 So thank you very much for having me over here. I'm always delighted to come back to Ireland. There are many personal and very affectionate memories of people who I got to know here. But the story I cannot resist telling my older son, who is a violinist, in 2007, he's a classical violinist in 2007, he said, I want to learn to play the Irish fiddle. And I said, OK. And he said, I'm going to a town called Dingle in Ireland. And I found a teacher who will teach me. And so he came to Dingle. And by some coincidence, I was here. So I went and visited him in Dingle. And my son, Krish, has grown up to be a very distinguished violinist. He still plays the Irish fiddle a little bit. When he comes to Dingle, he plays in the pubs over there. And we, as the family, have accompanied him many times on holidays to Dingle. So we have a broader family connection to Ireland, which we love very much. So this book is called Euro Tragedy. It is actually out for those of you who want to read it on Kindle. I think it'll be sold in Europe, starting in about 10 days. It's already selling in the United States. And it's a large book. For anybody who has seen it, probably no one in this room has seen it, but it's a large book. It's 670 pages, 480 pages of which are text. And the other 200 are notes and references. Even my daughter-in-law was very impressed. She said, you've got all these references. I said, yeah, I do. So in making these presentations, of which I'm making several, the task has been that I'm not trying to summarize the book because I wouldn't do justice to each part of the book. And so I'm taking slices of the book for different audiences. And telling that one story in as best its completion as I can. And the story that I'm going to tell you today is Europe ended up someplace else. So I didn't realize that I don't know how much of it. So there are not many slides that have text. Most of the slides have pictures on them. But the basic thesis, some of which we discussed at lunch, for those of you who do not remember, there was something called the Werner Commission report in October 1970. The Werner Commission report is the first blueprint of the euro. And in many ways, the euro as it exists today is exactly as the Werner Commission report described it would function. And the Werner Commission report made a very important statement that the euro as a monetary instrument will create the basis for a political union. So it was not just going to be a monetary union. It would act as a leaven for political union was the phrase the Werner Commission report used. At the time, there were other similar thesis which talked about how Europe would fall forward into a political union. The falling forward thesis being that there would be crises. And as Europe stumbled in each of these crises, it would get up and in a more unified, politically unified way, ultimately reaching some goal of political union. And it's in this sense that people would often call the euro a political project. And then there were those who said, this is silly. This will never happen. The first person who said this was Nicky Calder. Again, some of you in this room may know Nicky Calder. He was one of the great economists of the 20th century, a University of Cambridge economist. And he in an almost instant response to the Werner Commission report saying, the euro will divide Europe, will amplify the divergence, economic divergence amongst the member countries. Because a single monetary policy will be too strong for the weak countries, will be too easy for the strong countries. Therefore, the weaker countries will struggle. The strong countries will do better. The economic divergence which exists will get amplified. And he said, as the economic divergence gets amplified, the political divisions will deepen. And Calder ends with this very dramatic statement, the house divided against itself cannot stand. So essentially, the story I'm going to tell you today is a story of how Calder's ghost has continued to stalk the eurozone. Calder was an Anglo-Saxon. So he could be disregarded. So there's a whole process of European thinking that Anglo-Saxons are not quite legitimate. And I'm an Anglo-Saxon too. I'm described as an Anglo-Saxon in European settings because I work in America and I teach at an American university. Therefore, I must be an Anglo-Saxon too. But there were insiders. There were insiders. Very important insider was a guy named Robert Marjolene. For those of you who will remember, Robert Marjolene was one of the key architects of the Treaty of Rome, perhaps the most magnificent achievement of Europe. Robert Marjolene in a 1974 report said this is a really bad idea. And he repeated that several times in 1918, some public lectures in New York in 1986 in his memoirs, he said this is going to divide Europe and it will divide Europe because European nations are not willing to give up the core responsibilities of a sovereign state. And as long as you're not willing to give up the core responsibilities of a sovereign state, which is essentially in this context the taxation authority, the tax and spending authority, there can be no euro that is functionally stable. Therefore, the divisions will continue and the divisions will grow. And therefore, this is not going to end happily. Marjolene also was disregarded. And so you get the euro. So this is Chancellor Kohl, again, for those of you who can recognize him. And Chancellor Kohl is throwing the Deutsche mark into this cauldron of the euro. And the German public was deeply opposed to giving up the Deutsche mark to accept the euro. And so the political bargain in Germany was a bargain that Kohl then stated very directly in the Bundestag, is that Germans will never pay the bills of other countries. So you get the euro on a German promise to the German people that Germany will not pay the bills of other countries. That is the euro that is ultimately constructed because there was no other euro that was possible. If it had not been for that euro, there would have been no euro. I think it's very important to remember that, because there's always an idealized and romanticized notion of what the euro could be and can be. The understanding has to be clear that the Germans have been told for a generation that they will not pay the bills of others. And this is true even up to today, not just in the community of people who support