 It's very nice to be back here. I was in this room about three and a half years, maybe three years and a few months. In late 2010, shortly after becoming the CEO of the EFSF, and I think shortly before, Ireland made the request for the first EFSF program. At that time, I mainly spoke about the Watson Recting report, and I would say that since then, Ireland has come a long way. I will say a few words about Ireland later in my presentation. But first, I want to put it into the broader context, talk about the Euro area as a whole. Because the title is, I hope you can all see the slides. Maybe it's a bit difficult from that side. Is the Euro crisis over? So I will talk about that first before moving to a few words on Ireland. And I'm also happy to answer your question. Indeed, I have answered already a few times the question on retroactive application of direct bank recapitalization this week. I had a press conference with your finance minister earlier this morning. The question, of course, came up. And then I met the governor over lunch. So it's good to be here. Mainly, I'm here to celebrate the exit of the Irish program. Ireland was the first EFSF program. Everything went smoothly from our perspective. It began with the first disbursement on the 1st of February, 2011. And it ended with the last disbursement on the 4th of December, 2013. And the 10 disbursements we had were all more or less on the timing anticipated in early 2011. All the reviews went smoothly and on time. So this is really an example for other countries in Europe to follow. But back now to the overall situation. Ireland has made most progress. But also the Euro area as a whole, of course, is in better shape than a year or two or three years ago. And this is the result of all the different elements of the crisis response that have been adopted during those years. It's not by accident. It's not just the mood swing in markets. Although markets do have mood swings. They are volatile. They tend to overshoot their third behavior. But there's good reason why the mood has improved. It's not only what the ECB has done, as I often read in the media. That played an important role. But it's not only that. And let me explain to you how I see if I can move this. That's the moment I cannot. OK. So here I put on one slide the main elements of the strategy adopted to fight the Euro crisis. It's all complicated. And I know that many of you have the impression that things happen very much at Hock, late night meetings. And it's not easy to understand how it all hangs together. But one can put the different decisions that have been taken under four main headlines here. And the first one is what has happened at the national level in the countries that ran into problems, like Ireland and the other countries. The adjustment at the national level, that's really the first element. It's a core element, because the progress in that area is indispensable. Only if there's sufficient progress in this area can we really hope that the crisis is over. The second element is at the European level, the different rules and frameworks we have to coordinate economic policy in the Euro area. And you know there's always been the criticism from academics, particularly in the US that monetary union just cannot work when you have totally centralized monetary policy, one interest rate, but decentralized fiscal and other economic policies. Our response to that is it can work, but it needs to be well coordinated. And with the new rules we have in place, this is now much more possible than ever before. The third element in the crisis response is the move towards banking union, work against the fragmentation in the banking market and strengthen the banking system in the different countries. I will talk about that. And the fourth and final point is the creation of new institutions, financial backstops. This includes the EFSF and the ESM that I had. It also includes what the ECB is doing, using instruments that were never used before the crisis, including the OMT. And as we are moving slowly out of the crisis, the last element is here called focus on growth. We have the energy again and can again focus on what economic policymaking is all about, namely generating growth and employment. So let me say something on these main elements of the crisis response. I start with the adjustment at the national level. And of course, you and I didn't know a lot about that because you have gone through that national adjustment. It needs to continue, particularly on the fiscal side. Different countries are on a different phase, but we do see significant progress in all the five countries that have borrowed from EFSF and ESM. On this slide you see what has happened on competitiveness. Competitiveness was, or divergences in competitiveness was one reason for the crisis. You can see here, if you can read it from the distance, unit labor cost in the different countries. The bottom line is Germany as a benchmark, and it could also be Finland, Austria, and Netherlands. It's basically Northern Europe. Fairly stable unit labor cost initially. Or this is cumulative since the year 2000. Why is the countries that's periphery had increases in unit labor cost far above the Northern European countries? So salaries and wages went up much faster than productivity gains. And at the peak in 2007, the Irish unit labor