Are beginning to see the impact of the cuts. Depending on where you are in a lot of the focus on your markets, a lot of the focus is on your data. You have a lot of earnings and banks saying coming up with a little bit of a forecast. And then we have quite a lot of corporate macro views, we are expecting a number of big Central Banks to come out with statements. Life to 11ing its a barrel. Rapidly moving storage capacity. That story today with a lot of corporate earnings overall looking at not only the oil story extending but if you look at the s p 500, the contract fluctuating. In europe we are holding firm. Lets get to new york city with first word news. Europe heard much of the continent looking to you loosen restrictions. Setting up their plans following germany, austria and the netherlands. Wary ofkers are spurring a second wave. Here in the u. S. , the white house issuing a new strategy to expand Virus Testing as well as revamped guidance for states announcing they would open hundreds. President is receiving criticism over the slow pace of testing. He says he is confident the u. S. Has the testing to begin reopening the process. Knowsent trump says he the Health Status of kim jongun but didnt reveal it. Saying the public would hear Additional Details in the nottoodistant future. Kims absence from key events fueling speculation he was gravely ill following surgery. Now to hsbc. Its taking its biggest charge for bad debt in almost nine years. To 3 billion. The banks profit also missed estimates. It delayed part of it and to ubsng program , expressing confidence in its ability to withstand a surge in bad loans but it warns on pressure. The bank seeing that profit surge and then shrinking its Investment Bank to large corporate loans. And to put less aside future losses. Global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Francine lets have a at what impact the virus has on the Global Economy in the longer term. President trumps unveiled a new testing strategy he says will allow the economy to reopen. Thank you so much for joining us. You have a number of papers trying to outline what the priorities of government should be, how bad do you think this recession will be . We surveyed a number of chief economists from across different sectors and this was about four weeks ago. At that point the sense was a good 30 thought we were looking at a v shape and a sort of sharp recovery. A good 35 or so were essentially certain this was going to be a u shape and would take longer because the sequenced way its affecting economies. Given the predictions from the imf and where the situation is now and the more recent conversations weve been doing. It is really heading towards the majority of people expecting a u shape with the caveat that this what type ofwithin proactive measures to put in place, how quickly and efficiently we get the fiscal and monetary measures to actually impact the enduser specific households, specific individuals and specific firms and how quickly we sort of deal with some of the supply and demand disruptions happening across various sectors. There is a set of proactive measures that can be taken to make that u smaller than it would be otherwise. Would this be new measures or implementation of some guarantees. It impacts emerging markets more than some western countries. I think emerging markets are doublea sort of twin down between crisis. One where basically Health Systems were already insufficient for their populations and are now facing greater pressure than ever before and then in addition to that far less ability to borrow, less ability to deploy the kind of funding we are seeing being deployed. So there is certainly a bigger burden in a number of emerging markets and i think we will need more support from advanced economies to help those countries get through this crisis because we are only as safe as the weakest link and this is a global pandemic. How do you manage or balance reopen the economy with saving lives . Is it worse economically to reopen and then go back to a lockdown than it is to gradually reopen . Wei think first and foremost have to rely on epidemiologist and Public Health officials in various countries, whats been interesting is this era of not so much Big Government but rather bold government we are starting to see in many parts of the world, some countries are putting in place some of those medium to longterm measures that are essentially reshaping what type of economic recovery we come back to you. And whether thats in denmark putting in place measures that dont give support to firms that are registered in tax havens or and france, limitations on buybacks and dividends and essentially a number of Different Countries experimenting with putting in ways job related guarantees to those firms that are receiving support i think it is an industry interesting indication of the type of recovery we go back to and implementation along with experimentation on the Public Health side, some combination of the two will be required to get back to a safe recovery and also a more dynamic economy. When will we have a clearer picture of how many jobs will be lost forever . There are certainly some indication that a number of Consumption Patterns will not go back to quote unquote normal. If thats the case there are certain sectors we could be looking a more permanent job losses. For now i think its impossible to say how big that impact is going to be but at the same time i think lets not forget your also going to see a lot more investment in certain sectors that were being neglected whether thats education or health care, youre going to start to see more investment in certain areas and a new source of job creation. What will be important is that middle period in which you have a number of workers that are going to be out of roles or wont have income support in the medium to longterm spending quite a bit of time on supporting them through safety nets, those will have to be priority and they are also going to require a lot of support from the private sector to make that happen. Really what happens in the mediumterm is essentially this crisis leads to structural change in a number of economies. The question around women is an interesting one. What we are seeing is women have made up a very large majority of the most essential workers. So if you look at sort of the care sector across the eu. 93 of child care workers and teachers are women. 