Of 1 ow by only 1 10 versus the u. S. Dollar, but nevertheless it seems to be a logical move for the markets. In terms of what we have got coming up, we will be talking about whats happening in the race to find a vaccine. We will be joining by the ceo of novavax. With the United States getting done earlier on. This stock has been on an absolute tear this year, today really adding on to that as well. We will get that take on the progress thats being made and what the money is going to be used for and in terms of where he is relative to his peer group in the race for the vaccine, the many vaccines that we will ultimately end up needing if we are not going to do more damage to the global economy. The European Commission is out with its assessment of the european economy earlier on, warning that the coronavirus Economic Contraction will be bigger than anticipated earlier and the recovery will take longer than previously estimated, forecasting a 3. 7 drop in growth this year. Joining us from brussels, the European Commission vice president. He oversees the economic forecast. Thank you for your time. Is the number that you have produced today a warning shot to european leaders that they need to make sure, next week, that they come up with a rescue plan, a rescue fund for europe . Is this just further encouragement that that needs to happen . Indeed. If we look at european conditions, the economic forecast, there are deeper recessions. Forecast at 8. 7 for the euro area and for the eu as a whole. Gross next 5. 8 year. We see that a recession is and it means that we need a ambitious and coordinated response. We took a lot of measures for the Immediate Crisis Response and we see that these measures are bearing fruit. For example, if you look at unemployment rates, those are not as bad as we were fearing. We see the net the measures that were taken by the Member States to mitigate the risks for the positivity results but now we need to focus on economic recovery and that is important to reach a timely agreement on the eu Recovery Plan. As you know, the commission has come forward with an ambitious proposal. Alix will it come up as a comprehensive move forward . Forward,ards the move i mentioned a number of measures that have been taken already in with of Member States necessary flexibility to react with the fiscal rules, prudential rules. Measures that have been made to mobilize fiscal and Financial Support somewhere in the range of 3. 4 million euros. In terms of what should the European Central bank is doing should its a measure of crisis response. We need to look at how we can withlate economic recovery our next generation coming in with what we want to choose. The aim is not now just to go back to the big crisis status this economic Recovery Plan it facilitates the green and Digital Transformation of the european economy. We have a Euro Group Meeting this month. When do you see the best chances of compromise to get the deal over the line . In the netherlands they are concerned about many aspects of what you proposed. What compromises can you see happening . The eu is very good at finding compromises at the last minute. Where do you see that emerging . Indeed, it will require unanimous support of Member States. Thats why negotiations are already ongoing very intensely. Is European Commission reaching out to Member States. The Council Presidency is reaching out. Ago the german presidency on eu council started and they were very determined to Reach Agreement on annual Budget EconomicRecovery Plans. Compromises that we are assessing in terms of agreements looking at conditionality and how money will be available to Member States, making sure it is lined up with priorities outlined in the european semester where we coordinate member state macroeconomic policies, looking at rule of law conditionalitys and the socalled rebates, how much the payments to the budget are being adjusted as important. Those are a number of elements that can be discussed. In terms of the european response, its a Major Economic crisis, so an ambitious response would be expected with european solidarity. In 2011, 2012, the tradeoff seemed to be austerity. That doesnt seem to be in the offing this time around. How are you going to be getting everyone on board this time . Whats the difference . First of all, the nature of the economic crisis is very different. In terms of fiscal macroeconomic states, from member they are all facing symmetric economic shock coming from the pandemic and lockdown measures associated with this. From that point of view, what is important is preserving the economy to the extent possible with jobs in europe preserving european companies. We are able to reserve the economy. That is the basis of the strategy and why we can recommend these states take extent possible the capacity within the economy. Ands one major difference no one is really questioning this approach. Importanterefore also is that when we come with european response, we do not deepen economic disparities between or among eu Member States. There were some whose high debt levels are limiting the responsibility for sponsored countries whose Overall Economic development and income levels are substantially lower than eu coverage and of course we cannot lease to leave these countries behind, which is why we emphasize this Recovery Plan being ambitious and having to have strong grant components. Guy the others argue differently, creating saying that this will create moral hazard for countries