employers can mandate it. many hospitals, nursing homes, work races, universities do. i do not see any reason why they wouldn't able to do it for the covid-19 vaccine. i think it is ethical. to take aentitled risk with their own health. employers are there to make sure their customers are safe, their employees are safe. i think at least having a

covid-19 vaccine program at the workplace, offering it to every employee at the minimum is the ethical responsibility to keep everyone safe because that is their job. jonathan: just before we let you go, an important question people have been asking the last few weeks. if we can vaccinate the most at risk in society, is there any reason to maintain the restrictions introduced in countries like the united kingdom, the united states, europe and elsewhere? lawrence: you mean the restrictions in terms of who can get the vaccine are the restrictions -- jonathan: social distancing, professor. lawrence: that's a question i get asked all the time. for now, i think when the vaccine rolls out we will continue to have to mask up and social distancing. no question about it. there will be a large reservoir of infection in the united

states and the u.k. and other places. what we need to do is wait until we're sure we virtually in theted sars covid 2 united states or britain or whatever it is -- wherever it is. that will not probably happen until late summer or even into the fall. jonathan: wow. we appreciate your time, sir. from georgetown university. that is the big debate. we just vaccinate the most at risk in the remove restrictions, or achieve what the professor is talking about witches herd immunity? tom: my answer is to talk to adults. i want to make clear our team has been leading on this. starting with the people at johns hopkins, over in london at imperial, people like professor gostin. the lights out to clarity they have brought. jonathan: the pressure is on the

politicians to remove those restrictions. once the most at risk of been vaccinated. it will be immense. from new york and london, for our audience worldwide, and ecb news conference right around the corner and jobless claims in am are you frustrated with your weight and health? it's time for aerotrainer, a more effective total body fitness solution. (announcer) aerotrainer's ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time, all while maintaining safe, correct form and allows for over 20 exercises. do the aerotrainer super crunch. the pre-stretch works your abs even harder, engaging the entire core. then it's the back extension, super rock, and lower back traction stretch to take the pressure off your spine and stretch muscles. planks are the ultimate total body exercise. build your upper body with pushups. work your lower body with the aerosquat. the aerotrainer is tested to support over 500 pounds.

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jonathan: from new york and london for our audience worldwide, good morning. as we await the news conference, the ecb president speaking in just a moment, let us get to the meeting. this is 725 with a number and here is michael. michael: it is as expected, a big jump given the lockdowns, 800 53,000 for the last week for initial jobless claims, much higher than 712, thousand initially reported. as -- and thatot has been revised up. a huge change this week. additional 127,000 jobless claims. when we look at the overall people receiving some kind of benefit at has fallen to

19,043,000, that is good news and that was two weeks ago so that could move up again even the fact that more people are losing their jobs. the other indicator that everyone is watching, and i know is starting.agarde cpi higher than what was forecast by economists. .2% and rate goes up leaves year-over-year cpi up 1.2 percent, no change from last month, and the core rate is at 1.6 percent, no change from last month. inflation not expected to make a lot of moves in the recent months because of the fact we are coming out of the pandemic and we have a lot of the comparisons that are higher. but we will see inflation start to move higher when we get into 2021 is the general idea. lisa: thank you so much.

we want to get over to what is going on with ecd -- ecb president lagarde. what are you looking for with his press conference? jonathan: she is about to unveil projections and germany and that is what everyone will be looking for. it is uncomfortable to see claims moving in the wrong direction. she is planning 500 billion euros of pandemic purchase program and extending that to march 2022. let us pause over to germany and catch up with the ecb president. tos. legarde: we expect them remain at present or lower levels until we have seen the inflation outlook convert to levels sufficiently close to but below 2% within our projection and such convergence has been consistently reflected in underlying reflation dynamic. second, we have decided to increase the envelope of the pandemic emergency purchase

eurosms by 500 billion bringing it to a total of 1000 850 billion euros. -- 1000 850 billion euros. we expanded the horizon to at of march, 2022. in any case we will conduct net purchases until the governing council determines that the crisis is over. we will conduct our purchases under the epp to preserve favorable financing conditions over this extended period. flexibly,rchase according to market conditions, and with a view to prevent a tightening of financing can -- conditions that are inconsistent with countering the downward

impact of the pandemic on the projected path of inflation. in addition, the flexibility of purchases over time across asset classes, and among jurisdictions will continue to support the smooth transmission of monetary policy. if favorable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon, the envelope need not be used in full. equally, the envelope can be recalibrated if required to maintain fine -- favorable financing conditions to cancel the negative pandemic shock to the path of inflation. purchasesion of our over a longer horizon reflects the prolonged fallout from the pandemic for the economy and inflation.