the Christian Democratic Union, but also in the Social Democratic Party. The wide sort of deep understanding amongst the broad swath of German public is that Germans will not pay the bills of others. There's a small group, small elite, that has sort of a very sort of romanticized view of what Germany can and should do. But the broad German public has no appetite for paying the bills of others. And that's why you get all these national stereotypes anytime the Germans have to do something. So I don't know how many people recognize this. This is an American baseball player, Yogi Berra, who is well known for his aphorisms. So if you don't know where you're going, you're going to end up someplace else. He has similar sort of phrases like, if you reach a fork in the road, take it. But I thought this was quite appropriate, that Europe did not know where it was going, and so has ended up someplace else. Where it was going was supposed to be some revision of political union. It's ended up, the Euro has divided Europe in very important ways. So I'm going to show you a number of pictures on what I mean by the phrase, Europe is a divided continent today. And how the Euro has played an sort of integral role to that division. So these are charts of per capita GDP. From 2003, you see three countries, Germany, France and Italy. They're doing sort of reasonably, the Germans are beginning to go ahead even before the crisis. But after the crisis, you see this huge divergence that occurs. And this divergence is important, not just between Italy and Germany, but also between Germany and France. So France has essentially flattened out, whereas Germany has gone up. And you see those numbers mirrored also in the unemployment rates. German unemployment rate has gone down, Italian unemployment rate has gone up, and so has the French unemployment rate. And a very important political feature over here is that the unemployment rates are especially high amongst young Italians and young French. Many of whom, even when they are employed, work in extremely precarious jobs. So the political divisions, the economic divisions that are occurring through this process are then reflected in domestic politics. And the domestic politics then get mirrors, the anxieties of people who are dealing with the crisis in their daily lives. And you then see this again in two other dimensions. If you look at public debt, again you will see Italy, Greece, Spain, France, Portugal, and then you have these so-called northern countries. And in the youth unemployment, you have again Italy is the champion again in the youth unemployment and Greece, Spain, France, Portugal. So you have the divergence that has occurred both in the sort of macro numbers like per capita income and unemployment rate. The debt burdens in the south were already large, went up. The youth unemployment was already high, went up. Whereas whether the so-called north did was already better and either did marginally worse or in fact has improved since the time of the crisis. So the divergence which already existed has been amplified. And exactly what Mickey Calder said in 1971, single currency, particularly at moments of acute stress will create, will handicap the weak and will give greater strength to those who can manage on their own. So the point of this is what I've just said to you that the divergence that we see was not accidental. It was predictable. It was exactly what the economists had said. And at this point in the book I say that although I don't believe that the euro was a political project, it is clear that it was a political decision. It was a political decision which overrode the logic, the economic logic. But economics always has its revenge. And economics had its revenge during the course of the crisis. It essentially at that point overturns the notion that there is some kind of political primacy and the politicians can override it. Just one final word on the divergence. When I say weak countries and strong countries, what do I mean by weak countries and strong countries? And what I mean by weak countries and strong countries is that the weak countries, the weak countries, again the same sequence, Greece, Italy, Greece, Spain, France, Portugal, by the world bank measures of institutional quality and governance quality, always doing worse than the Northern countries. So the weakness lies in the fundamental institutions of those countries, not in some just general amorphous sense. And the economic studies are quite clear. Countries that have these weak institutional and governance features also tend to grow slower, everything else equal. So they're sort of almost in a trap because they have weak governance, therefore they grow slowly, they're handicapped by a single monetary policy, therefore when there's a crisis, they get a particular setback, therefore their ability to politically mobilize to improve their governance, which in theory is possible, is still handicapped. And so they continue to stay in this zone. Also another manifestation of the weakness is in the research and development. So again you see the countries that are in this corner, so this is in 1997, this is in 2016, there's this bunch of countries, and here I have thrown in Ireland also, look at the R&D they do, they basically do sort of bare minimal R&D. And these are the stronger countries who did and continue to do large amounts of R&D. Look at Sweden over here, outside of the Eurozone. So both from an immediate governance perspective, as well as from a more longer term perspective of growth through innovation, these countries remain bound in a low growth zone, and as long as they remain bound in a low growth zone, every time there's an economic shock, the single monetary policy is going to impose hardship on them. Therefore the divergence will grow, therefore the political divisions will continue to remain important and salient. One outcome of this has been that as this economic divergence has grown, the Germans have started looking elsewhere in terms of their trade relationships. So the Germans used Germany's principal traders, two principal trading partner was France in 1999, and the German share of exports to France has steadily declined, the German share of exports to Italy has steadily declined. It has increased to the Czech Republic, Hungary and Poland, the three European countries that are not in the