 We have the great fortune to have with us today, the chairman of the Eurogroup who continues to be chairman until next January. He's in his second term as chairman of the Eurogroup. Your own has been minister for finance for some years in the Netherlands until the recent election and from next Thursday he will be taking up a special position as special advisor to the ESM to continue with the work that's been going on there. As I said to him as we met first just over lunch, I said we're all far more interested in hearing what's been going on and where he's heading than I thought he's been doing for the last 20 years. So I skip the whole biography and simply say that he is only the second person to hold the share of the Eurogroup. He's, as I say, coming to the end of his second term and it's been a group that has had a major influence on thinking about economic and monetary policy in the member states and one which will I think clearly have a very important role to play in the future development of EU 27 and I'm thinking specifically about Bank and Union and Capital Markets Union. On both of which subjects, Jeroen has had some very interesting things to say very recently. Ladies and gentlemen, Mr Chair, thank you for the opportunity to be here today and to talk at the institute. I am indeed in my last days as minister so just in time that is to say any thing you want to ask about the Netherlands you can do. After Thursday I'm only available for Eurozone matters. So I will talk about the Eurozone and I will go back a bit in time because I think it's useful to look back at the years behind us and the lessons that we've learned from that and then of course I'll go to the future of the Monetary Union which is heavily debated and in the coming months there will be some progress looking for decisions perhaps in December or January on that topic. So I think where we stand now if you look now at the Eurozone it's been a huge achievement. Growth has returned to all of our member states. I believe we now have in the Eurozone the 17th consecutive quarter, consecutive quarter of growth. Average growth at about 2.1% in the Eurozone. Of course still with some big differences but a very strong recovery at the moment. Growth is quite broad based. It's built on exports growing in many member states, consumer demand picking up and also investments. Less so still government expenditures because the fiscal effort to redress deficits and to bring down sovereign debt is still of course ongoing in our countries. Interestingly enough at the moment the divergence in growth and growth development has been reversed. We have finally for the first time since the start of the crisis again a sort of convergence when you look at the growth levels in the Eurozone and the dispersion between member states and growth levels in member states has never been so low in the Monetary Union. So that's also a very positive thing to look at. Another interesting thing to remark is that in those countries and those member states they have done the most reform efforts sorting out how the public sector functions, how markets are open to new companies and initiatives, reforms in tax systems or other parts of the legal system. In those countries the growth is the highest and Ireland is an obvious example but the same is true for Spain but the same is true for the Netherlands where we are now at about three three and a half percent growth this year and also we did some major reforms in the last couple of years. So reforming and of course it depends on how you design the reforms you get it right, reforms pay off in terms of extra growth at the moment. So before we start looking at the future what's next? How can we develop the Monetary Union further? I think it's useful to just go back in time. A lot of discussion is of course spent on have we done the right thing? Have we approached the crisis in the Eurozone the right way? But even to answer that question you need to go back to the pre-crisis years. I think after the introduction of the Euro we came into a phase in which money was cheap, financial sector was deregulated, a lot of crediting over crediting took place in many countries, booms were building up not just here in Ireland but in many European countries housing markets were over credited prices driven up. A lot of the credit that came into the economies in the Eurozone was not invested in productive sectors which would have been useful of course. I think if you look at a country like Greece where the credit flow to the economy grew massively in that pre-crisis period after the introduction of the Euro before 2008, much of that credit went to households who consumed it or spent it on real estate and little of that credit went to companies that invested it well in productive sectors. I think macro prudential policies were neglected, certainly the possibilities to control sound credit policies and to control the looming booms. Many of those macro prudential policies were not used, not put in place and risks built up throughout the Eurozone. So yes there was a link with the introduction of the Euro, the introduction of the Euro created in many countries very low spreads, low interest rates and the availability of cheap credit but it was also due to the lack of sound policies, macro economic policies, financial sector policies, macro prudential policies that allowed us to become very vulnerable going into the crisis. So at the beginning of the