 Thank you very much for the very kind introduction. I'm very happy to be here. I think it's it's a very good moment to be here in Dublin and speaking about the Eurozone the crisis and And the way we have Started to come out of it. I don't want to be too definitive that it's insane that the crisis is over But we still we already have good results to show for our efforts over the past three years And I think it's appropriate to be here a few months to three months after Ireland successfully exits its bailout And at a time where we are also two three months away from exiting successfully our own bailout So I think this is something we should discuss here today the challenges that we had three four five years ago and way I think we have Turned the corner in some cases exceeded expectations And let's try not to forget what The critics of of the youth strategy on the crisis were saying even a year two years ago Back in the at the time when the Eurozone collapse was being announced for a few days later I remember reading some columns on this in the Financial Times It's good that politicians are scrutinized and held responsible for their decisions, but it's also good that everyone in the public debate is held responsible for the opinions that they held and I think in some fundamental sense we have Shown that we're taking the right course. Of course There's room for adjustment and in some case significant adjustment and there were certainly wrong decisions taken along the way But this is an appropriate moment when when Ireland and Portugal have Reached the end of their of their programs and there is no question that Portugal will exit the bailout successfully It's a good time to remember What I think has already been achieved Even though some significant challenges remain and we'll talk about those I'll talk about some of the issues related to to the to the crisis and to the Efforts that were developed at the European and national level to overcome the crisis but I wanted to start with the idea that That we need to Develop a strategy for Europe and that perhaps Portugal and Ireland have a fundamental contribution to make in this respect Because they are as they say peripheral countries But I want to talk about the idea that the periphery is more of an opportunity than a threat and try to Actually redefine a little bit the concept of periphery and think about how Portugal and Ireland are in some respects in a privileged position To think about the future of the Eurozone You may want to remember that Those who are at the periphery have a view of the whole and those who are at the center Have to turn around to see different parts of the whole and I think this is a little lesson in in applied geometry But but I think it it actually has a deeper meaning That perhaps the center is is sometimes a bit self-centered has the word itself indicates and that the periphery can have a more cosmopolitan approach to EU policy and I'll try to develop this a little bit a Cosmopolitan theory of the EU so to speak We've been reminded of these issues With the with the situation in the Ukraine Tragic for for all Europeans in the sense that We've been made aware of on the one hand how powerful European soft power is How capable of attracting people in different parts of the world How capable of building networks and connections with different parts of the world, but at the same time and in some respects Fragile because it is built on consensus because there are no state structures at the European level and because Outcomes are never fully determined and there's an element of crisis that seems to be In some respects always present in the way we do European politics I want to to point out what this soft power means and how to make it an Asset even more than it is now and what it means in my opinion is the ability that European society has to directly without The aid or interference of state structures to establish connections all over the world And these connections can be built on a certain way of life. They can be built on European NGOs they can be built on the fact that we have in the EU 28 different member states that can sometimes have a very Interesting division of labor. Some of them will be closer to some parts of the world Others will be closer to other parts of the world. This is an enormous asset that the EU has But let's remember what what this asset is based on and it's essentially based on diversity What is at the root of European soft power the fact that in the EU we have 28 different nationalities That don't aspire to become one What they aspire to is to create a space where they can freely communicate among themselves this capital of diversity of exchange of ideas and This very intense practice and training and in diversity and in a cosmopolitan outlook Which perhaps we most of us in this room didn't have when we were growing up But that's certainly people of a younger generation will have People who grow up in the EU as it exists now will from a very early age be trained in looking at life from different Perspectives having friends from many different countries trying to combine all these perspectives This is an enormous asset and let's have no doubt That this is actually what is at the root of European soft power Because this intense training in diversity and in a cosmopolitan outlook will then be applied to the rest of the world someone who was brought up in Knowing different cultures from an early age will then be much in a much better position to do different cultures outside Europe as well so it is an enormous asset, but let's Let's try to remember that what is what is being attempted in Europe is to create a Free communication space between different cultures and different nationalities and not to bring them together under One single way of life and way of thinking This is crucial and we have here two opposite goals on the one hand We want to create a free space of communication and this involves integration on the other hand We don't want this integration to mean More homogeneity. We don't want it to mean Replacing 28 different ways of looking at the world with one single way of looking at the world And in some cases this 28 I actually at the regional level also very diverse and that diversity should be stimulated Let me speak a little bit about what what it means to create this this free space of communication and how You actually have to