 Well, th remove for the great welcome. I'm really pleased to be in Dublin, I don't really know enough people in Dublinthat's why I keep having to come back here,neishaameor ac mi yw aein ac rhaid i sefnethio ddim I'm thrilled to be here I know a wonderful audience, I can see that already and the title, maybe I should explain that a little bit clearly one has to be a bit provocative I think the euro as it was originally conceived has come to an end a we are now carrying out a blame game about who is responsible for that. So I hope at the end of our who-done-it here today, we'll have a few more clues laid down in the sand as to why that should be. It was said that I was stimulating before lunch, well that of course is unusual for Dublin to have stimulants before lunch. But maybe there is something in this, there is a deeper meaning here, because I think the Irish have been very good during the whole crisis at getting their retaliation in early… So to have stimulants before lunch maybe is the way forward for the Irish economy. Regarding the Euro which is after all the theme, I would like to make three sets of remarks... …and very, very simple really, why do we have the Euro? ..y'r ystafell sy'n meddwl yw'r ysgrifennu. A rydych yn ymweld yma iddyn nhw. Yn ddweud y byddai'r ysgrifennu yn y rhan o'r ysgrifennu. Felly, mae'r ystyried ei wneud er mwyn i'r ysgrifennu. Mae'r ysgrifennu sy'n meddwl ym mwyn ymddangos ymblimau ac ymddangos ambygau... ..y ff chair o'r ysgrifennu Europeid... ..y fydd ymgylchedd yn ysgrifennu yma sy'n meddwl yma. Felly, mae'n rydyn ni'n meddwl yma... a ydych chi'n gweld i'r wych yn syniadau yn yraedd. A mae'n ddefnyddio'r pethau ar gweithio, am y greif i gael yr unrhyw peth mai'n gweithio, Halfwyd, ein bod ni'n gweithio ar eich bell, ein bod ni'n gweithio ar weld ein bod ni'n gweithio arall yn ymryd. Rydw i fynd ar arlesio argymauír Prysyn, peirwyr ni'n gweithio ar rhan oed oedd eich Llywodraeth Prysyn. Mae'r rhaglen niw yw'n cael ei wneud i'r ddweud o'r canflogaeth yn Fflawnio a Fflawnio. Mae'n rhan o'r cyllid o fflawnio yn y cwntechter o'r ddeudio i'r unionau oherwydd ym Mhwyloedd Ysgrifennu. Mae'r unionau munitariau yn cael ei ddweud i'r unionau munitariad yn cael eu ddeudio i'r unionau munitariad. Mae'n rhan o'r cwntechter o'r ddeudio i'r unionau munitariad yn cael eu ddweud i'r unionau munitariad. wrth i dweud o bobl y ff newlyt fel y dyfliadau Walking for the two biggest, most important nations on the mainland to come together and to forge a new unity after all their differences of the last two centuries. I noticed the picture of Jack the Law down says that really is the second reason to complete the single market, the mantra of a single currency for a single market. iawn i chi'n gweithio'n mynd i'r ffordd oedden nhw'n meddwl i'r mynd i gweithio'n meddwl i'r ffordd yma o'r gweithio'n meddwl am bwyd haynodol, i chi'n gweithio'n meddwl i'r ffordd oedden nhw'n meddwl i chi'n mynd i gweithio'n meddwl i chi'n meddwl. Mae yna ymmhwyng â'r cymryd yn y 1980 o'r Ymddych Y Llywodraeth. Mae'n meddwl i'r ffordd o'r hynodol o'r idea, oedd oedd anodol, Yn gwrthwynt gyfw�anfa ym mwy o唯ed o'r Egyrchu meddwl Gyda'u meddwl yma. Daeth ein farr yw'r ardal yn ôl yn i gael yrhewma yma. A drwy'r ffordd, mae'n gwaith eto'i gyda'r Amhericyn sy'n bryd ac ddiddor ni'n gweithio ar yr Amhericyn yn bod y lle mae'r complain arall fel oherwydd a'r negatur ac yn ei ddechrau. Byddwn i weld mae'n gwoes mwy'n gwybodaeth a'r angen i gyflym gyda'r Eegyro yn y byth iddyn nhw'n cyfrwyr cyfahanol yma… ydyna cymryd gyda'i amrioli sydd princessiol ar y ddolla a'r munачadau yw'r cyflym o'r bwynt layr. Mae'r Rhiforol yn ddigwyddol i fynd i'raufen i ddodol yn fy penderfyniad. Mae'r Rhiforol'r Rhiforol yn ddigwyddol i ddysgu'r cyfeidliadau i fynd i fynd i fynd i ddysgu'r cwrs i ddigwyddol i ddysgu'r cyfeidliadau i fynd i fynd i ffraeg i ddyddwydol i ddysgu'r ddysgu'r ddysgu. Ar gyfer yma, hynny'n gwneud y byddwch y cyfnod yn byddwch cyfnod ar gyfer gyffredinol. Fi'r gwrs, oherwydd, mae Gwdeithgaredd Dysdaint erbyn dweud y Gweithgaredd y Gweithgaredd, ddweud y gweithgaredd y Gweithgaredd, oherwydd mae'n gwneud gan gweithgaredd. Mae'r gyffredinol yn ddefnyddio'r ddechrau sy'n cyffredinol i ddechrau'r gwahanol, byddwch ei ddaig yn ymwyno eu cyfnod. Mae Europiliad wedi chi'n gwneud eich gweithgaredd o'r ffath, ,고 ydych yn fwyaf o wir cynnwys. Y Ddechrau byddai gynhyrchu'r ystyried i'ch angen i ddechrau'r sydd. Y Ddechrau byddai gyda profiwn cyllidellfa byddai gyda rhanol. Y Ddechrau byddai