EU's Economic Rescue Plan...How the Shutdown Has Impacted the Housing Sector...Mental Health During a Pandemic

[Goldman Sachs]( [BRIEFINGS] April 28, 2020 Daily Check-In With Goldman Sachs: José Manuel Barroso on the EU’s Economic Rescue Plan European leaders’ agreement on a €540 billion economic relief deal last week represented “a step in the right direction, but…a lot remains to be done,” said [José Manuel Barroso]( chairman of Goldman Sachs International and former president of the European Commission, in a recent episode of [The Daily Check-In with Goldman Sachs](. But despite the issues that remain—including the amount of grants versus loans to finance the rescue package, and the idea of debt mutualization among the 27 member countries—Barroso said that he believes that a compromise will be struck during upcoming negotiations over the EU’s next seven-year budget. “People understand that if some countries in Europe are very asymmetrically affected, that will be of course very negative for them,” Barroso said. “But it is also going to be bad for all of the Euro area.” Also in The Daily Check-In, we heard from [Jonny Fine]( in the Investment Banking Division on the record volumes and big deals shaping the corporate credit markets; [Harit Talwar]( global head of the firm’s Consumer Business, on how the shutdown is changing the way that consumers interact with financial services companies; [Jim Covello]( of Goldman Sachs Research with the latest on shareholder dividends and his proposal for “variable dividends” to give companies greater balance sheet flexibility; and Goldman Sachs Asset Management’s [Nora Creedon]( on the impact of the pandemic on the real estate sector. SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Daily%20Check-In%20With%20Goldman%20Sachs%3A%20Jos%C3%A9%20Manuel%20Barroso%20on%20the%20EU%E2%80%99s%20Economic%20Rescue%20Plan&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fseries%2Fthe-daily-check-in%2Findex.html) Update From Goldman Sachs Research Fiscal and monetary authorities around the world are weighing new strategies to mitigate COVID-19’s economic impact as attentions turn to reopening economies and relaxing social distancing. In the US, Goldman Sachs Research expects Congress to pass another $550bn (2.5% of GDP) of relief in calendar year 2020, including aid for state governments and an extension of enhanced unemployment benefits. In Europe, much of the burden remains on the European Central Bank despite several welcome developments from the EU summit, and Goldman Sachs Research economists expect the ECB to step up its Pandemic Emergency Purchase Programme (PEPP) by €500bn at this week’s Governing Council meeting. Meanwhile, the economists argue the Asia-Pacific region has reached “peak lockdown” barring a major reacceleration of infections. China has eased liquidity significantly, and policymakers are encouraging local government borrowing and considering a “virus bond” to fund fiscal spending, which would represent only the third time the country has turned to a special national issuance. SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Updated%20From%20Goldman%20Sachs%20Research&body=) How the Housing Sector Has Been Impacted by the Economic Slowdown The housing sector is poised to rebound more quickly from the economic fallout of the pandemic than it did from the global financial crisis, says Terry Hagerty, co-head of homebuilding and building products investment banking for Goldman Sachs. In the latest Exchanges at Goldman Sachs podcast, Hagerty points to three key drivers behind his team’s cautiously optimistic outlook: favorable supply-and-demand dynamics, consumers’ relatively strong financial positions and healthy corporate balance sheets. “When I look at the balance sheets and liquidity positions of my clients, both in home building and building products, it’s quite strong,” Hagerty says. “Generally they’re all positioned to weather what could potentially be a very extended downturn. So the outlook today is much different than 2008.” Listen to the podcast on [Apple Podcasts]( or [YouTube](. SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Why%20Housing%20May%20Rebound%20More%20Quickly%20Than%20it%20Did%20in%20the%20Last%20Financial%20Crisis&body=https%3A%2F%2Fwww.goldmansachs.com%2Finsights%2Fpodcasts%2Fepisodes%2F04-21-2020-terry-hagerty.html) Talks at GS: Mental Health During a Pandemic Above (L to R): Richard Gnodde of Goldman Sachs and Paul Farmer CBE of Mind With much of the world in some form of a shutdown, the need for mental health services is more critical than ever, according to Paul Farmer CBE, the CEO of Mind, a leading mental health charity in the UK. “How many of us can think about the last time we weren't really able to walk out the door, or go into our offices, or go and buy a coffee without having to think several times about whether that's the right thing to do?...These are extraordinary times and so they already have an impact on our mental health,” Farmer told Goldman Sachs International CEO Richard Gnodde in a recent episode of Talks at GS. Farmer offered steps that people can take to protect their mental health, including connecting with people digitally, maintaining a daily routine and taking a break from technology and the news. Despite the unprecedented challenges of this time, Farmer said that he hopes there will be a silver lining. “I hope we’ll look back on this period and see it as a moment where we took a big step forward in terms of recognizing that we all have mental health, recognizing that we all need to take time to look after our mental health in the same way as we’ve become used to looking after our physical health.” [Watch video]( SHARE: [twitter]( [facebook]( [LinkedIn]( [email](mailto:?subject=Talks%20at%20GS%3A%20Mental%20Health%20During%20a%20Pandemic&body=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3De_2gaFFWMbY) Briefly…on Managing a Global Workforce During a Pandemic Goldman Sachs’ Bentley de Beyer had just started in his position as the firm’s Global Head of Human Capital Management when the coronavirus hit. In a recent conversation with Greg Wilson, Head of Institutional Client Businesses at the firm’s Ayco financial counseling business, de Beyer spoke about his transition to the