rely on On On a kind of deep integration in order to create it and let's take the example of the banking union, which is of course very important in In Europe right now and of particular significance for Ireland and it's And it's a Exit from the crisis a priority as well for Portugal to build a fully functional banking union in Europe What are we trying to do with the banking union to create? Integrated financial markets in Europe To create a single European financial market And let's not think this is about money In a way it is about money, but it's a lot more than money because financial markets are really machines about Machines that predict the future and that in some sense actually determine that future what financial markets do is to look around And think about what the future what what the future world should look like What goods should be produced what companies should be supported what companies should no longer be supported? So financial markets are always predicting the future and helping shape that future So it's a fundamental importance that you have fully functioning financial markets It's it's not about Me or money What what do we have what do we have in Europe? We thought and I think Quite wrongly and it surprises me a bit that back in 1995 this was not clear to to all people or to most people We thought that having Capital movement free capital movement and a single currency was enough to create fully integrated financial markets And that was clearly not the case It looked to be the case under conditions of credit expansion in the first few years of the era Where every difference was somehow disguised But once we hit the the first bumps on the road financial markets immediately started to fragment along national lines And that was the moment when we had to make a crucial decision Where are we gonna watch passively this fragmentation which was Was starting in financial markets, but would quickly move to politics and would quickly have effects on The other three freedoms of movement Of people of of goods and services In fact, I think in 2011 2012 where at a point where you could start to see the stresses in the single market itself You could start to see companies retreating From other EU markets and because of financial uncertainty. So where we're going to do that or where we're going to Step back look at what was not working and Revise the model of integration in Europe and to all the critics it is important to point out that the EU and EU institutions were able to Take this step back and actually Look at European institutions with that with a critical eye and realize what was wrong Very difficult always for politicians to admit past mistakes and what happened in Europe in the past two years Was in fact that everyone on a whole collectively Was able to admit that the eurozone was built on very shaky and imperfect foundations and Start the process by which those are revised and perfected It's not not not a small achievement to be able to to have that That that exercise of self criticism It's also a good example the banking union of how This space of free communication communication of capital communication of goods communication of services communication of people communication of ideas And even communication of politics as we'll see later on That this this free space of communication doesn't happen on its own It's not enough to have free movement at capital In order to have fully integrated financial markets. You actually need EU institutions You need a banking supervision at the European level you need Banking resolution rules and a banking resolution fund at the European level So let's not make the mistake of thinking that a space of communication in Europe A truly European civil society where there's free movement of ideas of goods of people of capital can be built simply on abolishing barriers, it's not enough to abolish barriers It's necessary to create the institutions that avoid fragmentation and that keep This free space of communication together and in the case of financial markets. These are the institutions of the banking union The situation we had And we still have in to a considerable extent But being corrected is a situation where Financial markets exist Are separated fragmented along national borders This is incompatible with having a single a single currency Because what does it mean to have a single currency? It means that you have a single monetary policy and a single monetary policy since monetary policy is transmitted through the financial system requires By definition in fact requires an integrated financial system otherwise you're going to have a situation which you had And in some respects you still have let's be honest about that a situation where Decisions by the European Central Bank are being transmitted in very different ways to different countries in different regions because they are being Channeled through separate financial systems financial systems that have their own conditions separate from from financial systems in other countries and in other regions It's very clear I think it was clear to everyone to every policymaker and to every analyst about in April 2012 I think this was when we had a common realization that the banking union was was inevitable necessary and desirable You had a situation which I remember Christian no yeah, the the Bank of France government defending I believe here and in your think tank in 2012 You had a situation where let's say two hotels On separate sides of the border and I gave this example many times So you may have heard it before two hotels on separate sides of the French Italian border had the exact same business model the same tourists Staying there The same landscape and they were paying They were paying significantly different interest rates for their loans because one was located in Italy the other was located in France What follows from this well it follows that One one of those hotels is going to be able to Lower prices for its rooms Because he has to pay less in terms of what it pays for its loans Or that it will be able to invest in better facilities This Unfair competition Which is not based on anything having to do with the business model of the firms themselves was of course Going to be incompatible with having a single market and you had to try to address this By making sure that the financial markets are fully integrated and that you only