 Yeah, so since since my since I'm the most controversial person on this panel I like to show some pictures. Otherwise the facts are contested So this is the only only slide on which I have words the rest are all pictures and The the main point of this slide is that the warnings came very early in March 1971 very soon after the original proposal on monetary union was made in October 1970 and Nicholas Calder who was one of the great economists of the 20th century was the first to say That the single currency would amplify economic divergence I think that it's a simple Economics is that a single monetary policy will be too tight for some countries to week for some countries The weaker countries will be further set back and the stronger countries will have added benefit Therefore the divergence will increase There was a statement at that time that well, that's fine. The architecture is incomplete But eventually we will form a political union and we will create fiscal transfers of the type that you have in the United States Where the state of Connecticut? Transfers funds to the state of Alabama Similar things would happen Calder said I doubt if that's going to ever happen Because it would require permanent transfers not just Temporary transfers and he said on the other hand what I do expect That the economic divergences will deepen political divisions and the house divided against itself cannot stand This is in March 1971 Robert Margellain through the rest of the 70s Robert Margellain is a name known to this audience one of the great bureaucrats of the post-war era a key catalyst of the Treaty of Rome He was very opposed dead opposed to the monetary union because and he gave the reason he said the nation state is still alive And he said that because the nation state is still alive the idea that there will be compromises That will allow the creation of some kind of political structure Within which the compromises can be made and a political union can be created He said was simply not going to happen and therefore he opposed the monetary union even though he was a very deep pro-european and Indeed the rest is basically the story is that Calder's ghost and Margellain's ghost have been have been since stalking the Eurozone So you see that this great divergence that occurs the Italian per capita income today is Marginally lower than it was in 1999 at the time of the start of the monetary union France since the start of the crisis in 2008 has barely grown Whereas Germany has continued to grow at critical junctures This is exactly what Calder had predicted that the divergence will increase Because the divergence has increased Germany is trading less with France and Italy that were its principal trading partners in the At the time of the euro Germany has increased its trade especially with China But also with non non euro European countries like the Czech Republic, Hungary and Poland This undercuts one of the one of the fundamental premises that the euro will increase trade between Eurozone countries and therefore will be a spur for for for growth So it undercuts the essential argument that the euro does something good in terms of the growth effects The risks however remain profound So you see the Italian situation the Italian per capita income has fallen a young college educated Italians are leaving Italy in growing numbers Because a young educated Italians are leaving that further reinforces Italy's low growth trap Calder's political forecasters also coming correct that the economic divergence will then deepen the political divisions You see that loss of trust in Italy is greater than in France and greater than in Germany In in 2012 in the crucible of the crisis you had the formation of the AFD party The alternative for Deutschland party in Germany and the five-star movement in in in Italy They were an exact consequence of the political divisions AFD felt Chancellor Merkel is doing too much for Europe five-star felt the Chancellor Merkel is dictating to Europe Looking ahead my my theme is that the European Central Bank has reached The political limits of its actions and therefore it is rapidly losing credibility We saw that for the first time in 2012 and 13 when The eurozone was descending into what people call low flation or deflationary tendencies Normally inflation low inflation is considered good, but when inflation becomes too low There is a worry that people Anticipating the low inflation will tend to postpone their consumption which will reduce growth which will then make debt burdens harder to bear the Americans the Americans were much quicker and So you see the divergence you see in the red line is the eurozone is stuck at 1% Within that Germany is 1.6 and Italy is even lower The European Central Bank continues to predict inflation will go up. Those are the dotted lines the hard line is the Is the actual inflation so the the credibility the the between the actions and what it delivers is remains very vast In the next few Months we may well have a Crisis you see Italian growth is rapidly slowing that is the green line as world trade slows European countries slow Italian slowdown is most pronounced Italian Interest rates are rising rapidly Italian bank stock prices are falling the combination of weak growth rising interest rates falling Stock prices is a potent combination that could push Italy into an unmanageable crisis That always remains the hope of a savior and when McCron became president in 2017 He was quickly anointed savior, but here is where Marjorie Lane's ghost Continues to stock sovereignty barrier is stronger than ever before The divergence between France and Germany remains important The last time the French initiative led to a constructive European political outcome was in May May 1950 at the time of the showman declaration Since then the interests have diverged and the ability to come together has been Extraordinary difficult so I end there to say that The euro has been a source of division and will continue to be a source of division Because the interests are Naturally Different the incentives to what Joe calls completion of the architecture will always be stymied There will be technocratic solutions which will lack political legitimacy and because they will lack political legitimacy There will be either half measures or in the worst circumstance they will fail when they are most needed so I stopped there and Joe Claude can say why I'm completely wrong For sure for sure, but before that it be asked you one question Why do you ascribe the difficulties in Italy to the euro? No, so so I'm glad you asked me that question I do not do that. I do not do that What I say is that a weak a weak country will be in a disadvantage in a single monetary In a in a zone that has a single monetary policy. Well, you mentioned Caldor who said that yes And you so to use it as a basis and then you presented the evidence Suggesting that the you know the euro one was one of the reasons or the reason What I say is that the Italian problems are Italy's problems They that the fact that Italian Italy cannot generate productivity growth is an Italian problem But the fact that it cannot be value its currency is a euro zone problem And you even you bring the two together a country that is has negative productivity growth and cannot devalue Then you have an Italian problem. That is that is the point I'm making