Eurozone, and it is increasing massively to China and to some extent to the United States. So this notion that the Euro will somehow bring, will create a single market and will create economic integration is also relied, because the Germans are not looking to the single market just because there is a single market, and just because you can use the Euro within the single market, they are looking for where the growth is. You sell products where people want to buy them, and where you want to buy, where you see people wanting to buy them are in these countries that are growing rapidly. So Germany's trading links are also growing with the rest of the world rather than with Europe necessarily. And finally, despite the claims of some modest recovery in Spain and Portugal, again I don't know how many of you know the phrase target two, but target two balances are balances within the European Central Bank and essentially is a form of borrowing from the European Central Bank to pay off external lenders. So when the European Central Bank's quantitative easing program began, the Bank of Italy would buy bonds, buy its government's bonds from foreign investors, and the investors at that point would say, thank you, take their money out of Italy altogether. And so Italy becomes increasingly indebted to the European Central Bank to pay off its bond holders and so are Spain and Portugal. The point of this slide is to show you that while the crisis has passed, the lack of confidence in these three governments and Greece is quarantined, otherwise we would see similar numbers for Greece, the sense of financial confidence in these governments remains tenuous at this present time. Okay, so what is the political reaction to this? And the key political reaction during the course of the crisis was that Merkel, Chancellor Merkel in effect, became European Chancellor and she played a crucial role. If Merkel had not been European Chancellor at vetoing and making the key decisions at that point in time, the Eurozone may well have cracked in an important way. So she held the Eurozone together, okay? But having held the Eurozone together, within that framework then led to political divisions. So the manner in which Chancellor Merkel holds the Eurozone together, the Southern nations feel that she is dictating policy on them. And so you have Berlusconi in the 2013 election claiming that he campaigned on this basis, do you want to live in a system where the dictates of Merkel become the governing philosophy of our nation? So the Southerners are complaining that Merkel is being too burdensome and onerous on them. Within Germany, she has the opposite concern, opposite worry that the Germans are feeling that Merkel is doing too much for Europe. And so you have this splinter group called the Alternative for Development, which then is a splinter group from her own party, the Christian Democratic Union, which breaks off and creates this opposition party which has gradually grown in strength. And so you have this political splintering that's occurring at the same time as the crisis is causing the economic divergence. And you then see those that also in the numbers of people losing trust in Europe, the Italians have this very large drop in trust, the French and the Germans. If you, I have these numbers up to 2016, if you do them up to 2017, the German drop has been partially reversed and so has the French drop, but the Italian drop still remains very large. So the rank ordering of this remains the same that the biggest drop comes in Italy, which is where you are also now seeing this so-called Euroscepticism embedded in Italian politics has become part of the process. And so I say, I use the phrase, the economic wounds are creating political scars in Europe. And I use the word scars to indicate that the wounds have lasting effects. In other words, just because the wounds will eventually heal to a certain extent does not mean that their memory and the after effects that they spawn at the time of the crisis will also disappear. Then there is this other notion, well, the economics is divisive, but there is this historical force called the Franco-German friendship. And the French and the Germans always come together at critical moments and they bring Europe together and that will be one way forward. So I did a textual analysis of the use of the phrase Franco-German friendship and what is true is that the Franco-German friendship notion was important at certain periods in history, but it's basically ebbing. And you can trace the relationship between the two countries very much in line with this textual analysis. The Germans have always had a very much more cold and agnostic view of this relationship when it's in their benefit, they use it, when it's not in their national interest, they don't. And to just give you some, again, some highlights of this from the course of the crisis, this was pretty much the relationship between Merkel and Sarkozy during the years 2010 and 11. And this was the relationship between Merkel and Oland. So Oland is proposing all these wonderful things like Euro bonds and so on. And at a December 2012 European Council meeting in Brussels, Hammond von Rompuy, who was the guy right at the back, he proposes this Eurozone budget. Eurozone budget being a large budget that will then be used in some kind of way to ease the distress of the nations that are suffering more during the course of the crisis. And Merkel says to von Rompuy, and where will the money come from? And Oland chimes in and says, don't think of it as a Eurozone budget, think of it as a solidarity fund. And Merkel looks back at him coldly and says, and where will the money come from? And that, I narrated to you the Bundestag speech that Chancellor Helmut Kohl gave in 1998, that essential national interest of Germany remains very crucial to the whole process. And then when Macron was elected, again, this narrative of Franco-German friendship came up. Macron made a lot of effort to propose a certain a new way forward for Europe. He's continuing to do that. So the story I'm now telling you is an ongoing story. So Macron is elected in May 2007. This spike of references to Franco-German friendship in the press suddenly is evident. It dies quite quickly. And then there's another spike. This is the 55th anniversary of a Franco-German treaty in 1963 between Chancellor Adenauer and Charles