it allows for a continuous market presence and more durable support from our monetary stimulus. preserving favorable financing conditions over the pandemic to reducell help uncertainty and bolster confidence, thereby encouraging consumer spending, and business investment, and ultimately underpinning economic recovery, and helping to offset the downward impact of the pandemic on the projected path of inflation. expand theided to reinvestment of principal payments from maturing securities purchased under epp until the end of 2023. in any case the future rollout of the portfolio will be managed to avoid interference with the appropriate monetary policy staff. --rd, for governing governing council decided to

further recalibrate the conditions of the third series of targeted longer-term refinancing calibrations. specifically, we decided to expand the period over which considerably more favorable terms will apply by 12 months until june 2022. conduct three additional operations between june and december 2021. moreover, we decided to raise the total amount that counterparties will be entitled to borrow in three operations from 50% to 55% of their stock of illegible loans. in order to provide an incentive for banks to sustain the current level of lending, the recalibrated borrowing conditions will be made banks thatnly to

achieve a new lending performance target, the extension of the pandemic rated low interest period, and the addition of more operations, and increase of demand that can be borrowed will preserve the attractive funding conditions for banks. this will help to ensure that they can continue to offer favorable lending conditions and have ample liquidity to expand loans to households and firms. expand to decided to until june 2022 the set of collateral easing measures adopted by the council on the seventh and 22nd of april, 2020. the extension will continue to ensure that banks can make full use of the euro system's

liquidity of operations, notably the recalibrated system. the governing council will reassess the collateral easing measures before june 2022, ensuring that euro system's operations is not adversely affected. fifth, the governing council decided to offer four additional longer-term refinancing operations in 2021, which will continue to provide an effective liquidity backstop. and asset purchases purchase program will continue at a monthly pace of 20 billion euros. we continue to expect monthly net purchases under the app to run for as long as necessary,

and reinforce the economic impact of our policy rates and to end shortly before we start raising decay -- the key interest rates. we also intend to continue reinvesting in full the principal payments from maturing securities purchased under the app for an extended period of time past the date when we start raising the key ecb interest rates. in any case, as long as necessary to maintain favorable liquidity conditions and an ample degree of monetary accommodation. system repo euro facility for central banks, europe, and all temporary swap and repo lines with non-euro area central banks will be extended until march 2022. finally, we decided to continue conduct our regular lending

operations as standard procedures at the prevailing conditions for as long as necessary. releases with further details of the measures taken by the governing council will be published this afternoon at 3:30. the monetary policy measures taken today will contribute to preserving favorable financing conditions over the pandemic thereby supporting the flow of credit to all sectors of the economy, and underpinning economic activity, and safeguarding medium-term price stability. time, uncertainty remains high, including with regard to the dynamics of the pandemic, and the timing of vaccine rollouts. we will also continue to monitor developments in the exchange to their regard

possible implications for the medium-term inflation outlook. continue to stand ready to adjust all of our instruments as appropriate to ensure that inflation moves forward and towards our aim in a sustained manner with our commitment to symmetry. -- in line with our commitment to symmetry. assessmentain our starting with the economic analysis. inlowing a sharp contraction the first half of 2020, euro area real gdp rebounded strongly 12.5% quarter on quarter in the third quarter. , remaining well below pre-pandemic levels. the second wave of the pandemic,

and the associated intensification of containment observed in mid october are expected to result in a renewed significant decline in activity in the fourth quarter and to a much lesser extent, then observed in the second quarter of this year. developments continue to be uneven across sectors with activity and the services sector being more adversely affected by the new restrictions on social interaction and mobility than activity in the industrial sector. measuresfiscal policy are supporting households and cautiousnsumers remain in the light of the pandemic, and its ramification for unemployment and earnings. weaker balance sheets and uncertainty about the economic outlook are weighing on

