New and emerging risks The rapidly changing global landscape has given rise to new and emerging risks which are mostly intangible, such as cyber, liability, supply chain and reputation. Cyber risk is the new catastrophe, estimated to cost the global economy between $ – $ trillion annually. This is much higher compared to the average annual cost of natural disasters at $ More than just the burden of cost, cyber risks often bring about much embarrassment and reputational damage to the company and its clients. However, cyber risks are not adequately prepared for and their associated costs and impact under-estimated: •  A large majority of businesses believe that cyber risks are still not fully understood, and that risk readiness for cyber risk may have been “vastly overstated”. •  Challenges exist around the quantification and pricing of cyber risks and their accumulation effects. Yet such risks are the most likely to occur and carry the greatest potential impact on operation, with the leading risks in terms of impact and likelihood being: •  Reputational damage from a sensitive data breach (impact on organisation’s resiliency – 79%; likelihood 79%)  •  Failure in a main IT data centre (59%; 77%)  •  Disruption of online services due to a cyber attack (58%; 77%).
Lastly, most spending is temporary and non-recurring, which will make it hopefully possible, once the crisis is over, to return to a sound and sustainable fiscal path. II. Can reconstruction now strengthen Europe and the Franco-German alliance? After the emergency phase, the time has come to exit the crisis. We Europeans have common objectives here: to support growth during the recovery phase, but above all to invest for the future (climate change, digital, health, etc. ), in a world that is increasingly uncertain. To achieve this, Europe has four concrete and innovative levers at its disposal: an unprecedented recovery plan, a Financing Union for private savings, its single market, and its commitment to fight global warming. An unprecedented recovery plan The Franco-German initiative of 18 May, and the subsequent European agreement of 21 July, have been a major step forward for European financial solidarity. This is an unprecedented act of solidarity towards the countries most affected by a pandemic, which is itself unparalleled. For the first time, a common European-wide fund to finance final expenditure has been adopted, representing over half of the package (EUR 390 billion). This is not only a strong political signal, but also an economic rebalancing of the policy-mix in the euro area, which lays the groundwork for a real common fiscal policy. The ECB's Governing Council has long advocated that monetary policy should not be “the only game in town” in Europe. This is very good news.