luis de guindos : interview with telediario 2, television espanola interview with mr luis de guindos, vice - president of the european central bank, and telediario 2, television espanola, conducted by mr carlos franganillo on 19 march 2020. * * * one way or another, this massive asset purchase programme will be of particular help to those countries that have been deeply affected, such as spain or italy, to ensure that spreads don ’ t widen dramatically at this critical time. it will help all euro area countries. some were in a weaker position ; their public finances were also more vulnerable than others. but what the ecb will not allow is fragmentation of any kind in the sovereign debt markets and a return to the nightmare caused by widened spreads. we are dealing with a huge health crisis, there is a severe economic crisis and we are going to ensure that it does not result in some kind of financial crisis or debt crisis. this is what we are going to avoid because the ecb is at the service of the european people. the european central bank has said that it will do whatever needs to be done to combat this crisis. does the ecb have more weapons at its disposal for the weeks or months ahead if the situation deteriorates? we can always do more. as you mentioned earlier in your news item, our commitment knows no limits. we will do whatever is necessary to ensure that this pandemic, which is having a massive economic impact, does not turn into a debt crisis or a crisis of the financial system. we will not allow this to happen. we are dealing with a situation which requires us to act with extreme intensity. you have said that the measures taken by the spanish government and other european governments are appropriate. but you have also hinted recently that the european union has perhaps not responded quite as effectively. are you afraid that a crisis of this kind could take its toll on the european project? let ’ s hope not. the ecb has already acted. basically what remains is for member states also to act and continue to act through their fiscal policies. and we need a pan - european response. we need a coordinated eu fiscal policy response. i am sure that this is what will happen in the end. the ecb cannot be the only policy tool used from an economic standpoint. monetary policy cannot be the only instrument employed. i am certain that member states will do something about this and they will adopt a

unrealistic assumption that, if true, should be a boon to global economic growth. to sum up the impact of the four key drivers of growth, deleveraging and demographics are quite unambiguously a dampener while energy appears a benign force. the long term trend for productivity is hard to predict. but even assuming a generally optimistic prognosis for productivity, it is quite likely that global growth in the next 20 years is likely to be lower than in the last 20. this means that returns from financial investments are also likely to be lower in the next 20 than in the last 20. safeguarding long - term returns the modest outlook for long - term economic growth presents a major challenge for government funds to close the widening gap between their financing needs and investment returns. • on the liabilities side, population ageing in the advanced economies will increase pension claims and place a heavier burden on social services such as healthcare. • on the assets side, slowing global economic growth will constrain investment returns. there are three ways to narrow this mismatch between trends in assets and liabilities : • the first is to reduce financing needs by lowering social expenditures or increasing fiscal revenues. both are politically difficult to do. • the second is to reach for yield by taking on various combinations of higher leverage, longer duration, and greater credit and liquidity risks. but the public perception and character of government funds limit their scope for aggressive risktaking. • the third way is to expand the investment portfolio to include new asset classes and new geographies for consistent and uncorrelated return streams. this option, while not easy, probably offers the best way forward. consider new asset classes. many government funds are increasing their allocation to nontraditional assets such as real estate, infrastructure, and even private equity. • australian and canadian pension funds have been pioneers in infrastructure investing, from as early as the 1990s. bis central bankers ’ speeches • norway ’ s government pension fund global plans to increase its real estate investments to as much as 5 % of its assets, with a corresponding decrease in its bond holdings. • calpers has been increasing its allocation to private equity and real assets, including real estate and infrastructure. next, new geographies. over the last 20 years, government funds have steadily reduced their home bias in their equity holdings, investing in markets outside their own country. the big shift in portfolio allocation in recent years has been to emerging markets. if long - term growth prospects for emerging