 Thank you very much, Chairman, and thank you to John and the other organisers for the very kind invitation. I must say that when he asked me it seemed like a relatively easy assignment to respond. Without him standing here it seems quite daunting in front of such a distinguished audience and following two such excellent presentations. So I'm just going to make, and I should say this sort of in a cemetery in my response in that I was fortunate enough to see John's paper in advance, but I hadn't seen Philip's presentation, so I'll probably focus more on what John said and try to integrate some responses to Philip's presentation. So I'm going to begin making just a few fairly general comments and then focus mainly on the example of monetary union, hopefully bringing out some of the themes that both John and Philip mentioned. I should begin with another apology in showing you some economics, but it's very difficult to read John's paper about spillovers leading to the case for collective action without thinking of the prisoner's dilemma game. This is not just a tool used by economists, it's probably the most commonly used tool by social scientists in establishing the case for collective action. The basic idea is that each player can act in a non-cooperative way or a cooperative way, but if it's just left to pure self-interest each player has a dominant strategy to do the non-cooperative thing. And you get bad collective outcomes, and this will often be the case where there is spillovers, one party's action to another. So there's a strong case for coordinating, cooperating, engaging in collective action to get to the good collective outcome. So you can see that the payoffs for each player are higher and the collective payoffs are higher if you can coordinate on those actions. And I think the game also sort of brings out the different aspects of nationalism that Philip talked about. If the payoffs really do follow this structure, from the point of view of national interests, there's a strong case for cooperative action, for collective action, for getting together in something like the European Union. But another aspect of nationalism beyond national interests is national control. So you could actually recognize that your interests lie in dealing with problems in a collective fashion, but you want to retain that control. So there's a sort of distinction between analysis more focused on the consequences, which is related more to the interests, and to the actions themselves, and another distinction within philosophy of the Kantian variety between a more deontological action-focused approach versus something more focused on the consequences. Just picking up an example where the payoffs may be different, and of course an example that's been very much in the news over the last week, and that's the whole issue of the taxation of multinational profits. And this was partly motivated by one of Philip's columns earlier this week. Now he wasn't focused on Ireland, but actually focused on Google, and sort of asking the question, even if Google is following its interests in a sense the particular interests of its shareholders, and also in full compliance with the law, might there be obligations to act in a more collectively responsible way in any regard. So we can sort of turn this around also to look at it from a country point of view. I know Philip is far too polite to bring it up in present company, but we can think about what the payoff structure looks like, and we could actually argue potentially that Ireland would actually be better off in the non-cooperative outcome, not having some collective agreement to have some common corporation tax and a broader common tax regime. But then you can ask the question, essentially like Philip asked in the case of Google, might there be obligations to do the cooperative thing that's better collectively in any case. So I just sort of throw that out as something that might be picked up in discussion, and it would be good to hear Philip's response. Next I just want to pick up on the other question asked by John, which is really who decides. And there's really two dimensions to that who, in a sense, should decide, and who legally has the power to decide. So I've no expertise on the legal side, so I'll focus on the more normative question. And what John is looking at in his paper and in his presentation is having those decisions made effectively by direct democracy, or having them made by representative government. And typically in the European context that's representative government, engaged in negotiations with other governments through councils of ministers, but also of course with key roles of the European Commission and the European Parliament. And I think John brings out sort of very well the vagaries of the direct democracy approach, talks about things such as other issues that are not related to the particular question at issue coming in to the debate and actually affecting people's decisions. So I think we've all seen those vagaries in action. But I do just want to sort of put the other side, and this relates partly to what Philip said about the perception of elites making decisions and leading to a backlash against European Union. And one thing we have seen over the last couple of years is a significant increase in the number of rules, particularly relating to fiscal integration. We had the six pack, which was very much done by agreement of representative governments. Then we had of course the fiscal treaty or fiscal compact, which did go to referendum. And most recently we have the two pack. And though I expect many people in this room will know, I doubt if the general public more generally knows that the two pack came into force yesterday. And significantly affects all of us in terms of the ability of governments to pursue fiscal policies with the most obvious one when the budget has to take place. It will now take place in October. And that draft budget effectively will be examined by the European Commission. And also those various restrictions on countries that are in financial difficulties. So these are big constraints. These are decisions that are effectively made by elites. And I think it raises questions of legitimacy when this builds up. So at least with the occasional referendum. And in many ways sort of impressed by the quality of the debate during the fiscal treaty. And at least it gave people the opportunity to understand what was going on and hear these debates. So while there certainly are risks associated with direct democracy, I think there are risks on the other side as well. And how that balance works out is not that clear. I think there certainly are risks with the path which is mainly the one of representative governments that we're on. So I want to take just another example of the various themes