 Dwi'n meddwl i'r wych yn ei wneud am yr oeddwn i'n dweud. Dwi'n meddwl i ddim yn ei ddwylltyd o'r ddweud. Ond roedd yn cyfnod i'r rhywm. Rwy'n meddwl i'r cyfnod i'r Dilydd Glwyddon a'r Brefysgol oedd yma. Roeddwn i ddweud yn y Dillad David Cameron yn ystafell yn ddiddordeb yn llawd ac yn ddiddordeb yn Ieithgwr. Rwy'n meddwl i'r ddiddordeb yn llawd a'r ddiddordeb yn llawd. Rwy'n meddwl i'r rhan o'r penedigol ac yn ystyried. Henry Kenne will say that we need much more cohesion policy money coming to Ireland, the Poles will say that we want co-agro-cultural policy and cohesion money. So we all know what it is discussing. We all know that they're tired debates, we've heard them for the last several rounds of the multi annual financial framework. So what I'm going to try to do is be a bit different today and say what might be a more interesting way of dealing with the European Union's finances Mae bwysig yn chwarae, am y lluniau ac ymwylwch y trafyn'i, sy'n hytrifio gyda'r afadwyr ac yn trefwyr â'r afadwyr cestafol. Felly mae'r ddiweddolaeth o gymwyl, iawn iawn i gwelio i'r flwyddiaeth fwrdd cyfle o gêmog. Felly, mae'r ün joy specification yn adroddol fawr yn maen yn yraur i wlad. Dewchais i'r meddwl mae'r gweithfyrdd honno'r gethau dysgu o'r budgau euchydigol, a rydyn ni'n wages i'w gweithfyrdd. Felly, mae'n gwybod a'r wrthoes iawn o'r ffordd o'r ddweudio ar gyfer ar gyfer ffynans yn cael hwn. Mae yw y ddweud yma, un o gyllideb yn amlwg ar cyfrifiadau, oherwydd mae'n gwneud o'r cyfrifoedd o'r gallu cyfrifio'r gweithio i'r cynhyrchu yn ddigon i'n cyfrifio'r cynhyrchu i'r cynhyrchu yn cyfrifio'r cynhyrchu. Dwi'n cael ei gweithio, sy'n ddweud i'r bodniol yn bwysig ar gyfer rhan o'r gweithio a'r rhan o'r ardal. Felly, mae'n golygu'r gweithio ar gyfer bwysig ar gyfer bwysig? Mae'n ddweud i'r gweithio ar gyfer bwysig ar gyfer bwysig ar gyfer bwysig, ond oedd y maen nhw'n mynd i'r rai ffyrdd y cyfnodau sydd ar gyfer bwysig ar gyfer bwysig. Mae'r rai ffyrdd ar gyfer bwysig. Mae'r rai ffyrdd ymlaen o'r ffyrdd ymgyrch, Some solidarity mechanisms across borders purely at the level of Governments bailing out, providing loans a the other forms we've seen as this crisis has unfolded A third question is whether this is something which should set up as a permanent equalisation system Now any Germans in the room will tell you that the finance ausgleich The equalisation between lender and Germany is a very uncomfortable phenomenon Dwi ni'n wneud ar gyfraith sydd ar dolli Hengedrwys, o'r rhaglen oherwydd, o'r hesun a aildyddau hŷn i'r Gwynhwys, o'r mechlynbur llaw. Felly dyna diwrnod o'r glennu wir. Roedd ydych yn digwydd i ti wneud i'r grannu'n gweld i'r grannu y gael ddygonion i'r gwlad i'r Greifiau i'r bwel o'r ymddangos iawn. Ond o'r ffordd proffnol yn y llehau feddwl yn ddigwyddig am eu gweld. Mae'r gweithio eich bodi'ch cyfnoddau gymrydedd yn yw'r parod o'r dwylo'n ymwneud yw'r problemau a yw'r codiadau iawn. Rwy'n gallu bod bod yn cyfrifio fydd yw'r cyfrifio'r mewn cyfnoddau ond o'r lleiwch ar gyfer yna'n cyfrifio newid cyfrifio'n cyfrifio, oedd ydych chi'n gweithio'n cyfrifio'r cyfrifio ar y dyfodol, o'r byw o'r ddau aesymeth aesymethau, oedd yr anodd yng ngyfnoddau. Ac there is a more contentious question, which you can see on screen now. This was part of the June European Council conclusions, and reiterated in the October European Council conclusions, the Euro area it said needs some sort of fiscal capacity. And the translation from that was that it is the fiscal capacity able to stabilise the Euro area economy as a whole. The ways in which this could be done, it could be through having some form of automatic stabilisers of the sort that has been mentioned already, in which what happens is that as the economy goes up or down, more tax is raised when you go up, less tax is raised when you go down, more public expenditure is induced when you go down, that automatic stabilisation is a feature of any mature economic union. The trouble is that at European level there is no automatic stabilisation built into the budget, nor can there be realistically when it's only 1% of GDP except when you start to consider two levels. Automatic stabilisation could in fact work from the EU budget for the smaller member states because their GDP relative to the EU budget is much smaller. A smallish component from the EU level can help very much to stabilise an economy like Ireland, Greece or even Cyprus when it turns down. So we should consider this interaction between the levels and not merely the fact that the EU budget as a whole cannot stabilise the EU as a whole in the way the federal government is able to do in the US. That could be taken further by some form of discretionary capability. You can intervene at your discretion if you believe that stabilisation is at risk. So that is something that could be seen as a new sort of governance demand that we need to work on, something that the four presidents report has mentioned but not really elaborated, extremely vague in the way it's expressed at the moment. So why not? What's the difficulty in this? Well, you won't be surprised to hear that there are quite a lot of them. The first is that, once again, if we think what was happening in the used-to-slips used building in Brussels today, what they're all arguing about, the fundamental political decision is the net balance. How much do we put in? How much do we get out? It's bean counting of the worst possible sort and that bean counting takes the form of, come on, remember the handbag, we want our money back. Or, we're poor, you need to help us. Now, the Irish were very creative about this in the previous round when Ireland said you must continue to give us cohesion policy support, not the standing, the Celtic tiger miracle, because we've only been rich for a short time. I think it might have been Rory Quinn that mentioned this particular idea. It was wonderful Irish inventiveness, but it's a variation. You need to help us. And it's all about net balances. So this is the dominant political decision that's being made at the moment. In addition, the line you're hearing particularly from the richer member states and the net contributors is fiscal consolidation is happening everywhere. Therefore, logically, the European Union budget must also be physically consolidated, which is a roundabout way of saying cut. Does this make sense? Well, there are two reasons to argue that it doesn't make sense. The first is that it's a budget for the period 2014 to 2020 that's under