 Before I get into my three points today, I just wanted to start by making a few comparisons between Finland and Ireland, because I think we're very much alike in many ways. We are relatively small economies, we're prosperous economies, we're economies that merged from being perhaps something around a top 30 or top 40 in the 1970s to being one of the top five in the world nowadays. We're very competitive, we like to drink, we have big eastern neighbors, which have provided us with some hassle on occasion throughout history, but most of the time we've gotten along quite well. We're open societies, we're liberal societies to a certain extent. We're traders, we're a society where our home market is way too small. We've always seen the benefits of European integration, that's why we're also fundamentally pro-European nations. We're a very pro-internal market and we get our benefits from the US as well, be it in agriculture or something else. So we have a very similar approach, I think, to European integration. It's also a non-sense approach, it's not necessarily an ideological approach, it's more of a pragmatic approach. Now Ireland, of course, in the past few years have been hit hard, I mean the Celtic Tiger, if you will, and there's no denying it. We understand what happened, we have sympathies with what happens, we appreciate all the efforts that have been taken in Ireland throughout this crisis and all the sacrifices. And we actually use Ireland as the positive example of this crisis. It was the first country to come sort of back to the markets, at least testing it, and it will be the first country to come back to the markets, second one most probably being Portugal. It's a prime example for us at home to say, look, what we did was the right thing at the end of the day, it paid off. There's one thing I wanted to say here before I really kick in, there's been some sort of misconception about Finland's position in the European Union lately. You know we're in this vicious spiral, politicians talk loose, the media interprets that loose talk and the markets then interpret what was allegedly said. And there's been a lot of talk about Grexit in the Greek part or fix it in the Finnish part. Let me show you one thing today, and that is that Finland is 100% committed to the Euro and developing to the Euro. It is in our interest, it is the decision that we took some 15 years back when we actually decided to join the Euro in the first stint. Now what I'm going to talk about today are basically three things. First about the financial crisis or more specifically banks and the banking union. Thirdly about the markets or the debt crisis, basically growth. And then thirdly about institutions and what we should be doing in the foreseeable future. My starting point is a quote from Monet who said, I quote, people only accept change in necessity and see necessity only in crisis. By the way he said this about the U.S. banking sector in the 1920s, not about the European Union. And my message is also that there's no easy solutions, no miracle cures, no silver bullets. But I will try to make a case that we're starting to see light at the end of the tunnel. We're starting to see light at the end of the tunnel, we're starting to see light at the end of the tunnel of the Euro crisis. And if we take the right decisions in the next three months, moving up to the European Council in December, I think we will have turned the worst corner. The speech itself, we have worked on it. It has been written down, but I will be speaking freely. But the speech will be distributed to you afterwards. And all of the wonderful quotes that are in that speech are good. My ghost writer is actually sitting here to the right of me, Jukka Salavara, who is our director general. And we've been working together with my advisor, Satu Keskinen, who is here as well. The great thing with the ghost writer is that he actually knows exactly what kind of expressions I use and my quirky English, how it works and so on and so forth. The speech itself is quite funny, I don't know if I can assimilate it here. Okay, so I'll start with point number one, then, the banks. Well, I would argue that it, of course, the crisis all started with the banks and especially with the bankruptcy of Lehman Brothers in September 2008. Pretty much, well, 10 days and four years ago. And I think we did a big stake in the beginning and I shouldn't probably be telling this to you because you laugh at me, but I think at the time we should have had more stringent stress tests. We should have had more recapitalization and more resolution. We should have basically killed off quite a few banks in Europe at the time. That's exactly what we did in the early 1990s in Finland when we had a severe banking crisis. A similar one that there was in Sweden. But perhaps in 2008 with the banks, there wasn't the Monet necessity feeling. There wasn't a feeling that, well, the crisis is, I remember one of the first statements that came up, oh, it's just an American banking sector crisis. Don't worry about it. So there wasn't this sort of sense of urgency and that was probably the biggest problem that the banks had. The biggest problem that we had. Now, is it all the fault of the banks? Of course not. But I'm trying to say that it all started with the banking sector. And when I tried to explain at home about the crisis and the cost of the crisis, because you can imagine that voters, much as they do here in Finland as well, are posing questions. Our voters are saying, why do we have to bail out countries or banks or why do we have to establish rescue packages for countries who have not necessarily followed the rules of the eurozone? Take Greece for an example. I say, listen, look at what happened in 2008 and subsequently in 2009. In 2009, because of Lehman Brothers and the market may have that followed, our economy plunged by 8%. The total loss of exports and others for us have been estimated at about 40 billion euros. 