cost, Ireland is a gray line, was about 45% higher than the German level. That was not sustainable. It also led to very large current account deficits, which you see on the right-hand side. In some countries, the current account deficits went up to 15% of GDP. Ireland, it was only 5% of GDP. That, again, not sustainable. So something had to happen. And the turning point in the development of unit labor cost, you see it very well on this slide, happened before Lehman. So not everything was triggered by the Lehman crisis, or the global financial crisis. At the European Commission, where I was at the time, at the IMF, COCD, these developments, of course, were monitored. It was not a surprise. It was clear something had to be done. And the countries began to adjust cost and prices in early 2008. And you see that during the last few years, unit labor costs have been falling rapidly. And all those countries that borrow from us, all five of them. And it's quite interesting, for instance, that the Greek line, which is the light blue, will intersect with the German line this year. So which means that that measurement, according to that measurement, Greece will have eliminated its problem. Of course, there are many other ways to measure it. This is only one way, but it is an interesting phenomenon. All countries have eliminated their large countercount deficits. Several have moved now to countercount surplus. And this is not only because imports obviously decline when GDP declines. All the countries that borrow from us have been growing their exports quite significantly. You know that in Ireland, definitely. And this is remarkable because it's happening why the world trade growth was rather limited. So the global environment was not very favorable. So that's uncompetitiveness, which was a key element. This is on the fiscal side, where we also see significant results. Again, you know that quite well, but it's happening in all countries. All European countries are reducing their deficits. There's a plan agreed in the Ecofin Council and the Eurogroup on every country, the speed at which they are supposed to move their deficit below 3% of GDP and ultimately to a balanced situation. The structural sense, the fiscal balance, should be balanced. And because European countries are making significant progress, you see on the right-hand side that the Euro area, which is the top blue line here, has an aggregate fiscal deficit, which is only half as big as the fiscal deficit of the US, the UK, or Japan. So that's the first element. Countries are making significant progress in their adjustment. It's not over in most countries. It must continue on the fiscal side with structural reforms. It differs country by country. But those five countries that do borrow from us with conditionality, they really make this progress. And that is, I think, for me, the core explanation why the Euro crisis is calming down. The second element of the crisis response is what's happening at the European level. Better economic policy coordination in the Euro area. There are many, many rules that have been redesigned, tightened, made stricter, and also totally new concepts, new frameworks to deal with issues that we didn't deal with in the past in a systematic way. As you know, through the stability and growth pact, there was always a focus on fiscal policy. And that's not wrong in a monetary union because fiscal policy in one country has an impact on neighboring countries. But we learned in the crisis that this is not enough. One also needs to look at divergences and competitiveness needs to look at, not only public debt, but also private debt at credit cycles, at real estate bubbles. All this is now covered by a new procedure called excessive imbalance procedure that tries to capture all these elements, recommendations from the council to the country, and even the possibility to impose sanctions if a country does not follow these recommendations. On the fiscal side, it has become much tighter. Stability pact has been strengthened. The role of the commission has been reinforced considerably by changing the voting modalities in the council. If you know the European Union how it works, for a proposal from the commission to become European law, it needs a qualified majority in the council, and then often also consent of the European Parliament. In the area of the stability and growth pact, what has been changed is that a proposal from the commission becomes European law unless there's a qualified majority against this proposal. And that strengthens the role of the commission considerably because in the past it was relatively easy to organize a blocking minority if countries didn't like the proposal, if they were the sinners. But to organize a qualified majority against the commission, that's almost impossible. So commission is much stronger, and in these areas of fiscal policy, the commission has normally be on the right side, on the right side of my view. So that's an important aspect. We also have European semester, we have the fiscal compact, all these complicated rules, but they all have one objective, to coordinate earlier and better between the different countries so that spillovers are avoided, negative spillovers coming from certain fiscal policy action. And to talk more about this, the final responsibility remains with the national parliaments that