86 of care workers in the health services, 5 of them are domestic leaners and helpers. A number of jobs that have either been greatly affected by the lockdown happen to be essential workers are fulfilled by women. So it would require some type of gender lens with the support thats been given to those workers and at the same time it could lead to an overall revaluing across society. They happen to be some of the most underpaid roles and yet in the midst of this crisis they are the most essential workers. Thank you for your time this morning. This, weve an exclusive conversation with the commissioner of the european commission. We will ask about the european economy and what the best way to deal with the pandemic is. That conversation is up shortly. This is bloomberg. Francine good morning everyone. You data is doing. A lot of focus is on oil. This is after we saw huge positions over the last 24 hours. Looking at broader markets and you look at what we see in the european stoxx 600, they did nudge higher at the open. Chargesd that bad loan may climb to as much as 11 billion this year. We will have plenty more on whats happening to oil and we will have that exclusive conversation with the eu commissioner. We begin with apples retail chief seeing many more stores reopening in may but he didnt specify which regions. The company hasnt told its corporate employees when they can go back to the office but tim cook previously saying they will likely if the past temperature and Health Checks to enter buildings. Airbus is furloughing about 3200 staff at its u. K. Plant in a manufacturer saying it is agreed with unions to take advantage of the government payroll support scheme. The move will impact of production of the wealth at the site and periods of the last three weeks each. Review, unprecedented now seems to be on firmer footing. He has drawn praise for bringing in new legal experts in prioritizing investment talk. We end with santander. They have taken a big hit for a bank. That as it tries to put a number of potential total provision junkies 3. 9 billion euros, specifically tied to the coronavirus causing income to plunged by 82 . In the first quarter. That your Bloomberg Business flash. Up,cine coming conversations about the recovery coming up next. This is bloomberg. G. Francine this is bloomberg surveillance. And fight the specter of an ugly recession, im pleased to welcome the european commissioner for economic and Financial Affairs and former Prime Minister of italy. Thank you for joining us. Updating,are do some what country would be hit the worst or what country will be hit the worst . We are now concluding our feeding of our models for the forecast that will be presented on may the seventh. Is unfortunately the pandemic will have consequences that the union will have recession, i think what the imf presents a few days ago ofch was a negative growth. 5 for the European Union will not be very distant from our forecast. Countries will be affected, but we could have recessions among nearto 10 and recessions to minus six in Different Countries. But the cutoff date for this forecast is at the end of this week so we are still collecting figures to have the forecast more accurate. Francine those are quite wide divergences, how do you explain them . Is at the base of certain economies or how they were hit by the virus . I think in the 2020 figures, what will be important for long thees will be how lockdown or how severe these lockdowns were because yes it affected all European Countries but with different timing and different level of consequences, then we will have for sure in 2021 at months and in risk of divergence connected to different firepower from Single Member states to describe it as this is the renewed the reason why we need a strong common response from all the European Countries and the european institutions to avoid this divergence after the pandemic. Youve talked about this 1. 5 trillion euro Recovery Fund, how much should be in grants and how much should be in loans . We already decided part of this task and then as you probably know we decided 500 billion euros in a short times work and small and medium enterprises. Andwe need more for sure with a Recovery Fund we should reach the amount that more or less you were mentioning. If we want to have a macroeconomic impact with this common intervention. Mix of it will be a mix. Obviously the key is how long the maturity of the loans will crucialse this is also to avoid that European Intervention and the consequence. The solution is partially and second is depending on the maturity of loans which is obviously very important. What should be done is to avoid exactly this conundrum . The would beels unsustainably high as prices pass. I think for the time being all our debt is absolutely sustainable. No European Countries have problems of access to the market. Was a veryision strong and effective decision, so this is not risk we are running now but we should that a commonsk crisis affecting every single european country transforms financial and divergent crisis. Toolss why we need common and as you know common tools are not usual. Francine commissioner i will jump outcome we will come back. Francine this is bloomberg surveillance. Thats get back to our conversation with paolo gentiloni, european commissioner for economic and Financial Affairs, former Prime Minister of italy. Thank you for staying with us. We were talking about the measures put in place, the Recovery Fund that europe will most likely put in place. How will this Recovery Fund be funded . Olo this is what we are working on. The idea that the commission is working on is to have this fund connected to the european budget , and using the european budget to borrow in the financial amount ofsufficient money, and then the discussion will be on how big this hunk of money should be on the timing, because we cannot wait for this fund one year or Something Like this. We need this, i think, very already and as we mentioned, is the composition of , with what security, and how much will be on grants. Grants are probably needed, arecially in countries that risking to augment their debt with only loans. But this is the discussion going and, sorry i cannot give already clear answers of the final decision that we will present to the european member states. Francine how soon should the Recovery