40 billion euros. That's a lot for a country which has a GDP of 190 billion or an annual government budget of 55 billion. And I said, had we not put up the different mechanisms that we've done, EFSF, ESM, rescue packages for Ireland, for Portugal, for Greece, et cetera, we would have probably plummeted into a similar situation in 2010. So it wasn't only a fault of the banking sector. Now, my first piece of good news, of course, is that the Commission has come out with a very ambitious proposal on a banking union. And the idea there is to follow three steps. Step number one, you create a banking authority and link it to the ECB. Step number two, you start collecting money from the banks for a crisis fund. And step number three, you move on to deposit guarantees. And what's the good thing about this? Well, the good thing is that it breaks the link between the bank and the sovereign. And to a certain extent, one could say it federalizes the system or at least pushes it into a similar direction that you have in the United States. Now, the big debate that we will have is should it entail all banks in all EU countries or not? Our take is that it should. It should hug or bring with it all European banks, about 8,000 of them. And it should cover the whole EU area, not only the Euro area. We might have a couple of debates about this with the Brits or the Swedes or the Danes, but we'll see how those debates at the end of the day pan out. Another question is, where do we have this banking authority or supervision authority? Do we link it to the ECB or do we let it somehow float separately? Our argument is that it should be linked to the ECB. There's one important caveat to all of this, especially for us up in the north whose banks are right now in healthy shape because, again, resolutions were used in the early 1990s. And that is that we start this banking authority on a clean slate, that we start from scratch. We start from zero. We do not want to be in a situation whereby good, sound, viable, well-managed banks have to pay for the buck for those banks which haven't taken care of themselves. We'd much rather let those banks go and then start from scratch. Whether that will work out or not, I do not know. The second point then after banks is about markets. Now, it's of course quite clear that while we've been in this crisis, we focused a lot on the short-term crisis management, whether it's packages to member states or new crisis mechanisms in the form of EFSF or the European Stability Mechanism ESM, but we haven't focused enough on the classic issue growth. My take on this is that we should be looking at the period of foreseeable low growth in Europe. We're not going to reach the levels of the merging markets or the growth markets. I don't even want to throw out an estimate because they keep on changing every week, but somewhere between negative growth or zero growth to 2 percent next five years, that should sort of be fairly good growth for us here in Europe. But it's quite clear that growth is the key. And though I'm probably ideologically somewhere between Smith and Keynes, you know, typical Nordic welfare state capitalist, if you will. I believe in the Nordic model or Nordic capitalism. In terms of economic policy, I think we have most certainly come to the end of the road whereby you can have deficit-driven growth. I mean, it is absolute rubbish to think that governments can be pumping money in order to stimulate or establish growth. There is nowhere from where we can stimulate. And I'll be very frank with you. I'm sick and tired of some of the, and I'm very pro-American, by the way. I'm sick and tired of some of the American economists giving us advice about the endless money supply chain. I mean, it's ridiculous. And let me just tell you that, or perhaps post a question, do you know who advised where the closest economic advisors of then Prime Minister of Greece, George Propandreou in 2007, 2008, or 2008, 2009? Stiglitz, Krugman and Sacks. Thanks, guys. You know, I'm, of course, not blaming them. But the bottom line is that deficit-driven growth, I think, is a joke. And we cannot have it. So what should we focus on? I think if we had a European bumper sticker, it should probably read, it's the market stupid. It's competitiveness. And how do we get competitiveness? I think on three accounts. One is structural change at home. You know, dismantle all the rubbish that we have. Get more flexible labor markets. Don't or stop, at least, protecting your professions. Cut the red tape. Get rid of poor administration. Get rid of poor competitiveness. And that's the structural changes that we need to do at home. Number two, we need to keep on pushing for the internal market. And here, I'm really looking forward to the Irish presidency and the digital single market. What happened in the digital single market or has happened is that the U.S. has a single digital market, whereas we have 27 separate digital markets. By the way, if I could, I'm also the minister of trade. Wonderful. Nokia Lumia 900. Works like a Ferrari. And what we need to do is we need to have a genuine digital single market that actually works. The reason that we were so good in telecommunications in the early 