gynhyrchu, yn oetaf gyda swyddfa paremph yw gweld y erfynol ac yn olygu'r gwirionedd. A dyna i'r meddwl cyfweld i, dyna ei fod yn ogen erbyn yn gweithio i ddechrau, efallai y Ddechrau byddai eich cyfarasu gyda'r yrhyw iawn, oedda'r llywodau cynhyrchol y drafnol. ac y dyfodol yn ei ddweud yn fwy o'r gwybodaeth a fwy o'r fwy o'r rheolog wedi'i llwyddon yma. Mae'n mynd i ddod, i'r Llyfrgell Pwy o'r cyfrifodd gyda'r Llyfrgell. Be'r idea wedi'u gyfweld ar y dyfodol 20 o 30 ymgyrch yma, y dyfodol i'r ddweud ac y dyfodol i'r Llyfrgell. A'r Llyfrgell er mwyn i'r gwaith, mae'n mynd i'r stachur, Ien i'r llwyddoedd yn hunigio'r hwn yn ymddangos. Fy hwn i'r gweithio, i ddefnyddio'r llwyddoedd yn Palau Bwrn, ac y dypa'r unidau gwirionedd yn ystod yn y ffordd o'r Llyfr Gwyrdoedd. Mae hynny'n ei wneud yn gweithio'r llwyddoedd yn llwyddoedd, dyma'r gwirionedd yn ystod yn gyfrifio'r hwnnw. Mae hynny'n ei ddweud o'r unidau bobl yn Unidog, yw eu sylwb ychydig mewn rhaglen cyntaf y cynhyrch i'r hyn ti'r ymwneud i yw'r hyn ac yn gwneud yn hyd yn hynny, yn hynny, yn hynny energig ac ynbarth o'i perneu gyfran. Mae yn hynny yn sicrhau sy'n ei hirio. Mae'r ddondig mewn uned yn hwnnenau, ac ond'i'n etymu am y ymwneud i'r uned. Mae'r uned yn gweithio', raenwn yr ymddindod llweol wedi'u wneud, ac mae'r ddechrau'n iawn o arferfyn ffwrdd o'r uned yn hynododaeth a'r uned yn ours. ..cymdeithas a'i fynd i fynd yn ddwell yn ddweud. Wel, mae nhw dyma'n mynd i'n meddwl yng Nghymru... ..yna'n ddwell yn ddweud yr ardal... ..yna'n ddwell yn ddweud hynny, ond mae'n cymryd o'r eistedd. Mae'n ffeirio'n ddweud eich bwysig, ond mae yna'r ffaith... ..yna'r archifau, a'u ddweud i'r ddweud i'r ddweud... ..yna'n ddweud ym mfarn i'w ddweud y Ddweud... ..yna'r ddweud y pethau. Mae oeddech chi'n gweld ei brodwyr a chywb yn ymchwilcau cinnig i'r ddimarchu. Na byddwyd yn hi'n cymweld sydd Mae Helmut Colll yn ddod i gyntaf pethau i'r pethau a i'r ddimarchu. Doedd yn cael ei bod yn gweinio'u Ddimarch, yn ni'n z submit. Mae'n ddimarchu i'n ddimarchu i'n gysylltu lleol y maen nhw'n fi, a gan gweithio'r ddimarchu. Mae'n gweld eichOfnach o Gymdeithas Ymwylliant agor, Felly, mae'n gwneud o'r papurau, ac rydyn ni wedi cael ei wneud o'r cyffredinol yng Nghymru a'r Ffrengyrch. Mae'r Gweithio'r Unifodd yn cael Smyt a'r Cull yn cael Llywodraeth ar gyfer 1980. Mae'r Gweithio'r Unifodd yn cael Llywodraeth yn cael Llywodraeth yn cael Llywodraeth yn cael Llywodraeth yn cael Llywodraeth yn cael Llywodraeth yn cael Llywodraeth. Mae'r Gweithio'r Unifodd yn cael Llywodraeth yn cael Llywodraeth, yn O'r ddweudu'r Dynod, y Dynod ym Mwrthedig, mae llwy fath o'r ysgol yn ddweud unrhyw o'r ddweud, mae'n gwybod y cyfle cyfrifiad yna yn dweud, yn y lle yn amlwg o'r berthynas cyfrifiad yno yn 1999, ac mae'r ddweud y gallai arall, fel yw eu rhesymau, a'r ddechrau i gyfarfwyr o'r ddweud, ac mae'n fwyaf i'r isel, o'r Belg, o'r Itali, o'r Frans, o'r Dynod, Felly mae'n gweithio'r cyfrannu yn ymddangos. Mae'r cyfrannu wedi bod yn rhan o'r dynamiadau. Felly, ychydig i'r cyfrannu cyfrannu, y cyfrannu cyfrannu ar y cyfrannu ymdweithio'r cyfrannu cyfrannu e-mu yn ymddangos i'r cyfrannu yn y 1980. Felly, ychydig i'r ddodlaeth. Felly mae'n ffordd yw'r eurau yn ymdweithio'r cyfrannu yma yma'r ymdweithio'r cyfrannu ymddangos. Felly mae'n i'r cyfrannu ymdweithio fel y Llaethau Cymru i'w ddodlaeth cerddodd yn oed oedd y cyfrannu i ddodlaethu'r cyfrannu yma yn ymdweithio. Mae'n cyfrannu cyfrannu yw ddodlaeth. Felly, mae'n i'n i'n i'n i'ch gweithio'r cyfrannu yma. Mae'n i'n i'ch cyfrannu lliwyr. Mae'n i'ch cyfrannu lliwyr o'r maest ac yma'r cyfrannu lliwyr i'r cyfrannu cael ei wyrdd. Mae'n i'ch cyfrannu ingenioguron. Felly mae'n i'ch cyfrannu  slang to their bow. So it's a little bit like if you're air l LEGO. Sir British airways, you don't want to simply buy Boeing. There has to be a voice and you could say that the euro is the air bus to the. American Boeing so somebody would have to fulfil this role and I don't think that anybody thinks the. Eocaroyo is going to somehow components that are it's a kind of good number to reserve currency. Rwy'n credu bod yr unig oedd y rheswm y Chino a'r ffordd o'r rheswm ar y Chino. Mae hyn yn ddod, roedd am 5 o 7 miliwn dolygu o rheswm. Rwy'n credu bod yn dda'n meddwl mas o ddweud, ond rwy'n credu bod yn ddechrau'r chyflog. Felly mae hyn yn ddod i'n meddwl i'r gweithio. Yma rwy'n credu bod y rheswm peddwl yma yw'r ystafell yn ei unig, lywodraeth a'r rhaid i'r unig yw ymddangos yma, y rhaid i'w rhaid i'w ddweud i'w ddweud. ac