adopt the national budget, but they do it after a long process where all the other partners, the other countries, the commission, the ECB, have given their view. So the national parliaments know much better what they are doing. So that's the second element, much broader and tighter economic policy coordination in the Euro area. The third point is the banking system. And again, it differs country by country, but Ireland is one of the examples where the banking system contributed greatly to the crisis. Of course, the origin was the real estate market, which was financed by the banking system, so it went hand in hand. In other countries, there are very different reasons for the seriousness of the crisis, but in all European countries, it is necessary to strengthen the banks so that they can after some time start lending again. We see in this crisis a re-nationalization of banking, a fragmentation of the banking market, and this is a reversal of what we saw the earlier years of the crisis. We saw, and that was one of the reasons for creating the Euro area, we saw more financial market integration. That was one of the desired hoped-for effects. This is partly being reversed, and of course, we want to stop that. And we want to go back to a system where comparable borrowers pay fairly comparable interest rates. At the moment, we have a situation where not only the sovereign pays very different kinds of interest rates on their borrowing, but also private borrowers, corporates, households. And there are examples like two hotels, one in Austria, one 10-kilometer south in northern Italy, maybe very comparable hotels with very similar credit rating, but the one in Italy pays three or 400 basis points more on its bank borrowing than the hotel, the competitor in Austria. That's what we want to eliminate again. That's why we are talking about the banking union, and that's why many steps are being put in place now to create, again, an integrated banking market. Let me mention a few points. Already two years ago, three new European supervisory authorities were created for banking, insurances, and securities markets. There's a new early warning system called European Systemic Risk Board, ESRB, with the mandate to watch and monitor macro-potential risks. This sounds very complicated than it is, but it's a key lesson from the crisis. Macro-potential risks were not well-covered and were partly, or to a large extent, ignored. Other countries also established new institutions to monitor macro-potential risks, like in the US or the UK. But in the monetary union, like AMUs is particularly important because in the area of supervision and bank supervision, there are tools that can be applied in a country-specific way. And that's very interesting in the monetary union because monetary policy, obviously, cannot be used in any country-specific way. It's the same central bank interest rate for everyone. But in the area of supervision, there are tools that the national supervisor can use if there's a need. For instance, here in Ireland, the Irish supervisors could have, in the years 2006, 2008, reduced the loan-value ratio. The tool was available. They decided not to use it. But there was also nobody in Europe who told them very clearly to use this tool. If in the future, a country were to get in a similar situation, then the ESRB would have that task to tell the national supervisor to use the available tools to cool down property bubbles. We also have an overall financial market reform to strengthen credit, to strengthen capital of the bank's Basis III, which is not a European project, it's a global project. But Europe is an important part of that, is being implemented. Since 2008, about 450 billion euro has, we see 450 billion euro increase in bank capital in Europe alone. So this is a substantial amount of money that has been added to European bank capital. And all banks have now courtier one capital ratio of 9% or more. We are also working on a further harmonization of European banks through capital directives, the so-called BRRD, which was agreed in December. BRRD stands for Bank Restructuring and Resolution Directive. This is the directive that in the future make sure that before any public money is used to recapitalize the banks, there has to be a certain degree of bailing in of junior debtors, junior creditors. A new approach, quite important, that has disagreed, will become effective in 2016. There's a harmonization of the deposit insurance guarantee schemes. So a lot happening here in the area of banking. But we continue. We want to move towards the banking union. The first step of that, as you probably all know, is the single supervisory mechanism managed by the European Central Bank. This will become operational probably in November of this year. It's a big step for a monetary union to have one institution in charge of the large and systemically important banks. The ECB and that new function will supervise the around 130 most important, largest, systemically relevant banks. But these 130 banks account for 85% of the balance sheets of all 6,000 European banks. I already mentioned the BRRD, the Bank Recovery and Resolution Directive. We are still working on the single resolution mechanism, SRM, which is a necessary counterpart to the single European supervisor. Because if the supervisor comes to the conclusion that a bank