1990s was that we established a common standard, the GSM standard, when in the USA, in the U.S. you still had your AT&T's and southern bells and all of these separate things. And when we had our wonderful Nokia's, they had beepers. Remember? You know, someone's calling me and then you had to go to a pay phone. You know, I mean, the bottom line is that we did the right thing at the time and we need to do it again. So we need a digital single market. Finally and thirdly, apart from structural change and the single market, we need free trade. And I already spoke about the free trade area between the United States and the EU a couple of years ago at Chatham House. And I keep on insisting on that point. It's not going to be easy because of agricultural products, et cetera, et cetera. But given that we're not going to get a multilateral worldwide global trade network through the WTO, we need to focus on plurilateral agreements and then on the EU side we need to focus on specific bilateral free trade agreements with the United States, with China, with Japan, with Canada. Of course, we already have some with countries such as South Korea. I also, by the way, think that at the end of the day we need a free trade agreement with Russia, which would quite benefit us. But remember still that the Russian economy is 3% of the world economy versus the US, which is 2223 versus the EU, which is 2627, pending a little bit on the year and the way in which you calculate. But nevertheless, free trade. Now, there's one thing that I don't like about this whole debate, and I'll say this in conjunction to the markets, it's almost a nasty debate. It's the division to north and south in all of this. And I've said it out publicly before, I do not want us to erect a new Berlin wall. We already had a split between the east and the west on ideological grounds. We do not need a split between the north and the south on whatever grounds. And I think it's very important for us Northerners to understand that it's not exactly like we were in good shape 20 years ago. Finland and Sweden in a banking crisis. Denmark and the Netherlands not exactly the most competitive economies in the world. And Germany considered to be the sick man of Europe. So things can change quite fast. And I think that we are in this boat together. But this whole idea is that we are the beer drinking or steer chaps versus the wine drinking slacks. I don't think it works. I really don't think it works. And we have to be very careful with that. I, for instance, think that Spain and Portugal are not necessarily in a bad shape. Yeah, people talk about youth unemployment. But look at the figures and the way in which they calculate. Portugal and competitiveness not looking bad necessarily at all. So on the market side, I think we've reached the monein necessity of taking the right decisions. One on structural change at home. Two on the single market in Europe. And then three on free trade. The third and final point I wanted to make today before Q&A and before the half an hour is full is on institutions. And here I'd like to make the following points. The first one is that don't forget what we have already done. I think that the governance of the euro is improving. I'm not saying that we have already an economic union next to a monetary union, but we've already done a hell of a lot by necessity through this crisis. I know that the finance ministries around Europe, they're kicking, screaming, shouting, crying, begging for there not to be any more pooling of sovereignty. But we are moving in the right direction. Six pack legislation and two pack legislation. Who would have thought five years ago that we'd be sending additional budgets for comments to the European Commission. And the European Commission can take action. That was science fiction at the time. Some people don't like it. I love it. Why? Because we have fairly sound public finances. Do we get a few comments from the commission? Yes. Should we take them seriously? Yes. It's always good to get some outside help. It's not about instructing how you use your budget. But it's a good leverage for getting budgets through at home. Another interesting thing that's cooking and brewing right now is of course the Fanrompe report. Sorry, it sounds like European jargon. But it's the report that is being put together about the future of the Euro. And it's being put together by the President of the European Council, the President of the European Central Bank, and the President of the European Commission. And that's a debate that I think we should follow. Now our government, we don't have a national position on this yet. We've started a set of seminars inside the government, you know, five times three hours just sitting down and talking about it. So what I'm going to give is just a couple of reflections. Now the report itself, I think last Thursday or Wednesday, I think it was. And you can find it on the internet. It's put into four different categories. One is the banking union. I think this is very manageable and achievable, and I already said a few words on that. We're definitely in favor of that. The second one is on economic governance or economic coordination. I think there are a lot of good elements in it, but not too much. The third one is on a fiscal union. How do you handle debt? How do you handle budgets? I think there are good and interesting elements there as well. And then the fourth one is on democratic control. Now here on democratic control it's quite difficult to take radical changes without intergovernmental conferences, but I'll get back in a second. I