behaving inappropriately and the grant component should be whittled down. What do you say to the netherlands and the other members of the frugal four about that . Encourageey wrong to the behavior that they argue is necessary to ensure the longterm health of the euro zone than just kind of preside providing a short term filler to get through the crisis. Is there a longterm message that needs to be communicated thet how money is spent, way money is spent and how it can be spent properly in a way that will benefit the region . Well, indeed. We need to understand that european economies are strongly linked and if we are leaving some behind, it will negatively affect other countries in the eu he emphasized next months ,nnual budget and Recovery Plan which should continue to foster the process of emergence among tober states and not leading divergences. A temporaryeld state aid framework allowing Member States to support Viable Companies that are in difficulties due to the covid crisis, but we see that the member state capacity to respond is different and there are Member States that camper forward to provide more substantial support to companies. But this is affecting the level Playing Field across the European Union and we need to ,ebalance this Recovery Plan and ours is the way to rebalance the difference. From that point of view it ensures a better, level Playing Field. We already touched on a moral hazard. We dont think we should be discussing moral hazard at the isrent stage, because this external economic shock that comes from the pandemic measures. All eu countries are affected and in threat of recession. Guy thank alix thank you very much for joining us. Im sorry, we have to leave it there, but we will have you back to discuss more. Coming up, or interview with the Deutsche Bank ceo about trading slowdowns in the second half. Morgan,sday with j. P. This is bloomberg. Alix all right, some breaking news for you. The president of brazil tests positive for the coronavirus, according to reports yesterday. He had been displaying symptoms. This has been an extraordinarily tumultuous time for brazil and the handling of the coronavirus. Bolsonaro really advocating a firm reopening, staying open, now testing positive for the virus. Now, thecompany news Deutsche Bank ceo is expecting a downturn in trading in the second half and heres what he had to say in a webinar with bloomberg. Part of thee were problem, that we are a solution and we should be a part of the done,on as we have have but if you are really comparing 2008 and 2009, when we had economic recession in europe and globally, if you compare the capital ratio, the liquidity, the working capital consumption youorporate through today, also see a lot of corporate in this world, most of our tribe improving the way they work with the workers capital. They improved their liquidity position. So, i think that the resilience of a lot of our kind is higher than 10 to 12 years ago. Then you have the unprecedented support from the central bank as we talk about the action of the Central Government where they have taken a lot of the right steps. What germany has done. Im very positive on the european steps that have been initiated, which all worked to contain this real pandemic in conjunction with centralbank measures and if you take these three items, Government Support programs, paying measures, and the improvement on the Balance Sheet of client, i do think that there is a lot of resilience in the system. Is it controllable . Absolutely. The loans the base for provision assumption for the year of 2020. Ok lets turn to one of the dominating topics in germany of the past few weeks, viacom. Deutsche bank has said that wire caps. Can you just explain what kind of help they are thinking about . Christian i know you will be disappointed, but im not able to give a lot of details. Last year we formed the the heartbank that is of Deutsche Bank. It is why we were founded 100 and 50 years ago to facilitate corporate around the world class of the world. Is a potential opportunity to look into technology, to look into payment schemes, we are of course assessing that. That is exactly what we currently do. When there is something more to transparency where the first tasks will be done. Players inof the key Transaction Banking services and were handed the obligation to , whether the situation there is opportunity or whether we can stabilize. Would you think about buying parts of that business . Judge,n, too early to but i think we made it clear last year when we set that potential other transaction in germany. The key for Deutsche Bank must to our shareholders and if this is the case we are happy to look into something. But it must also be better than all of our standalone existing programs. Guy that was the Deutsche Bank ceo speaking with our germany Bloomberg Bureau chief. He went into a number of different areas with banks on both sides of the atlantic struggling as shares lag of the broader market. One of the things he was talking about was the potential for trading to roll off in the second half of the year. It will be interesting to hear what jp morgan has to say about that. Lets get more details with scarlet early on in the crisis there was talk about how this was different from the great financial crisis with banks not causing it and then began wellcapitalized going into it. They think of themselves as part of the solution, dispersing money to muchneeded households and companies. Yet look at those