 I'll start with the data, except I won't start with the data, because somehow the transmission hasn't got through, but you know what they are. It's really what's happened to the world economy in the last four years. I mean you had this big collapse, 2008, banking collapse, which infected everything. Then you had a stimulus in end of 2008, early 2009, which became a global, coordinated global stimulus in April 2009. Then you had a recovery, not a strong recovery, but still a recovery. And since then the world economy has become increasingly disarticulated. Some bits are growing, but the bits that I think we're most concerned with, not only in Ireland, but in the United Kingdom and in the European area are actually not growing. And since 2010 have been flatlining, if not shrinking. So that's the background tool, that's the data bit of it. Well, now I go to what's happened in the last few days. Mr Cameron, the British Prime Minister, returned from holiday vowing to get Britain moving again. Something politicians often say. There was no admission, of course, that its immobility over the last two years had anything to do with the policies pursued by his government or by his Chancellor, Liebschecker. Well, I think we have to remember one or two facts. Between 2008 and 2009 the British economy shrank by 6% about. Then from the start of 2010 it did get moving again. But nine months later it flattened out and since then has stayed the same or been shrinking a little bit in the last three years. In the last three quarters. And I wonder why we've had this alternation. In the spring 2009, as I said, all the major economies, including the British, were given a large stimulus. And as a result there was a bit of growth. In June 2010 Osborne came in with his austerity package. And you got the end of growth. Now I know a correlation isn't a cause. But the coincidences are quite striking. It could be that the recovery had something to do with the previous stimulus. And the flatlining or shrinking has had something to do with austerity. I'm going to return to that later on. At any rate these coincidences deserve close examination. In the whole debate that's going on it's wonderful how people clutch at straws. For example there's been a fall in retail sales in July in the UK. And that's been attributed to the fact that people prefer to watch the Olympics rather than to go shopping. Well it might just be that they had less money to spend but that wasn't prominent in the explanation. Now I just heard yesterday that more and more shops are closing in Margate, Yorkshire. One third have closed in the last two months. Now perhaps this is due to the raptor tension people are giving to the Paralympics. People will always try and deny the obvious set of explanations in an effort to hold on to hope. The government clutches at straws of its own. Yes I'm quoting here. I know that goings getting tough. But we were derailed by the Eurozone crisis. That's camera. Sorry the dates are wrong. British recovery peated out before the European crisis started. It actually peated out as soon as the coalition started. But surely it was only the government's austerity policy which has prevented Britain from going the way of those big European profligate spenders in the Eurozone. And again I quote Cameron. When I first became Prime Minister our market rates were the same as Spain's. Ours are now less than 2%, theirs are more than 6%. Why? Because we threw a lifeline round the British economy and pulled back from the cliff edge. Yes sounds good. But wait a minute. Spain had a budget surplus and a low public debt in the run up to the crisis. A better fiscal position than Britain. And since then Spain has followed roughly the same austerity policy as that of the United Kingdom. So how can the difference in how the market treat the United Kingdom and Spain be down to the policies of their national governments? Well at least it's a question. But now we come to some good news. Yes again I quote. Growth has been disappointing. But in the last two years we've also seen more than 900,000 jobs created in the private sector. Well that's a tricky one. First of all the number of jobs created is neither here nor there it's net. Net jobs you need to look at. But leave that aside for the moment. First the Prime Minister doesn't tell us how many of these 900,000 private sector jobs are full time jobs and how many are part time jobs. According to the TUC the number of adults who have a job but would like to work more hours than they do actually work has risen by 1 million. 1 million since 2008. 1 million people have lost their jobs completely since 2008 and a further 1 million have lost part of their jobs. They don't work as many hours as they want to to get the income they need to get by. And it's a reasonable hunch and I think there are data, we don't have very good data about this, yet a large proportion of the new private sector jobs which Mr Cameron congratulates himself on are part time. Now I agree some employment is better than no employment but it's hardly the resounding success story it's made out to be. And second the 900,000 new private sector jobs haven't been all created by the coalition. A lot of them were actually being created by the less austere policies of the previous government but they have been counted in the total. And it would be more reasonable to say that the coalition has created 500,000 new jobs both full time and part time. There's still a puzzle and it's the puzzle that enables the government to take some comfort from these figures. It takes comfort from the fact that the percentage of unemployment in the UK has risen less than the output of the economy has shrunk. The headline figure of 2.56 million unemployed is actually slightly lower than