think that right now a lot of people are talking about the democratic deficit of the euro. Though I'm a very strong and avid pro-European and I quite frequently use the F word even, I would say that we need to have better control of the euro through national parliaments. And some governments or some national systems have that. That doesn't mean that I'm trying to push the European Parliament out. No, I think the more the ECB becomes like the Fed, the more the European Parliament will somehow be involved. But the bottom line is that still for legitimacy there might be a feeling back home that national parliaments should have more of a say. And they do. It's not easy for us, so let me tell you. But that's part of the democratic process. I also like the ideas that are uploaded right now that the European Parliament or the party groups, EPP, ALDE, PES, etc. will be nominating their candidate for the European Commission President before the next elections. And I think this all creates a public space. I think it'll be much more fun when we're talking out on the election trail about European candidates for a certain post that they decided inside the European Council. Now, there's however one thing I wanted to make clear and I think if there's one place where my message will be well understood here in Ireland, I think the method of traditional treaty change, in other words intergovernmental conferences have come to the end of their road. And it would be virtually impossible to push through treaty change. And I think it actually might put the focus on the wrong foot. I liked a lot of the stuff in Barroso's speech, but the focus on we will need treaty change is the wrong one because suddenly you get my kind of institutional nerds coming out of their closets and focusing only on high fly when we have something probably a lot bigger at hand. So once we start moving now with the changes it's going to be very important to look at what you can do without treaty change. A lot has already been done, as I mentioned through legislation. Secondly, is there something that we can do outside the treaty and bring it in through legislation later on? Like for instance the fiscal compact on which you had a referendum here. So we need to be quite innovative, but I will find it very difficult to push through an IGC at this stage. If we call upon a convention which is required, if we go for a transfer of competence, then it's going to be very difficult to limit the agenda of that convention. And once it starts to blow up no one is going to be able to control it. Once no one can control it it will really balloon out and then it will be pushed into referenda in various countries and it ain't going to fly. And again because of institutional change we probably create a negative spiral. Now, I'll finish off by saying just telegraphically 10 reasons why I think there is hope and light at the end of the tunnel. And I'll do it telegraphically. Why do I think that the worst of this crisis is over if we play our cards, right? Remember by the way that we have three consecutive European councils usually actually the peak of the crisis always happens to take place when we have a European council. There is a wonderful empirical correlation here but nevertheless the first European council we have in one month on the 17th and 18th of October and that is going to I think focus on the banking union. The second European council that we have is in November 22nd and 23rd and that's on the multi-annual framework MFF. We'll try to fix that. And then the third European council will take place in December and I think that will be the one which then somehow defines the path on the future of the Europe what needs to be done. This is of course if everything works out like in the movies and no countries need mega bailouts and so on and so forth but the ten reasons I'm fairly optimistic right now. One, the action of the ECB two weeks ago. Two, the elections in the Netherlands. Three, the decision of the Karlsruhe court on the constitutionality of the ESM in Germany. Four, the commission's proposal on a banking union. Five, Barroso's speech in the European Parliament State of the Union which I think was quite bold. Six, the Fundrompe report on the future of the Europe. Seven, the multi-annual framework negotiations which I think and I hope will be finished in a couple of months. Eight, the fact that Ireland is the first country which is carefully coming back onto the market after a difficult period. Nine, the economic outlook which is not as catastrophic as a lot of people make it out to be. And then ten, I think coming back to Monet a lot of countries have seen the necessity of change in this crisis and because they've seen the necessity they're actually doing those changes. Does this all mean that everything is going to be perfect? The sun is going to shine as it obviously does here in Dublin very frequently? No, it doesn't mean that. But I'm saying that we really need to stop this gloom which we've been involved in for the past few months and look at the bright side because if we work on this crisis together I think we'll come out of it. And a final point, we should not compare this crisis to the good years in the beginning of the 2000s. We should compare it to the early 1990s. We should compare it to the oil crisis in the 1970s and we should compare it to the 1930s and the depression that followed. This is what I wanted to say first of all on Finland and Ireland but most importantly first on banks, second on markets and third on institutions. And now I'll be more than glad to go for Q&A.