Fund be operational . Will it be before the end of the year, and do we need to find something sooner so that you can the critics in certain countries and say the European Union is not showing enough solidarity . Well, i think at the beginning of this crisis, there idea in the Public Opinion in several countries,specially the most effective where they relaxed solidarity from the union. I think this has changed during the weeks, and now we are, i path. On a better we took already important decisions, and the Recovery Fund should be the next and decisive step when. What we needed in the next month, everybody here in europe is mentioning the Marshall Plan. The Marshall Plan was proposed two years after the war. An endinge dont have to the war and we begin the reconstruction and we can wait two years. We will have a transition period , living with covid19 in some invest theseeed to common tools at european levels in the next months. Front loading what would be the european budget that will take place next year, but we need to anticipate this with measures allowing to begin this intervention already in the next month. Commissioner, something in the next month, and then operational in 2020 . Again, how significant is that for countries that need something a little bit more . Well, i think it is significant because, you know, europe, i think, 25 million, 30 million workers that are in different programs reporting work. We call them in different ways, france, andlly in italy, and others. Workers huge number of that are trying to keep their ,obs in their Companies European contribution, which is a new fund that we are putting in place, will be important. Obviously, we are coming on top of national interventions, but this is exactly what european ownn should do put our on top ofesources national interventions. Doing this reduces the risk of divergence among countries that have the firepower to react, and countries that have less fiscal space to intervene. Francine commissioner, i wanted to see your thoughts on oil. Im looking at the price of oil, below 11. Partly it is market movements, but does this show that the than economy is much worse any forecast we have seen so far . It is difficult to understand if this is a longterm tendency, or it is connected to a more shortterm volatility. Sure, it isor indicating that we will have a global recession. By the way, we all know that more than 100 countries have access to the ims support intervention. We know we have Global Forecast of global recession, and the oil this may beicating extra with an volatility, but this is something showing the trend we are in. But at the same time, and our haveasts, we show this, we the possibility to have a strong rebound in 2021. This is connected to two things outbreak,oid a second because this is the first condition to have a strong rebound. Have Economic Policy measures that are consistent with the idea of a strong , not forext year single countries but for all European Countries. Commissioner, what can we do to help the banks function properly, to make sure they do their job of supporting the economy . Rules, look capital at ratios . How much more can the Commission Due to alleviate burden on the banks so they can fulfill what they need to do right now . Commission will myt my colleague colleague will present today our , so to say, soften some of the rules, in the past what some of the rules. At the same time, i think it is very important what we decided state aid rules , because this made possible for Single Member states to deliver an enormous amount of money i really enormous amount of money, which is now nearly trillions of dollars, instate guarantees for liquidity, and this i think is something absolutely substantial , that without this changing in the e. U. Rules would have been impossible, and that was made in the last month. It in the more optimistic side, i would say that a lot has been already done to give our Banking Systems the guarantees that it needs in such a difficult situation, with such a huge number of companies having problems of liquidity and risk of steps. Francine commissioner, thank you so much for your time. He is paolo gentiloni, commissioner for economic and Financial Affairs. Coming up, we have a great conversation on tourism and greece. We will be joined by the greece tourism minister. Thatmt beaches, what does mean for their forecast . With empty beaches, what does that mean for their forecast . That is our conversation next. This is bloomberg. Francine good morning, everyone. This is bloomberg surveillance. Lets talk about terrorism. More than 31 Million People visited greece last year. Sector of tourism accounting for a quarter of all jobs. What can we expect to see in easing of restrictions . The pleased to be joined by industry of tourism on the phone. When do you plan to reopen greek hotels . Well, as you can imagine, this is a complex exercise, and our government, with the decisions of the Prime Minister, was moved very early, very decisively, very quickly to ensure that we have a very flat curve, and we are very glad to say that we have managed to be successful. As you can imagine, we are starting on a new phase of lifting the measures. Tonight the Prime Minister will announce the exact timetable, so i dont want to preclude his announcements, but of course we are starting for next week to lift the restrictions. The hotels will be gradually open, and the restrictions will be listed in the summer, sometime in july. We should be having all of the areas of the economy functional, with perhaps the exception of slides, which we need to agree on among the Different Countries. Quite a lot ofe followup questions on that. First of all, what kind of operating status . Will be will there be distancing rules on Hotel Lobbies and beaches . We have to live in the post covid area with different rules for hotels and buses, etc. We will be publishing those in the next few days. Thediscussions between medical experts and the expert so far, the minister of tourism is ongoing. Distancinging about so that we do not have the kind of crowding that was the normal in the previous years. But we are also aiming to ensure that we have the same kind of friendly and joyful atmosphere that people know very much and love when they come to greece. Worried, and you foreign you secure tourists inside local populations . And that people from inside