it was six months ago although the economy has been shrinking somewhat since then. So what is the explanation for that? Well I think the best one I've heard is the one given by a Guardian editorial which put it this way. It now requires many more of us to labour a way to churn out the reduced quantity of stuff. So productivity has fallen quite substantially. And I think that explains the apparent divergence between the two sets of figures. Output and employment are not moving in exactly the same direction. As I said all this is clutching at straws. The present situation in both our countries is the predictable and by some of us predicted outcome of the policies pursued by governments since at least 2010. And so I think some of us predicted that we'd been exactly this situation that we are now two years ago. And that prediction rests on a straightforward Keynesian analysis which I now come to. Keynes explained well it's probably most of it is familiar to you but it's worth going through it again just to tease out its basic logic. Keynes explained how under employment equilibrium gets established. We can easily apply it to the present situation. We start from a situation of full employment but with a large number of highly indebted people. That doesn't matter. The ratio of debt to income doesn't matter as long as the economy is growing at a satisfactory rate. But suddenly the next step up the ladder is no longer there and a lot of people find there now living beyond their means. The only thing they can do is to spend less and save more or save more. But what happens if all households and firms try to increase their saving at the same time? Well then the total spending in the economy will fall since everyone's spending is someone else's income. There will be less demand for goods and services and therefore labour. Our collective attempts to get back into balance, get rid of our credit card debt as Mr Cameron likes to put it, will in fact make us all poorer and in fact reduce the amount of saving as well since we will have smaller incomes out of which to save. So the economy will go on shrinking until the excess saving is eliminated by the growing poverty of the community. The essence of this insight of Keynes and it was a profound insight that went right against the orthodoxy of the day. The essence of this insight is captured in the phrase the fallacy of composition. The fallacy consists in believing that the whole adds up to the sum of the parts. The most famous application of that fallacy of course is the paradox of thrift which I've just been describing. Individual saving is good under many circumstances but if we all try to save at the same time the community will grow poorer and not richer. That's why Keynes rejected more saving as a remedy for a slump. The correct response is more spending. If private agents lack the resources to increase their own spending as is very likely as their incomes fall and they find it increasingly hard to get loans, then the government needs to increase its own spending and that in a nutshell is the theory of the stimulus. Unless the government does that then I think you get under employment equilibrium and that is equilibrium. No equilibrium lasts forever. There are always changes but it can last a hell of a long time. And while it lasts you have a destruction of productive capacity going on for every year that the under employment equilibrium lasts because skills are being destroyed, plant is being destroyed and therefore the potential growth potential is lower than it would have been. Let me put it another way. Debt is simply that ratio of what I owe to my income. I can try to reduce this ratio either by saving more or by growing my income. The government faces exactly the same problem with the national debt. The government's income after all is drawn from the income of the community. If by trying to save more of its own income, which of course is what is meant by cutting its spending, it reduces the income of the community, it reduces its own income. So its debt will not go down, in fact will rise, is likely to rise and that is what has been happening. The revenues of most Eurozone governments, including those of Ireland, have been for some time on a downward trend and they haven't been able to reduce their spending by nearly as much as they hope to. Fortunately they haven't been able to reduce their spending as much as they'd hoped to because if they had our economies would have been shrinking even faster. So we seem to be between a rock and a hard place. The international organisations, the IMF and the OECD, are more or less agreed that present austerity policies are stopping growth. Let me offer a couple of quotations. Here is Mr Angel Gurria, Secretary General of the OECD. I'm quoting, deleveraging necessarily means higher savings and that means lower consumption and therefore lower demand. And the lower demand means even lower employment and even lower incomes for households and lower revenues from governments. And both of these mean slower deleveraging. It is a vicious circle. I know Angel Gurria quite well and we've talked about this a lot of the time and he's instinctively a Keynesian as you can see and he's finally got that kind of sentiment into the OECD reports. But OECD is largely financed by governments who don't believe this and so he's had a difficult part to play. And the same is true of the IMF. Here is the IMF, the latest IMF study about Britain, it says. The recovery has stalled and unemployment is still too high. Additional macroeconomic easing is needed to close the output gap faster. Scaling back fiscal tightening plans should be the main policy lever if growth does not build momentum by early 2013, even after further monetary stimulus and strong credit