business investment. the news ofd, prospective rollouts of vaccines allows for greater confidence in the assumption of a gradual resolution of the health crisis. time,r, it will take until widespread immunity is achieved while further resurgence is in infections with challenges to public health and economic prospects cannot be ruled out. medium-term, the recovery of the euro area economic -- economy should be supported by favorable financing conditions, and an expansionary fiscal stance and a recovery in demand as containment measures are lifted and uncertainty recedes. this assessment is broadly reflected in the baseline scenario of the december 2020 euro system staff macroeconomic

projections for the euro area. these projections for c annual real -- forsee annual real gdp 3.9% int -7.3%, plus 2020 one, plus 4.2% in 2022, and plus four point 1% in 2023. compared with the september 2020 projections, the outlook for economic activity has been revised down in the short-term, but has seen to have been broadly recovered to the level projected in the september baseline scenario over the medium-term. overall, the risks surrounding the euro area growth outlook remain tilted to the downside, but have become less pronounced.

while the news about the prospects, for abaxis -- for the prospects of a vaccine rollouts are encouraging, downside risks remain related to the implication of the pandemic for financial conditions. according to eurostat's estimates, the euro area annual inflation remained unchanged at inative .3% -- -.3% november. on the basis of oil price dynamics and taking into account the temporary reduction in the german vat rate. likely to remain negative until early 2021. thereafter, it is expected to increase going to the end of the temporary vat reduction in germany, and upward base effect and emmett -- in energy price inflation.

at the same time, underlying price pressures are expected to remain subdued owing to weak demand notably in the tourism and travel related sectors as well as low-wage pressures and the appreciation of the euro exchange rate. once the impact of the pandemic fades, a recovery in demand accommodative fiscal and monetary policies will put upward pressure on inflation over the medium-term. market-based indicators and survey-based measures offer longer-term inflation expectations remaining at low levels. this assessment is broadly reflected in the baseline scenario of the december 2020 euro system staff macroeconomic projections for the euro area, which receives annual inflation in 2021, 1.120, 1%

percent in 2022, and 1.4 to -- 1.4% in 2023. compared with september 2020, the outlook for inflation has been revised down for 2020 and 2022. moving onto the monetary analysis, the annual growth of broad money remained broadly octoberd at 10.5% in 2020. money growth has been supported by the ongoing asset purchases by the euro system which has become the largest source of money creation. in the context of a still heightened preference for liquidity in the money holding

sector, and a low opportunity cost of holding the most liquid forms of money, the narrow monetary aggregate continues to be the main contributor to broad money growth. the growth of lending to the private sector has plateaued while still recording higher growth rates prior to covid-19 pandemic. following strong increases in the early months of the pandemic, the annual growth rate of loans to nonfinancial corporations fell to 6.8% in october after 7.1% in september. ins deceleration occurred the context of abating emergency investmenteeds, weak and tighter credit conditions on loans to firms as signaled by our lending survey for the euro

area for the third quarter of 2020. loansnual growth rate of shot up 3.1% in october and changed from september. measuresour policy together with the measures national government and european institutions remain essential to support bank conditions and access to financing in particular for those most affected by the ramifications of the pandemic. crosscheck of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that monetarydegree of accommodation is necessary to support economic activity in the robust convergence of inflation to levels that are below or close to 2% over the

medium-term. policies, andal ambitious and coordinated fiscal stance remains critical in view of the sharp contraction in the euro area economy. taken inasures response to the pandemic emergency should as much as possible be targeted and temporary in nature. weak demandtime, from firms and households and a heightened risk of a delayed recovery in the light of the new lockdowns owing to the second --e of the pandemic were warrant continued support from national fiscal policies. endorsed safety nets by the european council for workers, businesses and sovereigns provide important funding in this context. recognizesng council the key role of the next

generation e.u. package, and stresses the importance of it becoming operational without delay. -- it calls on member states to deploy the funds for productive public spending accompanied by productivity enhancing structural policies. this would allow the next generation e.u. program to faster,te to a stronger, and more uniform recovery and would increase economic resilience and growth performance, thereby supporting the effectiveness of monetary policy in the euro area. policies are particularly important in addressing long-standing structural and institutional witnesses and in accelerating the green and digital transition. we now stand ready for your

