, i would like to use this opportunity to extend my condolences to all countries, both candidates for the european union and members of the european union, over the biggest and permanent losses during the pandemic – human lives. without people, our measures have no meaning. in serbia, after growth of 6. 2 % in q4, we entered this year with excellent trends and 5 % growth in the first quarter. this is an excellent result because already in march we felt the effects of the pandemic on our economy. we provided strong support to preserve lives, jobs, wages and liquidity, and help those whose businesses were practically blocked by the pandemic. the national bank of serbia was the first institution to react with an entire set of measures. first, on the same day the pandemic was declared we held an emergency meeting of the executive board, and we were among the first central banks in central and eastern europe to reduce the key policy rate. second, we provided a three months ’ relief in loan repayment to our citizens and the economy, which around 93 % of banks ’ clients accepted. third, we provided dinar and fx liquidity to banks through various operations. our goal is to have the low rates at which liquidity was provided - fully transmitted onto corporates and households. the serbian government reacted by adopting a huge package of measures worth around 11 % of gdp, which includes government - guaranteed liquidity loans for micro, small and medium - sized enterprises and entrepreneurs, the most affected by the crisis. of course, there is no dilemma that the pandemic will have a strong short - term impact, but the essence remains the same. our projection of serbia ’ s economic growth of at least 6 % in 2021 suggests that, owing to the measures that we implemented, serbia will fully recover from the effects of the pandemic already next year. this is also in line with the forecast made by all institutions which carefully monitor our country. and in terms of inflation in serbia, the projections of all institutions are similar to ours. they practically come down to the assessment that the imf often states in its reports – that inflation in serbia will remain under firm control of the national bank of serbia both in the short and medium run, which means it will remain low and stable. when it comes to the country ’ s external position, the effects of the pandemic will manifest in all segments – exports, imports, remittances, primary income

, my main concern is not whether private individuals will manage to repay their loans or not. the real question here is what will happen to enterprises. with the government itself paying a margin of 3 - 4 %, which source of finance can enterprises rely on? and if the entire economy can only borrow at double - digit interest rates, and even such borrowing is in short supply, how will this reflect on the country ’ s economic growth? at this point, we may safely conclude that the measures taken by the us and eu governments and their respective central banks have so far produced no results, that money has not been costlier for over a decade, that the key policy rates of central banks and the market price of money ( euribor ) are still moving in the opposite directions, that excess money pumped into the banking system by the ecb is returned in the form of deposits rather than lending, while trust among financial agents has troughed and the economy is already heading for recession! 2. it is practically impossible to foresee the future course of the crisis. earlier taboos, such as the valuation of balance - sheet categories, are being broken overnight, the governments are nationalizing the banking sector in order to “ strengthen the market mechanism ”, stock exchanges are even rewarding such moves and there is no end to government plans! learning from history, the governments have clearly decided that it is better to overreact than underreact, but, unfortunately, with little success so far! the future course of events will largely hinge on : • how far will the government go in acquiring ownership of the banking sector and when and how will it pull out – if, indeed, it wants to? • to what extent can central banks replace the financial sector as lenders and should they do so? • what will happen if governments are really faced with the obligation to pay out a major portion of the promised funds, which could well lead to bankruptcy as in the case of iceland? the situation is already unravelling, and a number of countries – primarily ukraine, hungary and kazakhstan – are mooted as potential “ victims ”! why these countries? the answer is fairly simple : a ) high level of debts maturing in the next year – question of possibility and cost of refinancing, b ) high share of foreign currency clause indexed loans, with savings mostly in the domestic currency – at times of exchange rate turbulences, c ) heavy dependence on inflow of foreign capital ( foreign direct