firm, the future of work and how he communicates with a global workforce during the crisis. What follows is an edited excerpt from their conversation. Greg Wilson: You’ve had more than 20 years of experience in the human resources industry, most recently at Johnson & Johnson, before joining Goldman Sachs in January. Can you talk about what it was like to join the firm at an unprecedented time? Bentley de Beyer: I’ve lived and worked in five different countries, which gave me unbelievable exposure to how different markets—notably the Asia Pacific region—handled exogenous shocks. Joining the firm at the start of crisis, meant it was especially important to be as transparent as possible with our people about the health of the business, our clients and the communities we serve. We’re managing through an extremely dynamic environment—which changes on an hour-to-hour basis—where normal integration plans and playbooks are being thrown out. Right now, we’re very focused on how we can help employees and their families navigate their unique circumstances and pressing personal demands. In some cases, it’s meant adjusting long-standing policies and practices, such as advancing 10 family care leave days, or recalibrating our learning and developing programs and offering wellness and resiliency programs to help our people stay physically and mentally robust. We learned a lot from our colleagues in Asia Pacific, who shared best practices on split teams, family accommodations and creating response plans. Greg Wilson: How did your team adapt its approach to working and communicating with employees as the virus evolved from a regional issue to a global pandemic, and any lessons learned? Bentley de Beyer: We sharply increased the intensity and frequency of our communications and, early on, made adjustments that may have been unpopular at the time but proved to be appropriate when the seriousness and intensity of the outbreak became more obvious. Probably one of my biggest "Aha" moments was that for a large majority of our workforce this was their first large-scale crisis. Many haven’t lived through a financial crisis or they had just entered the workforce. It was an important learning that there was a high level of anxiety among our population. So we really had to meet that head on and focus on our wellness response in a much more substantive way. Our CEO David Solomon and our management committee have been connecting with people in real time and in a highly authentic and accessible way. We’re really trying to share weekly insights from our leaders and a lot of storytelling. For example, each week David holds either a virtual meeting with the firm’s 400 partners or a virtual townhall open to everyone at the firm. Something I’ve learned from people at other great companies is that storytelling is incredibly powerful. We’ve shared a lot of the stories of how folks have gone the extra mile, people we’ve supported temporarily stepping out of their day jobs because they have a healthcare background to go work at hospitals on full pay from us. There are hundreds of examples of these things around the world that we’ve seen. We’re sharing them and it has built a strong spirit of togetherness and community amidst the challenges, particularly with 98% of our workforce working from home. From my perspective, that amplifies the need for connectivity, for elevating digital platforms, for looking at ways we can stay connected and create a sense of unity among our employees that we are all in this together. Greg Wilson: Do you think the way we work will culturally evolve in the times ahead? Take, for example, work from home as a general practice versus a business continuity practice. Do you see less travel for meetings or more video conferencing? Bentley de Beyer: I think the future of work is now. This is the largest global experiment on the future of work that I can ever imagine. Certainly not the way that any of us would have liked it to occur, but we can certainly learn a lot about flexible work, the capacity for folks to work in different locations, and be highly productive. I also think old adages such as, “If you’re not sitting next to me, you can’t be productive,” or a lower level of trust with people working remotely, are being blown away based on how well large corporations around the world are finding their way through this. It’s going to be a fascinating time to be an HR practitioner over the next few years. I also think that instead of being a competitive advantage, flexible work will ultimately just be a base expectation for talent. The need for connectivity is still very high, whether that’s virtual or physical connectivity. Greg Wilson: As you think of balancing the need for business and the need for being human, any advice that you’d provide to client-facing teams? Bentley de Beyer: The words—“How are you doing?”—are probably some of the best words to string together in a sentence on every phone call. It sounds so simple, yet we’ve all been working at an intensive rate for many years that I think there’s this 15-second pause that is very powerful right now. It’s amazing how people will reach out and connect on that basis, even before what you need to do together or what particular issue you need to solve for. The power of just asking goes a very long way. It’s a moment of connection and caring. For a replay of the full conversation, click [here](. Goldman Sachs Media Highlights Bloomberg - April 23 [Goldman’s Currie Sees Global Oil Storage Exhausted in 4 Weeks]( (4:59) Bloomberg - April 22 [Goldman’s Kostin Sees S&P Hitting 3,000 by Year End]( (4:38) CNBC - April 22 [Goldman Sachs’ Jim Covello on the Concept of Variable Dividends]( (3:58) [Subscribe]( [Unsubscribe]( The data provided in this newsletter is for information purposes only and should not be construed as investment or tax advice nor as a recommendation to buy, sell, or hold any particular security. Goldman Sachs believes the data in this newsletter is accurate, but does not verify its accuracy independently and does not warrant or guarantee that it is accurate or complete. Goldman Sachs has no obligation to provide any updates or changes to the data. No investment decisions should be made using this data. 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