questions, thank you. question comes from reuters. would like to ask how did you arrive at the 500 billion if you could give me a bit of a rundown, what were the alternatives or discussion in the end for a unanimous decision? the second question is about the depreciation of the euro, an issue that has come back. what is your discussion about the exchange rates and needs from the discussion if you could give me a bit of color on what was said and the concerns expressed. thank you. thank you very much for your question, and let me just some up and then i will go into the actual description of the package and the reasons

behind it. what we have decided, as was anticipated as a result of the last october monetary policy discussions that we had was a recalibration of the instruments that determined where most effective current -- determined to be most effective under the current pandemic circumstances. it is with that in mind that we decided to focus the pp, andration on pee temporary programs that are specifically designed for the pandemic. on version three, intended to provide as much refinancing as possible for those banks that are lending to the economy and to offer a very attractive rate for those that actually complied with the objective and threshold that would at least increase lending to the economy and also

decided on the measures that come with it, and in particular the extension of the term during enlarged,aterals are and taken into account for andoses of tltro's extension of the swap and repo line and so on and so forth. duration, to take the there was a discussion as to how long should the extension be, but why should there be an extension, because clearly we are facing circumstances that are in the short term, more difficult, and that difficulty has been caused by the second ase and containment measures a result of the second wave. it is fair to say that we had anticipated that there would be inecond wave amplified previous projections, and the depth of it, and duration of it

were not anticipated to the extent that they actually occurred and are still taking place. extend,ensible to because of the impact that it has on the economy in short order, and the reminder that the fourth quarter is going to be negative, 2.2, and it will carry into the first quarter of 2021. and, why did we decide nine months? pushing ate, we were economies instead of having all day economic knowledge, we also have to be very aware and ,ttentive to health literature and the forecast that scientists have in respect of immunity in respective vaccinations and the rollout of vaccinations, and that is how we came up with this nine month extension because we

have good reasons to believe and you read the same material, we tried to make sense of that. we have good reason to believe that by the end of 2021, with uncertainty associated with that, we will have reached an efficient you -- herd immunity to hope that by the end of 2021 the economy will function over more normal circumstances in particular, the service sector will not be impaired by a lot of the social distancing and restrictions that apply to it at the moment, and not facilitate the growth of the sector. into thetakes you beginning of 2022 where the economy begins to recover seriously. recovery takes root and we are two years after the beginning of covid. i think you combine all of that and we arrive at this extension by nine months.

now, the volume of additional purchase that we have considered is clearly intended to deal with our focus, which is to pervert -- preserve favorable financing conditions. that is really what is guiding our action going forward. that will lead us to purchase in a slightly different way than we have in the past as you will have noticed in my reading of the introductory statement, we state very clearly, i think it is at the top of page two for those who have it. we say we will conduct our purchases under the effort to preserve favorable financing conditions under this period. we will purchase flexibility and with a view to prevent a tightening of financing conditions inconsistent with countering the downward impact of the pandemic on the projected

path of inflation. inis all nicely embedded that long and fairly complicated sentence, but that is what has driven or of the additional steps we have decided. now, you wanted to understand what our discussions had been about exchange control, -- about the exchange rate. let me remind you our position. rate,not target exchange but clearly, exchange rate and the depreciation of the euro plays an important role, and exercises downward pressure on prices. willll monitor it and we continue to monitor it carefully going forward. thank you. ok, the next question from cnbc.

>> do you hear me? pres. legarde: yes, very well. >> thank you. i have two questions, one, you must have read the international settlement quarterly report as well where they are saying that they are saying a risk. i would like to hear from you whether you think that is a risk in terms of for the next phases of that crisis that we are currently in. and then, also, another question on why did you touch the rate, because mainly that drag to the rates lower into negative territory. looking at the package which touched on the instruments, why did you touch the rates? on your first that the i think monetary policy that we have

decided as well as fiscal measures that have been decided at member state level as well as at the european regional levels combined, and contrary to the previous crisis, are working hand-in-hand. they have managed to provide income, and enough supports by way of guarantees, by way of moratoria in order to help the economy from all sectors to go across the pandemic and sort of cross the bridge with appropriate support in order to avoid the contest -- the catastrophic fallout if it had not had that support. in that respect to the monetary policy has played a significant role in supporting the sectors of the economy and making sure that credit flows and that there ofno major fallout in terms