crisis in the Eurozone there was very much a sense that the crisis was caused by the US and the US mortgages and the US banks which in fact was certainly not the whole story. I think the major problems were very much domestic typical to the Eurozone as a whole and sometimes typical to the member states. Yes you can blame the financial sector for being so lenient on the way they put out credit. You can say that they certainly didn't take the risks into consideration but here again I think national policy makers should also take part of the blame, not regulating the financial sector, not making sure they were well capitalised, not protecting consumers against over-crediting etc. So in the first years of the crisis a lot of improvisation took place. I think it's only fair to say that we didn't have very strong frameworks, regulatory frameworks, we didn't have institutions to deal with the kind of economic shock that we had in the Eurozone and it took years to build that but we did. I don't think the crisis was wasted, I think it was used to strengthen what we have in the Eurozone and to build institutions to support the recovery. Of course part of that was setting up the emergency funds first improvised and later on in a more structural way in the ESM. Part of that but it came late was the start of the banking union and I think one of the main differences between the approach that the US took after 2008 and the Eurozone or the EU took was the US dealt with its banks much more rigorous and much faster, forcing them to recapitalise quite quickly. We also dealt with our banks but we did it in a very costly way, increasing sovereign depth in many member states, high price for taxpayers to be paid without really going into the fundamental problems in our banks. The banking union was a more fundamental change. It was an element that of course should have been put up much earlier. We started it basically at the same time when Mario Draghi said I'll do whatever it takes. The government leaders finally decided we must set up the banking union and that was mid-2012 and the negotiations started. I came in at the end of 2012. The negotiations on that started in 2013 and already in 2014 it took off and I think even though it started much too late it was been a huge effort and it's been of great importance for the economic recovery and return of trust in the economy in the Eurozone. So where are we now? Growth is back. We have better institutions. We have more stability. Fiscal issues have been addressed in most of our countries. Still work to be done. But if you look ahead, potential growth is still low. The growth that we now have on average is over potential growth. We need to realize that when we say we have now on average 2% growth in the Eurozone, that's far over what we potentially can expect in the medium term. And that needs to be improved. Productivity growth is low. That's everywhere in the Western world. Competitiveness, very slow. Wage developments, lagging behind. I'm not sure how that is in Ireland but it's certainly true in countries like Germany, the Netherlands where the economy is still, is again very strong, but wages are lagging behind. Also, our capacity to deal with future shocks is still very thin. We have used monetary policy, well, Mario Draghi will say we've never used it to the full extent. But you could argue that we've used large part of the monetary instruments of the toolbox of the ECB. Governments still don't have, it's uneven but in generally speaking governments in the Eurozone still have a lot of fiscal space to absorb any future shocks. And therefore we are still very vulnerable for an event that could come in the next years. So more work needs to be done there. We should really use this period to at a national level create that fiscal space to absorb shocks. I won't comment on the ECB policy but you can follow my thinking on that. So we are not sure that both on the public and the private side the capacity to deal with future adverse shocks is improved. So what does that mean in particular at a national level? I think we should really continue our reform drive looking at how we can create a much more investment friendly climate in different member states, opening up markets, opening up many protected professions that we still have allowing for new companies to be set up easier. We should look at making our social model sustainable. A lot of work has been done there. For example in the increase of the retirement age or the way that pension systems are being financed a lot of work has been done. But I think to make sure that the social model remains and it's based on a sustainable footing more work needs to be done. And we can provide, we should improve the public services that we provide. This is about the quality of healthcare, the quality of educational systems, the quality of infrastructure still major differences between member states and a lot of room for improvement if we could converge to a higher level. At an EU level I think my key priorities will be to finish the banking union and to create and deepen the capital markets union. This is because I believe that if you want to absorb shocks in the economy the best way to do it is to allow markets to be the shock absorber. If you look at the US the key absorption of asymmetric economic shocks within the United States the key absorber are markets, financial markets, labour markets. They have the flexibility to absorb the majority