have One single financial market in Europe and that you try to approach a situation where this is where this is the case I think in some respects it has been said by by Mario Draghi The current president of the ECB that this is the greatest achievement since the single currency in some respects I think it is even a bigger achievement Why because This close connections between national political systems and national financial systems are a given of of European political history This goes back to the Medici in Florence in the late 14th century banks and states Grew together in Europe. They supported each other. They have a common history You cannot tell the history of European states without telling the history of European banks Sometimes the influence went from banks to states other times the other way around but they've always been Very closely connected much more than in the United States, for example So the banking union in the way it breaks this connection or at least it makes it much weaker is a break with European history of Really enormous proportions and let's not let's not forget that And let's not forget the the political and social dimension that this has that perhaps the banking union will also help us have Societies that where the links between states and banks are weaker And that is also a valuable achievement for democracy itself in my opinion If you have a society where links between states and banks are weaker So lots of things are changing as a result of the banking union But the most fundamental change is that when it comes to financial markets, we are on our way to to having a Free space of communication fully integrated financial markets and this Is is going to be the first time that we have it because we didn't have it with free movement We didn't have it with a single currency Fully integrated financial markets are based on on on three different Lacks so to speak free movement of capital single currency and and Supervision banking union supervision and resolution at the European level So I do think this is a This is a significant achievement. Let me now turn to The other big discussion in Europe Which was was being developed at the same time as the discussion on banking union and Perhaps now that the discussion on banking union is receding into the background This other discussion will take center stage and this is the discussion about a fiscal union What is a fiscal union a fiscal union is? The attempt or the idea of Creating a Structure of revenue and expenditure that is common collective at the European level That at the limit Revenue public revenue and public expenditure will be mutualized will be common will be shared by member states. This yet is the idea Fiscal revenue and fiscal expenditure will become common You could have a slow movement in this direction you could at first mutualized Some Some elements on the revenue side You could mutualize for example credit that and not mutualized taxes But credit and that are both a part of the revenue and a part of the expenditure when you pay interest So you could just mutualize the debt part. This would be a fiscal union Of course, you would only extend to part of the of the Total expenditure and revenue list, but it would be a fiscal union You could mutualize other parts of the budget you could mutualize for example expenditure on education You could mutualize expenditure on unemployment benefits You could mutualize limited parts of the national budget And leave the rest to member states But in in the crucial aspect every attempt of this sort would already constitute a fiscal union Because the crucial change from a situation where you have now we have national budgets and the European budget is dependent on national budgets Budgets and gets its revenue from national budgets would be left behind and it would be moving to a situation where revenue and expenditure would be mutualized What is the main consideration here you may probably guess by now that that Mental framework that I started with more integration to create a free space of communication But not take that integration to the level where rather than having a free space of communication You have a new state replacing the national states So you have to be in the middle where there's integration to create a free space of communication But there's no integration to create a new state replacing the national states And it seems to me that the fiscal union as opposed to the banking union takes it to to a point where you are in fact Replacing national states with with a European state And that is something I regard with with reservations of course because as I started Explaining I think the great wealth of Europe is its diversity The fact that you have all these nationalities and cultures communicating without borders Because this free space of communication doesn't have borders, but that you preserve differences And where are these differences? Recognized where can you find them? In essence you find them in the national budgets the national budgets are a Reflection of different ways of looking at the world I like to To to remind I like to remember a famous quote by Schumpeter Saying that the national budget is the soul of a country and what he means by this He even tried to develop. I think he was the only one who tried to develop such a discipline even tried to develop a Discipline called fiscal sociology and as far as I know I haven't seen any other attempts to develop such a discipline you start By looking at the national budget and you develop the whole sociology Based on it you start from the national budget and you learn what the country is like how it works What are the different interest groups? What is the balance between different interest groups? Where are the priorities that this country has and I think Schumpeter had in mind something like you know I want to study Ireland give me the national budget and I'll write a book on Ireland and I don't need any other information I don't need to walk outside on the streets. I don't need to talk to people the budget is better than any other source of information And this is taking it to an obvious extreme And when I say this I'm not trying to say that the budget is Everything that matters. I'm just trying to call attention to how important it is and to the subtle differences between countries Which are reflected in national budgets? if this is true if