the city and the island is there going to be a Health Passport . Is it bracelets, is it going to be quarantined . I dont know how you will work that out. Quarantine is not the right way to do. We were very successful in the aggressive kind of tracing and testing that we did when we found specific cases. So of course there should be some kind of tests that we are discussing with Health Experts in order to be able to travel. Ideally, this kind of agreement should be agreed on a paneuropean level. We are hoping that the commission will show the required leadership to expedite the discussions and the agreements, but if that is not the case, we are willing to set up our own rules, and of course try to agree those with the that we have ministers from in the European Union. Francine right now, what kind of rules . Is it a Health Certificate . T would be imagine thatn every week the Health Tech Sector comes up with a new agreement, so this is going to be an ongoing work to decide the kinds of procedures that are airport andween the inside the aircraft and of course when people stay with us, depending on what they do, on the beaches, swimming pools, etc. Upi said, we are setting rules and regulations. We will extensively discuss those rules on the streets to make sure they satisfy the ability of the businesses to run. But at the same time, they are adequate. We are not going to compromise on our relentless pursuit of the covid cases. We have managed to be successful , preserving the health of our citizens. We will do so preserving the health of our business as well, ensuring that our health system, which was strengthened during this crisis. We are in a much, much stronger position as far as our National Health system is concerned. We will be it will be adequate to deal with any cases that might arise. Francine minister, thank you for your time today. Coming up, we have a great conversation with the ubs chief executive, sergio ermotti. We will talk about loans, on guarantees, and what their clients are asking of ubs. This is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance boo. Executive, surge or ermotti, spokeo with manus cranny this morning. Sergio, first of all, let me point out that our credit losses during the last quarter is the outcome of the strategy, and a clear risk reward priorities that we put in place on how we manage and the Financial Resources of the bank. It is also reflecting very for us to of manage risks on a shortterm basis. Last but not least, it reflects sees at that our model high degree of concentration in lending exposure in switzerland, and in general, to assetbased lending, so where we have a high guarantees. Derlying relativelywe can be optimistic about the extent at which credit losses will impact our future. Of course, we also will be affected by that. Announcement, you talk about net income, transactionbased income all under pressure. Is that going to come to bear on the numbers in the rest of the year . on currencies, it is y much at asset levels theevels will be starting point for q2 is lower, as we expected a contraction of about 200 million, 250 million. You saw that the and i i was stable. Lower rates will continue to affect our margins on the front. Thate other end, the fact we are extending more loans is helping us to mitigate that part of that. A more on the other end normalized environment in terms of the transaction volumes, and offeel that the combination all these factors, positives and negatives, in addition to the fact that we are continuing to execute on our strategy, helping us to mitigate the negative effects. Aboutcus is really all continuing to perform while staying relevant to our client and keeping our employees safe and healthy so that they can ,ontinue to do a great job because eventually when you look at the first quarter, you saw ubs at its best, and able to perform across any dimension. Word lets talk about the you used twice. When we spoke a couple of weeks ago you said we were lending, more loans. Where are you seeing the most uplifted lending . Side, or thei. B. Wealth management site . And the geography just a little bit more color. Bygio we expended lending 15 billion across the board geographically, which is in addition to what we are doing in switzerland, where we extended to billions in the governmentbacked programs, and we also made a commitment in the u. S. For another 2 billion. We extended 15 billion of extra lending across every geography, across all businesses. In switzerland, for example, we expended we extended to Swiss Companies one billion of managementnd wealth we had an expansion of landing of around 4 billion. Coming up to the end of the quarter, it is interesting to see, for example, that in asia, in march, you saw some deleveraging. The net number is all about the want risksome clients on and off during the quarter. Across the board we see lending demand. Exactly what we are supposed to do and what to do at this time to help clients to go through this difficult time. But also at the same time, keeping our capital strengths, our discipline, and our management so that we can also perfect on the other side of the break she come our depositors. Was the chief executive of ubs, sergio ermotti. If you look at the markets, european stocks are holding onto gains. The other main market story away from the banks and earnings is what is happening with oil. If you look at wti, it was below 11 million a barrel. We will have plenty more on markets throughout the day. Also coming up, tom keene joins me out of new york for two some for two more hours of surveillance. Happy tuesday, everyone. This is bloomberg. Francine as spain and france get set to announce easing of coronavirus measures, has europe done enough to tackle the economic costs of the crisis . Bad loans dominate bank earnings. Hsbc takes its biggest charge in nine years. Ubs says its credit portfolio will shield it from loan losses. And oil plummets again. Wti extends losses to more than 35 over two days. Over two years. B. P. s chief executive tells us were beginning to see the impact of opecs cuts. Well, good morning, good afternoon, good evening, everyone, this is bloomberg surveillance. Keene, we have three stores. One is banks, second we will talk about earnings, a lot of earnings from a lot of sectors, the banks not doing too badly in that. Ad wti, 11 down after beholder of those futures spilled