that we've been looking at. And that is the importance of creditworthiness is how it's affected within monetary union. And this is I think a very good example of something that really relates to true freedom of action as stressed by John. So sovereign creditworthiness and particularly international sovereign creditworthiness is critical to freedom of action, particularly when you have a progressive welfare state. When the economy goes into recession, which is going to happen more often when you have a volatile economy such as the Irish economy, the deficit is going to get very large and your borrowing needs are going to get very large. And so there's huge value to be able to smooth your consumption to be able to continue pursuing high return investments and indeed to push a counter-cyclical fiscal policy. So the creditworthiness is incredibly valuable to countries. So how has that been affected by monetary union? Well, one thing that we have seen and I think it wasn't fully recognized in the initial debate about monetary union is that a country, particularly when it has a large debt and deficit, faces highly fragile creditworthiness when it doesn't have its own independent central bank that can act as lender of last resort in extremis. So there's debates about whether the Irish problems with creditworthiness related to underlying solvency, but there's almost certainly sort of a clear liquidity element where you can fall into essentially a bad equilibrium where people begin to worry about default, push up interest rates, making the actual probability of default become a reality based essentially validating those expectations. And this then becomes a significant problem when you don't have this domestic lender of last resort. And I think this is a key distinction between the UK and Ireland in terms of how each country has responded to the crisis. Ireland with not so dissimilar fiscal numbers had a major creditworthiness crisis. The UK did not and much of this I think goes back to the fact that Ireland didn't have its own domestic lender of last resort. In a sense this is a case of a negative spillover associated with monetary union where one of the things that has to happen as you enter monetary union is that you give up this domestic lender of last resort. So here we see what's actually happened to Irish creditworthiness through the crisis. This goes back to 2007 and up until earlier this week and the grey line is the Irish 10-year bond yield. The red line is the German 10-year bond yield and you see this major creditworthiness crisis really erupt in 2010 and actually reached its peak in the middle of 2011. And it was a combination of concerns about the Irish fiscal position and also concerns about the lack of a lender of last resort that led to the spike in bond yields. And then on the improvement side and the improvement as you can see has been dramatic and I think an underappreciated element of the Irish story so far but it was essentially a combination of the Irish government being able to demonstrate that it could undertake the fiscal adjustments required to be in good standing essentially with official lenders who had effectively become the lenders of last resort. And also gradual improvements in the structures of those lenders of last resort including the development of the ESM and also more recently the European Central Bank's OMT programme. So that interaction between that lender of last resort which is a conditional lender of last resort being there and being able to demonstrate that you could meet the conditions has been central to the improvement in Irish creditworthiness. But I just want to end on this. Essentially is another example of spillovers and here I'm just looking at the dynamic between the lender of last resort and the development of fiscal rules. So even at the beginning of EMU where there wasn't really an explicit lender of last resort in place clearly the designers were concerned that in a crisis that they would have to bail out the countries in trouble. And so this is an example of a spillover once you're in a monetary union where one country's bad policies could have implications for you. This was behind the development of certain fiscal rules within monetary union particularly the rules of the stability and growth pact. But I think what we're seeing more recently and I don't feel that this is always appreciated to the extent it should be is the link back from the development of fiscal rules to a strengthened lender of last resort. Because really what the fiscal treaty was about was putting in place rules that would give confidence to develop the lender of last resort and that's something that I just didn't think came out well enough in the fiscal treaty debate. Now it came out in one way in a very sort of explicit way which became known actually as the blackmail clause that you wouldn't have access to the ESM unless you passed the fiscal treaty. But the very fact it was called the blackmail clause showed I think a sort of a misunderstanding of why the fiscal rules were sort of necessary before that lender of last resort would be developed. So we're seeing elements of the dynamic that we saw before. On the one hand these fiscal rules are being put in place externally perceived by elites and I think leading to a backlash against the European project at least with the fiscal treaty debate people had a better chance to understand what was going on. I don't think it came out as clearly as it should have but you can see I think the advantages of engaging people more and having a more legitimate process. Just to pick on just just one final point that actually relates to Philips comment today in the Financial Times where he spoke about the danger of populist backlash and on both sides here there is a danger of populist backlash in the countries facing austerity which are feeling sort of the brunt of these fiscal rules. There's a backlash against austerity generally but partly against the fiscal rules and you see then pressure to ease the implementation of those fiscal rules as we've seen with the extension of deadlines for reaching deficit targets in a number of countries. But we shouldn't forget about the potential backlash on the other side which is the strengthening of the lender of last resort function or more generally the strengthening of fiscal union. If that strengthening is conditional on these fiscal rules being put in place the development of those crucial institutions of fiscal union could be made more difficult and just as austerity is something that we don't want in present circumstances for the Irish economy we also do need the development of that strong lender of last resort to have the continued improvements in Irish credit worthiness that we've seen. So again, attention between the two. Thank you very much.