has serious problems, needs to be resolved, closed down, whatever, then another institution has to take over. That institution needs money. That is the single resolution fund. The Council reached an agreement on all this. It's now negotiated with the European Parliament. There's a lot of disagreement on details. But I hope that they will come to a final agreement by March or April before the European Parliament goes into recess, given the elections of the European Parliament in May. Another important element of the banking union is the direct recapitalization instrument at the ESM at my institution. This is something that has also has been under discussion for a while. The idea is that the ESM could step in and provide capital to a bank directly. At the moment, we only give loans to countries. That money can be partly used to restructure banks, but it happens via the government. Here, the idea is that we could do it directly. One advantage is to cut the link between sovereign and banks. Because when we give a loan to the sovereign, it shows up as public debt. If we give capital directly to a bank, then the sovereign has nothing to do with that. We are working on this. The Eurogroup, which are the finance ministers of the Euro area, agreed on this in principle. But it still requires some unanimous decisions to activate it. And in any case, it will not be used before the SSM, the single supervisor, is up and running in November of this year. So we do have some time left. I already mentioned the deposit guarantee frameworks, which are being harmonized in Europe. So that was the third element of the crisis response. First, the national adjustment. Second, better European rules for policy coordination. Third, strengthen the European banks. And the fourth and final point is the new institutions that have been created. So we closed institutionary gaps in the initial design of Marital Union. Initially, institutions like EFSF and DSM were not foreseen. Nobody could imagine that we would get into a crisis as deep as this one. What we have seen the last four years is the deepest crisis in Europe and economic crisis in 80 years. We could not imagine the founding fathers of the euro, could not imagine that a member state of the euro area would lose access to capital markets. That's why these institutions did not exist. We learned in this crisis this can happen, unfortunately. That's why the EFSF was created very quickly in May and June 2010. It was set up as a temporary institution for three years, which then would have closed its doors. But the EFSF then was called to provide financing to Ireland, Portugal, and Greece. And the institution will do that. But all new programs will be handled by the ESM. ESM has been doing now Spain and Cyprus. The instruments for the two institutions are the same. We can provide macroeconomic adjustment loans, do precautionary programs, all these buzzwords, I think, from the media of the last few months. We can intervene in the primary and secondary bond markets. We have not done that, but the instrument is available. Or we can recapitalize the whole banking sector by providing loans to a government, as we did in the case of Spain. We never provide loans without conditionality. That is the key approach. Like the IMF, that's a global scene. Financing always requires an improvement in economic policies, because the IMF is only caught in when there's a problem. So something has to adjust. That's what's called conditionality. The country promises to improve policies. And then financing can be dispersed often on a quarterly basis after checking whether the policy changes are really taking place. Different from the IMF, we at the EFSF and ESM have to mobilize funds first in the markets. We issue builds and bonds. The IMF gets its money almost automatically from central banks once they agree on a program. So a major part of our work at EFSF and ESM is to issue bonds and builds in the market to sell bonds. And therefore, I am in very close contact with investors around the world. This slide shows what we have done so far. During the last three years, we have supported five countries, Ireland, Portugal, Greece, Spain, and Cyprus. We have dispersed 222 billion euro out of a lending capacity of 700 billion euro. So 222 billion euro, of course, is a lot of money by any standard. And if I compared with what the IMF has been doing during these same three years, it's three times as much. The IMF dispersed globally, not in Europe, but globally, only 70 billion in the three-year period, 2011, 12, and 13. Maybe the IMF is calling. As I said, the EFSF does not engage in new programs. They cover these three countries, Ireland, Portugal, Greece. There are few finance disbursements left for Greece and Portugal. And then the EFSF will not extend new additional lending. But because the lending is for maturities of 20 to 30 years, the EFSF will be around. It has to refinance its operations because the maturity on the lending side is 20 to 30 years. The maturity on the liability side is around six years. So there has to be a permanent rollover. And therefore, EFSF bonds will be issued for the next 30 years. And once everything is repaid from the country to the EFSF, and then EFSF repays the bondholders, then the institution will be closed. And the ESM will remain as a permanent international institution, the