discussion. If we're still in crisis by 2016, then all bets are off in any case. We hope that the crisis is on its way to being resolved. So we should be thinking in medium term about the EU budget and not relating it to the circumstances of 2012 or possibly 2013. It's also potentially false as a proposition for a different reason, which is that as member states are constrained, you could argue that the fiscal capacity of the European level really ought to be increased to enable things to happen that are being stopped in member states. It's because of fiscal consolidation. So I would actually go so far as to reverse the argument here and say that it's an argument for a bigger EU budget precisely because member states are in difficulty. And yet it's very hard to persuade electorates of this. We heard much from the Minister about democratic legitimation. It's very hard to persuade electorates who are being squeezed, particularly the Irish electorate, that more should be spent at European level because that's your money. Why can't you spend it at home when nurses? Just as an aside, you do know that in the British system we don't measure public expenditure in pounds sterling. We measure it in nurses. How many nurses will this cost? Any proposition? How many nurses is the European Union budget going to cost us? That's the way we analyse things. What you also see in this is that there's something called a negotiating box. It sounds like a very uncomfortable contortion, maybe Harry Houdini invented it, in which all sorts of things are put together. And each of these involves what the German political scientist Fritz Scharf has called the joint decision trap. The trap is that you can't reach consensus. Therefore you go for the lowest common denominator and therefore you never move forward. Each country shows up in negotiations with its famous red lines. These are the things that we may not cross the British rebate, the common agricultural policy for the Irish and the French, etc. Things I've already mentioned. And in all of this you find horse trading going on. You must smooth the deal by saying, well, we'll give you this if you give us that. That's the way these budget negotiations take place. Underpinning all of this is conditions. Under what circumstances do you give more money to a certain country? Greece is the most egregious example of this because the Greeks are having conditions imposed on them day after day, but they're not the only ones who face such constraints. So can we break out of this? Can we, Brenda? Realistically can we break out of this? There is, I think, an economic case for this, for what I call quasi-federal approach. And that is to combine stabilisation and solidarity in various ways. In other words, to have mechanisms in place which will bring about transfers when they are needed to countries which are shocked, particularly downward shocks where the economy is hit. We need to imagine what can we do with the constitution. The European Central Bank has actually showed great imagination, not normally a characteristic you associate with central bankers, in the way it's interpreted the treaty. I think we need to do something similar around the fiscal arrangements in the treaty. This could include a number of things. EU level boring capacity. We could aim for new cross-border flows. We could say that under the next multi-annual financial framework, why don't we accelerate spending in the countries that need it at particular times and slow it down at other times? Use a test of whether they need stabilisation impacts. There's nothing in the rules to prevent any of this. We could make it easier for certain countries to borrow by using the instruments such as the European Investment Bank to complement what's available through immediate public finances. In other words, make it easier for countries to borrow cheaply. That would resonate well in Ireland, I think. We could use various forms of buffer funds. They've been experimented on in other countries. Finland, for example, has a form of social insurance in which you can run a small deficit in bad times and run a surplus in good times. That buffers spending over the economic cycle. Much more controversially, if I hesitate to say this in Ireland, you could consider having common taxes as a way of generating money which could be used to generate a stabilisation fund. The most obvious one, I hate to say it, in Ireland, is the corporate income tax. If you pull corporate income tax across countries, you would smooth out many of the infelicities that it gives rise to. But there are tensions around all of this. Those tensions are the things we need to sort out because of the ranking we see in the just as looks yesterday. My concluding comments on this. If we genuinely want to move towards whatever fiscal or political union means, and let's face it, we're not very clear what these things mean at the moment, what we have today by way of an EU budget simply won't do. We need to move beyond it. That means we need hard choices to be made on the mechanisms that might be countenance for the future. It's something that needs time to bring in. It may need new institutions. It may even need a European treasury of some description. Clearly there are many obstacles, not the least of which is potentially creating divisions between the nine other members who are compliant with these things and a certain country that is always going to be in the awkward score. So those cleavages need to be dealt with. We need to sort out the problems of moral hazard. You don't want to be offering countries which are cavalier with their debts even easier or boring because that would just induce them to borrow even more than they do at present. And I think we need to work out who speaks for taxpayers. Is it the European Parliament or is it National Parliaments? But having said that, the missing link in all of this governance system is that we do not have a European taxpayer. We only have national taxpayers. And in the absence of a European taxpayer it's very hard to move forward towards a new sort of budgetary system. That is the missing discussion in the governance debate at present. It's one that I would advocate calling on. Now, Kevin's already mentioned Keynes. We didn't concert in this, but there is a very appropriate quote from Keynes that I'd like to finish with. I'll read it out because I know we're on camera. The difficulty lies not so much in developing new ideas as in escaping from old ones. Thank you.