easing measures. The output gap, the one thing that the current, the current orthodoxy denies is that there is an output gap. You might think, well of course there's an output gap, output has been falling, there's quite a lot of extra unemployment, there must be some output gap. Oh no, no, no, no, no. The economy is at full potential. It's just that the potential is less than we thought it was. But here are official organisations who actually are calling a spade a spade. And of course governments have started to be influenced. For Keynesian, these insights are hardly news because that's exactly what Keynes argued. But it would be the case. But governments have had to contemplate u-turns because their policies have not been working. They can't admit that they're turning like the lady, we're not for turning. But they are turning nevertheless. Hence Cameron's called to cut out the dither. But there's still a great deal of disagreement about what form the turning should take. And I just want to end with the state of the debate as it now is. And that debate is broadly between the supply-siders and the demand-siders. The supply-siders argue that the way to get the economy moving again is to reduce the cost of doing business. Hence their demand for cutting red tape, which is a standard kind of thing, cutting out the waste, cutting out the red tape, the ability to get things done. Cameron was on about this great deal. It's impossible to get things done. There are all these bureaucratic regulations, red tape and the inefficiencies, especially of the public sector. And the various schemes for reducing the cost of borrowing for businesses, like the government's new loan guarantee scheme. I think one strand in the debate going on right from the beginning is the role of monetary policy. And monetary policy, I think a Keynesian would support expansionary monetary policy for demand reasons. But a Keynesian would say that money supply has to expand in the course of any recovery. But it's a necessary but not sufficient condition because there's a lot of, you know, you can lead the horse to water but you can't get it to drink. I think the evidence about quantitative easing as it's coming through from the United States and the UK in Eurozone, there hasn't been nearly as much quantitative easing because of the constitution of the European Central Bank. But the evidence coming through from the UK and the United States is that it's had some effect in stopping the fall of economies. There's been what's called a wealth effect. The guilt rates have been reduced by about 1%. And that, of course, has meant that there's been some wealth created by the buyers of the bonds for the buyers of the bonds. And so, you know, there is some effect, but it's not a very great effect. And I think Keynes also for saw this in 1932, he said, I think he said, what's the quotation? So it still may be the case that banks are asking more for loans shattered by their experience are asking more for loans that borrowers can afford to take out because of their profit expectations. So I think that's been a quite frequent observation that the money is coming out, but it's somehow not getting into the economy. Businesses are still finding the spread between the guilt rates and the rates at which they can borrow a large, even though they have fallen a little bit, but they're still historically large. So monetary policy, which the OECD looks to as the first sort of type of expansionary policy that governments might pursue, is not going to promise nearly as much. And I think the new UK loan guarantee scheme is a species of trying to reduce the interest rate. It's a way of trying to reduce the interest rate that businesses will have to pay on new loans. So you then get on to the, if you believe that what's holding the economy back is the cost of doing business, then the supply side does have a coherent program. But I don't think that is what's holding the economy back. The Keynesians would say not that the cost of business is too high, but the demand is too low, and that a higher level of demand would justify most of the existing costs. So that's where you have to go. I think I've made my own position clear. It's not that we can't do many things to improve supply, but the priority is to increase demand. So how do we do that? I'll answer, I'll be very happy to answer questions on that. And I don't want to say too much about the special position of Ireland. I think Ireland is in a particularly bad situation because it's constrained in its pursuit of any expansionary policy by its membership of the eurozone. This stops it from either devaluing the currency or printing money, and it also limits its access to credit markets. Now, I think Ireland has gained a bit from the depreciation of the euro against sterling, but it's not been much, and it can't do very much to stimulate its own domestic demand. Given the market's view of public finance and given that it hasn't got a central bank that can print money, and I think that has saved the British economy and enabled it to offset what would otherwise be savage deflationary policy of the government. So what then should happen? When I was in Dublin a couple of years ago, I urged Irish ministers to join with European colleagues to try to get the eurozone authorities to reverse their austerity policies, and there is some change in that happening. But since then the crisis has got a lot worse, and although I would still advise exactly the same thing today, that may be too late to say the eurozone itself. And if the eurozone breaks up, which I think is quite possible, that would be a completely different ball game with large dangers, but also fresh opportunities. I'd like to end on that note, and I'm happy to answer the question.