returns, year to date asis on march lows it has become a valley trap with valuetrading below book and the redline since the financial crisis. Operating conditions are less than ideal with slow growth and negative rates in europe and regulatory overhang. The Federal Reserve telling banks they performed well on a stress test with too much uncertainty to allow the boosting of buyback or dividends. At the banks, whether you are talking about state cable state reguarantees or representation, you mentioned revenue boosts to these banks, and thats one thing these people are looking for as it should be more for the desks, but they say they expect a slowdown from the second half to the first half and even though there is a lot of debt issuance, it may not be sustainable. How will this show up during earnings season . Analysts are looking for a massive drop in profit from last year, 50 decline, only industrials are going to fare worse. I will be looking for a rash of costcutting announcements. Maybe not immediately as the ceos have made it clear that they are not ready to make layoff announcements immediately , but it feels it is coming in the years to come. Alix scarlet fu, thank you very much. Coming up, we will be speaking novavax, who just got 2 billion from the government. This is bloomberg. Guy welcome back. Bolsonaro president took a virus test for covid19 and today we have learned that he has tested positive. You can get those test back and some would say that this was inevitable given his desire not to wear a mask. Confusing signals as to whether the country should and how to handle it as Health Ministers are fired and resigned. He did say that the virus is like the rain. I dont know what that means, but thats apparently what he is saying right now. Not a huge reaction to the brazilian real. He has had a tough time, though. This is one of those countries that really has it suffered as a result of the virus ripping through the communities. Up next, we have the european close. We will figure out what the day has looked like. Hasnt been that positive. This is bloomberg. 49. 50 i found you good job. Now im gonna stay here and you go hide. Watch your favorites from anywhere in the house with the Xfinity Stream app. Free with your xfinity service. Now any room can be a tv room. Stream live tv, on demand shows and movies even your dvr recordings. Download the Xfinity Stream app today to stream the entertainment you love. Xfinity. The future of awesome. Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. Guy stocks wrapping up the day in europe. 30 seconds until the end of regular trading. Lowsean stocks at their around 2 00 london time. We have come off those lows driven by u. S. Sentiment. That copperhead line is interesting. Copperonavirus and trading in tandem over concerns about what is happening in chile and as we see the chile and case count pickup we are seeing copper going higher. That feeds into european minors which affects the london market. I throw in as an aside. I know how much alex like the story. 1. 5 as wee are down watch what is happening. We are down 1. 5 . Big banks weighing on london. The cac 40 down. 7. The dax around. 9 . I want to reinforce this. Volume, and im looking at the comparison versus the 100 day average is superlight. 50 , the100 is down cac 40 down 50 , the volume down 40 . Volume is light. As i say, we are off our lows. Lets take a look at the main markets. Breakdown, it is some of the banks that are causing some of the damage on the downside. Youre seeing that across europe from spain into france and london as well. We are seeing that damage being done. The ftse, the dax, and the cac 40 lower. The grr is worth paying attention to because sector rotation is a real factor that is worth bearing in mind. Down,state down, banks well wait to start the reporting season that is also pressure on the banking sector. We had calls from the ecb indicating there is a desire to limit payout to shareholders for maybe longer than the market was anticipating. The Mining Sector is higher. I talked about what is happening with the copper story. We are seeing tighter supplyside issues factoring into that copper price. Bear that in mind as we watch what happens to the chile in case count. A great chart on the bloomberg you can find. I will try to take that out and we will talk about that later. In terms of some of the individual stocks, lets take a look at names. Montclair has a credit line in the luxury space providing good news for it. We have been watching bayer. Having an issue with a judge in the United States related to the roundup sentiment. We have to take mitigating measures to deal with the impact the coronavirus is having. The stop getting pounded the stock getting pounded on that front. The copper stories worth bearing in mind. The supply squeeze beginning to have a Material Impact on the price. Alix definitely idiosyncratic. Not having as big of an effect as oil. Interesting to see how long it takes to get up and running and how do you ventilate a mind . I do ventilate a mine . Even Indoor Dining cannot be safe. Lets get more to the virus with our stock of the hour. Novavax is a pharmaceutical giant that stopped after getting 1. 6 billion award from the u. S. Government to develop a vaccine for the virus. Anthony found cheap dr. Fauci did warn yesterday in a vaccine may not offer the solution people are hoping for. We can assume a degree of protection, but it will be finite. It will not be like measles vaccine.