mae yna yn ddweud yn y ddeu llwyddon yma, sydd yma'n dweud o'r gymryd yn y dda i gyntaf yma. Dwy'n cael y dywed o gymryd yn dweud yma ar y dyfodol, because they appear to the rest of the world to be very strong. They themselves think of themselves as being somewhat weak. They do have an economy which does seem to have traversed all the traviles of the last 10 years in very good working order. Felly, wrth gwrs, the Germans are never more anxious when things start to look as though they're going well, because there's this old saying, as you all know in German, that the light at the end of the tunnel is only the light of the approaching train. And so the Germans don't feel particularly well, even though they do look successful. It does seem, though, as though the Germans are throwing their weight around somewhat more than they did 20 years ago. So the old idea that you would somehow emasculate the demark and take over the Bundesbank and put it into that nice new institution, the ECB, in order to somehow throttle them and constrain their power, I never really felt that was going to work and it doesn't seem to have been fulfilled. So none of those four principal reasons, I would say, has been adequately fulfilled and some of them have been downright disappointments. Now what has happened? Again you need to split it up into three parts really. The first part of the euro's story, the whole idea of the one size fits all monetary policy is that manifestly one size won't always fit all. Therefore you will have periods when some countries which are prone to more inflation will have interest rates which are certainly too low for their economic position and countries which have less inflation and lower growth will have interest rates which are too high. And that was the case in the first five years of the euro. None of this at all was in any way surprising. And it was not only unsurprising, it was predictable and indeed it was predicted. Many people said that some countries will be using the opportunity of the euro as an opportunity simply to let rip to finance consumer booms, to finance speculative booms, to speculate on areas like property and so on. And that is exactly what did happen in many countries of the euro area. And the folly of the politicians in many cases was that they allowed this to happen without thinking someday the money and the luck will run out. This was, if you like, a gift, a dowry of the Germans that the other countries went into monetary union automatically the interest rates descended to a German level. And instead of using the low interest rates in a wise way to finance investment, to finance a decent education system to make their countries more competitive, they decided simply to go in a long drawn out binge. And that is certainly what happened in a certain number of southern countries and arguably that's what happened in Ireland as well particularly if you look at the property market. But you see many people were complicit in this. If I was the queen like she went to the London School of Economics a few years ago and asked in her rather plaintive high-pitched penetrating voice did anybody foresee the credit crisis? Nobody did. In the same way, nobody really foresaw the euro would really come unstuck quite to the extent that it did. And that was because everybody did seem to be profiting from this first five years when the interest rates across Europe all seemed miraculously to have descended to the German level. Everybody could seem to finance themselves in a new nivana. There seemed to be no pain at only gain. The politicians were very happy because even the financial markets, those blagards, those villains, the people that normally bring all the politicians' dreams tumbling down, even the financial markets seemed to buy into this idea that countries as far apart as Greece and Germany were properly convergent. The European Central Bank could hardly believe its luck because suddenly it had created a huge wad of risk-free paper. Government bonds, which seemed to be trading around Europe at the same price and in order to carry out monetary policy across a unified financial area, there's nothing better than to have this mass of collateral which is more or less priced at the same level. And because the financial market seemed to buy into this, the politicians also thought, well, we don't really need to do anything else. We've basically done our homework. We don't need to carry on with any greater reforms. Let's just live life as we've done it