youngest international financial institution at the moment. Another institution, innovation, is what the ECB is doing, the European Central Bank. And let me mention here OMT, outright monetary transactions, where the ECB has announced that if a country has an ESM program, then ECB is prepared to consider, there's no automaticity, but to consider interventions in the secondary bond market. It has not been used, which is the ideal situation, but the announcement was extremely helpful to reassure markets that the ECB could be there under certain circumstances. In my view, this is an efficient cooperation between the ESM and the ECB, because the ESM can provide the conditionality, which the ECB on its own cannot enforce. ESM can through its programs. And once there's an ESM program with conditionality, then the ECB can bring its unlimited firepower, which only a central bank can really provide. So those are the four elements of the crisis response. Here, we can look quickly at Ireland and Spain, the two countries that have exited their programs. I mentioned we have five countries borrowing from us to have exited, both of them exited in December. In Ireland, we concluded the program on the 8th of December. As you know, the Irish overall financing package was 67 billion euro. We from the EFSF provided 17.7 out of that. And I think one can see now the successes of the program. Doesn't mean that everybody in the country can see the success. I know that the unemployment rate is much higher than ever before. It does not mean that all problems are behind us. But the progress is very clear. Ireland is able to go back to the market. I did it again last week. Very successfully with the 10-year government bond. GDP is growing again. Unemployment rate has been declining by 2.5 percentage points. So the progress is there. And we have seen a significant correction of the internal and external macroeconomic imbalances. Spain is the other countries that had nexus last month. The Spanish program was different because it only was geared towards restructuring the Spanish banking sector. The money came only from the ESM. There was also no IMF involvement because the IMF can only lend to countries for overall macroeconomic programs, not for sectoral programs. So that's why we provided everything, 41.3 billion euro. As a consequence, the Spanish banks have strength in their capital. They also have, again, improved their access to funding. And overall, Spain is making very good progress. And although our program was only geared towards the banking sector, Spain, during the last two years, has also implemented quite a range of structural reforms. Fiscal consultation, of course, is also ongoing. There were important labor market reforms, pension reforms. And Spain, like Ireland, seems to be on a very good track. Again, not all the burdens are behind them. Unemployment is much, much higher than Ireland. But it also has begun to fall slightly. So they have a way to go, but still one can see the successes. In addition, everywhere in the EU, we are beginning to focus more on growth, the ultimate objective of economic policymaking. And here, on the one hand, already the fact that the euro crisis is calming down, that the situation is stabilizing, helps to stimulate demand, because we know that in many European countries, including in Germany, for instance, investment projects, big consumer items were postponed at night of the crisis. People wanted to know what's happening. And now that the crisis is calming down, these delayed purchases may well happen. In the countries that borrowed from us, there are many, many structural reforms being implemented. You know it here from Ireland. It's also the case in all the other countries. And that means that these countries are all creating a better base for more sustainable growth in the future. Structural reforms do lead to more growth. The problem is it doesn't happen immediately. There's always a time lag of several years. But over time, it does lead to more growth. The EU also has a number of programs to stimulate growth for all countries. The European Commission makes regular recommendations to its member states to remove obstacles to growth. They differ, obviously, country by country. But in all countries, you have obstacles to growth. Also in the Netherlands and Austria, not only in the countries that borrowed from EFSF and ESM. There's a Marshall Plan for Against-Use Unemployment. Certainly one of the biggest problems we have in a large number of countries with very, very high use unemployment, which is often twice as high as average unemployment with a few exceptions. The European Investment Bank plays a particular role here. You know the European Investment Bank mainly lends inside the EU to support job creation, support SMEs, and in general supports projects that are growth-friendly. The capital of the EIB was raised substantially by 10 billion euro. And this will raise the ending capacity of the EIB by 60 billion and lead eventually to additional investment of 180 billion euro. So these are all parts of the strategy to stimulate growth and to return to a more normal situation in the euro area. And the latest figures are more encouraging. We are back to growth in the euro area after six quarters of negative growth. That period ended a year ago. Since the second quarter of last year, we are