Schumpeter's fiscal sociology is a good idea even if We don't want to take it to the to the extremes that that Schumpeter had in mind if if this is a good idea Then we have to be careful about Replacing national budgets with a single European budget and you know that even during the last week This this idea was was put forward By some influential forces among them the German finance minister That one should have perhaps a Eurozone budget Which will work in a different way from the EU budget and be based on fundamentally different principles and that you should have a EU budget commissioner with powers over national budgets and this would be the first rudimentary steps towards the fiscal union I Am not sure that it is necessary. I'm not sure that it is desirable Because if we believe that differences manifest themselves at the level of the national budget and that you need to leave room for this delicate Very difficult choices between interest groups between different priorities Looking at the pro at the budgetary process at the national level in Portugal on our island. It's difficult It's become a lot more difficult. I'm sure during the crisis But that's a good thing because now at least in Portugal we have the level of scrutiny and discussion about the budget Which is much deeper much more enlightened Everyone is aware of the choices that are being made there and I just hope that this level of scrutiny and public debate on the budget Will remain even after the crisis Because if it had been there before the crisis we wouldn't have had it so Looking at the budgetary process in in member states. You realize how This delicate process national conversation about its own future has to be preserved And that having someone in Brussels make decisions fundamental decisions about about budgetary choices is something that when I try to imagine the future seems to me difficult to make work The whole point of having a commissioner in Brussels making decisions about national budgets would be for that commission to make the difficult decisions Because the easy decisions you can just coordinate You don't need you don't need to have someone in Brussels imposing a certain Direction on national countries and in fact the German finance minister made it clear that this would be a form of discipline Now if having a EU commissioner in Brussels making important decisions and difficult decisions Decisions that are difficult to accept at the national level one may perhaps Expect that people would disagree with them We disagree with these decisions. What is the point then of? Moving them to Brussels to the Commission. I suspect that the point is to make them a little more a little easier to impose They are difficult and we should move them To the EU to the Commission because from there from that standpoint, they will be easier to impose. Well, do we want them to be easier to impose? Do we want those decisions to be made by someone who can't quite hear the protests outside the windows if the decision is really difficult someone who is A few thousand kilometers away and can't hear the protests Is this a good idea? I don't want to give a definitive answer of course We've had processes the United States on top of every other of Progressive the progressive development of a fiscal union And it took more than a century for it to be fully developed But then let's also think about what is being sacrificed because the United States for all its Wonders and I lived in the United States for six years and know very well how Know very well also what American soft power means, but let's not forget that the United States is in the end the nationality and That is a level of homogeneity Which is sometimes overlooked people seem to think that the United States is an extremely diverse country It's not mine. It's not my impression actually that when you when you get out at an airport in In in in Dallas get out in an airport In Montana, Minnesota that the things look roughly the same The United States is a high level of homogeneity. Do we want to to go in that direction? Do we want to have? Do we want Europe to be? Homogeneous place do we want to have a single way of life for all of us or do we want our way of life? To be precisely the combination of many ways of life and the exercise Which is not always easy of being forced to look at things from a different perspective Of being forced to look at things Almost sometimes from the opposite perspective which the European Union is in my opinion really about It's an exercise in cosmopolitanism. It's an exercise in Getting out of our comfort zone Getting out and Getting getting away from what comes easier to us and forcing us to look at things from a different perspective so to conclude Let's Let's try to develop this free space of communication. There's still a lot to do We've achieved considerable results when it comes to financial markets and those are important for all sorts of reasons They are important even at the level of ideas because I don't know I think that Very good ideas will sooner or later find their way into financial markets because they want to be put in practice We have an idea you have a dream about what to do. You want someone to give you money so that you can put So financial markets are also bad ideas But we still have a lot to do We have to defend the free movement of people Against its critics We have to integrate some markets for goods and services that are not fully integrated in particular energy telecom Transport and we have of course and this I will not be able to develop today, but it's also a topic for the future We have to make sure that while preserving the distinctiveness of national Policies and national politics we have To make sure that there is also a free space of communication between politics and policy choices That policy choices are able to communicate among themselves to learn that we're able to learn more from what is being done at the policy level in other Countries that are better coordinated So that we also have an internal market in politics and not just an internal markets in goods capital services And even ideas So there's a lot to do but let's be clear about exactly what we're trying to do and we're not trying to replace The different European cultures and nationalities with an overarching European nationality because there would be a lot to lose If we try to do that. Thank you very much