of the economic effect. And let's not turn too quickly to the public side. Let's not too quickly make what I would like to call private risks a public problem. So let's finish that banking union. This is some of the elements I think are easy in a sense that political agreement is close. We have already set up as you know resolution framework and resolution fund is being built up but the open question is still about the backstop to the resolution funds if in the case of a very big banking crisis it will be depleted where would the capital where would the liquidity come from. I think there is more and more support to look at the ESM to provide that backstop to the resolution fund. Still more controversial topic but I think we should really get it done is the deposit insurance scheme. Controversial certainly in Germany but it's very much about how we can reassure the critics that the banks are so much more sound now that we will continue to deal with remaining risks and imbalances in bank balance sheets. And if the balance in how we design it is right the balance between what is then called risk sharing and risk reduction I think we should take steps forward on that. It's a very important element when we talk about rebuilding trust in the banking sector in Europe. So let's first of all make sure that the private side of our economy and markets are in a better shape, better integrated and are able to absorb any shocks in the future. But what about the MU, what about the public side, how we've designed the monetary union. So I would say that on top of the national efforts further reforming the economies and on top of having better functioning markets we need to look at at least two avenues to improve the monetary union. One is what Jean-Claude Juncker calls the convergence instrument. It's an instrument coming from the EU budget so we're talking about transfers to members who would be in his mind converging to the Eurozone. I would open it up to all Member States and say all those Member States that are in a reform drive, have a reform program that they want to do should be supported between connecting some EU transfers, structural funds to that reform drive so we support them in that process. That's from the EU budget in my mind for all Member States that we're talking about transfers. The second way to approach it and I think we should do it in parallel is to look at the ESM. Many have argued that the ESM can develop further into a European monetary fund. In my mind that means that you also look at the instruments that the IMF has and how we could use them or develop them for European monetary fund. As you know the ESM has so far only provided funds connected to a program to those countries that have lost access to financial markets. So this is really about a crisis program and a crisis instrument. But I think we could develop the instruments of the ESM or EMF if you will further introducing precautionary instruments or preventive instruments supporting countries in financing some of the reforms that need to be done or supporting countries in financing them while they are pushing for major reforms. For example, a country that would enter into a major labour market reform but would have costly interest rates, could be helped in their financing connected to that reform effort or even some of the expenditures that would go with the reform. If you do a labour reform you may want to invest in skills or education in the labour market. Some of those expenditures could also be funded cheaply through the EMF. This of course would only be for Eurozone members. We're talking about financing not transfers and it would be done. I think this is an important element and part of the debate it should be done in an intergovernmental framework. The ESM is owned, so to speak, by the Member States and its governance is run by a board of governors which are the Ministers of Finance. They decide on how the ESM is and can be used and I think to be able to make steps in deepening the EMU in the next couple of years having it in an intergovernmental framework would probably give some of the more critical Member States some comfort. So let's develop it further, let's introduce new instruments to stabilise the economy of Member States and support them in their reform drive but do it within the intergovernmental framework. Finally, and then I'll stop. I think the key element for the monetary, the key issue for the monetary union is about restarting the convergence machine. The World Bank some years ago called the EU a convergence machine. This was before the crisis and I think we need to restart that convergence machine. It has, if we don't do that we have two risks. One is of course political. It becomes more and more difficult to remain united in the European Union and also in the Eurozone if countries politically but also economically diverge. But also our economic instruments become less and less effective. Also this is true for monetary policy if the state in our economies is diverging. So this element of converging is converging of our economies and our economic development is crucial from an economic point of view but also from a political point of view. I think there are opportunities to do it. I think some of the landing grounds can already be seen. Some of the compromises can be envisaged. And I hope that we can use the current political window of opportunity to get it done around the beginning of next year. Thank you.