back in positive territory, small numbers, but positive. And most forecasts assume that this will strengthen this year and again next year. Let me skip the details in order to save time for questions. But one slide was missing that showed how interest rates have come down in all countries, particularly those that implement reforms. This summarizes again what I already said, that all the countries are able to go back to the markets to even borrow long-term 10-year government bonds, something that was not possible for two years. It is possible again. And of course, that is one of the objectives of our adjustment programs so that countries do go back to markets and can fund themselves at reasonable interest rates. And we see that happening. The interest rate for 10-year government bonds of Ireland was this morning 3.43%, which is quite a reasonable rate, I would say, considering what has happened the last few years. I need to skip because I think I spoke a bit too long on the earlier points. But you can find this presentation either on our website or on the website of the Institute later on. This is about housing market, but you know that probably much better than me. I wanted to show one slide that I thought was interesting, that indeed Ireland has now seen growth that is better than in the Euro area as a whole, that underlines the success of the Irish adjustment program coming from a very difficult situation. But you see it very clearly on the right-hand side when we take the last quarter of 2010 as a starting point. The green line is the Euro area, the blue line is Ireland. That Ireland indeed is significantly above the Euro area average in a cumulative way. So things are at a low level improving and the successes are very visible. Maybe one more slide on challenges because I also don't want to sound too optimistic. We have made significant progress in Ireland, in the Euro area, but of course challenges remain. Risks are there, they differ again country by country. In Ireland, certainly the debt ratio is now much, much higher than it was before the crisis. But I think one should keep in mind that interest rates are fairly low. Certainly the financing coming from the EFSF is very cheap, so it's not a very big burden for the budget. And interest rate levels will be low for a while. Nevertheless, I think the objective of the Irish government to reduce this debt ratio over time is the right one in order also to reduce the vulnerability of Ireland to future shocks one day as much as possible. Structure reforms to boost competitiveness should continue. The Irish banks need to implement their restructuring plans. There's a lot to do. Of course, nobody wants a new bubble. I know that housing prices in Dublin are growing again strongly. So there's enough to do for the government even though they are moving out of the acute crisis of the last few years. So let me come to the conclusion here. The euro crisis is not over. Of course, remember the title of my presentation this afternoon is the euro crisis over. So it's not over. But the end is in sight, I would say. In Ireland, more than in other countries. But even Greece has made significant progress. The euro area as a whole has moved out of recession. All the borrowing countries have made progress on the fiscal side and structure reforms. Interest rate difference between northern and southern Europe have been cut by more than half. So the spreads have come down significantly. But they are still sizable. Unemployment stopped rising. Industrial production is growing again. And confidence indicators are up. Risks remain. Borrowing countries need to continue their reforms. And this is always difficult, politically difficult. Certainly in Greece, where the adjustment effort has to be the biggest one of any country. Some of the countries will need continued also financial support. Certainly less than in the past. But many people expect that Greece will need a third support program. Financial markets in Europe are still fragmented. Although we see some reduction in that. But it's therefore important that all the steps towards banking union are implemented. And another risk and challenges that growth in the future, even if everything goes well, will be limited. The demographic situation in Europe as a whole. Every country is different. But Europe as a whole is not favorable. The population basically is no longer growing. And we know that in a few years time, we will move to a situation where the population in Europe will decrease. And with that situation, we cannot have very high headline growth. We can have per capita growth, which is comparable with the US. But it will always be low when we look at the headline growth. The United States has a population growth of about 1%. When our population stagnates, there will, on average, always be a difference of 1% in the growth rate. Still, I think, to end on an optimistic note, European experience shows that crisis has always led to progress, to positive changes. We have seen repeatedly during the last 60 years that Europe can integrate more during a crisis. And I think in the context of the euro and monetary union, I would say that with all the reforms that are undertaken at the national level, at the European level, monetary union will definitely function better after this crisis than before the crisis. Thank you very much.