de Gaulle. And so there are historical moments at which this narrative sort of spikes up. And the outcome almost always is that there is a sort of gross imbalance in the financial strength of the two countries. And Merkel doesn't have to do very much. Merkel's whole strategy through the course of the crisis and continuing as she waits till she feels that there is an imminent crisis. And then the one thing that Merkel seems to have as part of her objective function is she doesn't want the Eurozone to break up under her watch. So if and when it comes to the point at which it looks like the Eurozone may actually break up, then she does the bare minimum needed to ensure that the Eurozone will not break up. But at that moment, the manner in which it is done and the sort of very sort of top-down way in which the decisions are conveyed create this sense of political disenfranchisement amongst nations and amongst the peoples of nations. Very briefly, I'm going to talk about social democracy. So one other sort of last unifying force. So economics causes divergence. The Franco-German narrative in my view is a myth. And the notion of perhaps what brings Europeans together is values, values of social justice and open society. And I think that is very reasonable. I think if there is a true foundation to Europe embodied in the Treaty of Rome, it is that an open society and a sense of equality and fairness in principle is what unifies Europeans. And so the question is, can the social democratic party that espouses such values, can a group of social democratic parties bring Europeans together as a collective in a way that leads them to think that the goal over here is not necessarily economics but it is to strengthen and deepen these values. And the answer to that is that social democracy has been in a near-terminal decline in large parts of Europe, especially during the course of the crisis, pretty much all social democratic parties have suffered huge losses. The SPD itself within Germany is now polling at 17%. And the SPD is a very important party because the SPD in my reading acts de facto as the pace setter by virtue of being German as the pace setter for European initiatives. And the SPD, you know, the sort of some examples of SPD's pace setting, these are tweets by a guy named Martin Schulz who some of you will recognize and Martin Schulz issues these extraordinary tweets in which he says, I want a new constitution for Europe and anybody who doesn't sign on to that constitution any member state that does not sign on will be ejected. And so he has this sort of very eccentric view completely a historical considering that the constitutional treaty was so soundly rejected in 2005 by Dutch and French voters that he will now bring back a constitutional treaty which will potentially eject France and the Netherlands whose voters will almost certainly again vote against such a treaty. On the other hand, the German finance minister Olaf Schulz who is also a social democrat says a German finance minister is first and foremost a German finance minister who needs to look after the interests of Germany and Europe then comes within that context of Germany being the primary objective. The party does not matter, any German finance minister is primarily a German finance minister. Just two or three quick slides and then I will stop. And the final theme is that this division of Europe is coming within a broader context of Europe as a declining continent itself, declining in the context of the world. And you can see a few very quick slides the share of German GDP increased in the early part of the 20th century. So in the later part of the 19th century the share of German GDP increased, flattened out and even German GDP has steadily been declining. France has been on a decline since 1870 in terms of its economic strength in the global economy. The financial crisis gave the Eurozone another setback. The US economic recovery primarily because of much better policies was quite rapid after the so-called Great Recession. The Eurozone economic recovery, which is well known to all of you, has been very modest. And Eurozone economic recovery has been modest even in relationship to the same countries during the Great Depression. And this final slide is, if I look ahead, what is one leading indicator that tells me what the future of the global economy is? And these are patents registered in the US patent office which is the most demanding of the patent offices. And in 1995, the Koreans had, between half and one third of the patents of Germans. And today the Korean patenting is twice that of Germans. France and Italy have remained flat. French and Italian patenting has remained essentially flat for 20 years, 25 years. And the other country that is growing up rapidly is China. And behind these patents lie much stronger R&D systems, much better educational systems. So the East Asian economies are preparing in a much more robust way to the challenges of the next 50 years in terms of the kind of knowledge base a modern economy will need relative to the European countries. Therefore, if you put it all together, the decline that we have seen in these last 50 years will, if anything, accelerate over the next 50 years. And in a context of general decline, the divisions become politically even more difficult to handle in a period when there is growth and there is a general sense of optimism, the ability to handle divisions is much better. But if the decline and the divisions come together, it becomes even harder. So that is why I call it a tragedy. I call it a tragedy because it need not have been. There was no good reason to have the Euro, but once it came, it worked its inevitable logic. The logic of division, it has hobbled many of the member states, created political divisions. And as I say, it's a tragedy in the sense that Aristotle might have used the word tragedy that eminently could, and just people, enacted the Euro tragedy, not because of vice or depravity, but because of frailty and error. So I'm gonna stop over here. I'm sure that especially to this audience and given my own background, there'll be questions on Ireland. But may I request that we first talk about Europe more generally, and then I promise that if there is an interest, I will give you a few of my views that are expressed in the book on Ireland and its role in the Eurozone. Thank you.