because the financial market seemed to be bought into our story. The politicians didn't realise that the financial markets do not take friends, they do not have feelings, they do not support or not support any particular policy. The financial markets are simply out there to make money. And a lot of people on the financial market have made a lot of money by buying Greek bonds and driving the prices up to the same levels as the Germans that the same people now turned into raskily speculators have been making a lot of money by selling Greek bonds in the last three or four years. So this was just a financial market phenomenon, a bubble which was on the way to being formed and which had inevitably to burst. You then move into the second phase. Why did it burst? Why didn't it go on? And then you come into the credit crisis which did have its seeds, of course in America, which burst upon the shores of Europe in 2007. And of course that then sent every nation in Europe into a tailspin because there was a contraction of world trade and every nation in Europe seemed to be affected by that. The German economy went down by 5% in 2009, the Italian economy went down by 5%, the British economy went down by 5% even though we're not part of the euro. And so you could say that at that time we still were in a pattern of some convergence. The music had started to change and above all I would say the key had changed because suddenly the financial markets which had been extremely compliant and extremely complacent and seemed to be buying into the convergence idea, they suddenly became much more risk averse and therefore risk in countries' borrowings, risk in the government bonds that different countries issue, suddenly started to become more of a factor than it had done before, just in the same way as the American Bank had started to look at the credit standing of a couple who might have bought a house in Newmont. They suddenly started looking at the credit standing of a government like Greece which had started to issue bonds and suddenly noticed the credit standing of that Greek government wasn't anything like as good as the French or the Dutch government. So you had an increase in risk aversion by the banks and the other lenders and then you also had the spectre of the Germans coming out of recession more quickly and more vigorously than anybody else. You see because hidden by that apparent convergence in the first five or six years the Germans actually rather secretly you might say although it was fully open to people who read the Financial Times and other such organs had been repairing their house not in a great grandiose way because the Germans don't really go in for things like that these days and not so much because of the government. Schwerder, I think, did do the right thing. He did preside over a government which did allow the companies, particularly the Mittelstands, the family-owned enterprises to repair their lagging competitiveness. They also reformed labour markets to a certain extent although nothing like in the direction of Reganesk or Thatcheresque Hire and Fire but they did make labour markets more flexible and they allowed labour costs to fall compared with the other countries in Europe whose economies had been allowed to get out of control in a positive direction and had too many costs built into them. So that was really not taken on board at all by the financial markets, the fact that the Germans had been reducing their costs. Also a great period of industrial rejuvenation. Lot of you have seen the German company heads over the years. Normally they are elderly gentlemen with a certain respectability with hardly any hair and now the people running German companies if you haven't become a German company manager by the age of 39, you really have passed it. You should go and do something else. There's been a huge rejuvenation of German company management and I would say huge professionalisation. All that went across fairly unnoticed with the effect that the Germans were quickness out of recession and this led to I think a re-pricing of country's debt on the markets of much less forgiving atmosphere and then suddenly we have markets going into a reversal of what has happened before. So suddenly the interest rates start to rise on the bonds issued by Greece or Spain or Portugal, famous spreads start to increase and suddenly then we go into reverse of the position that we had before and it's been a credit boom that has been unveiled as a bubble and which has now been burst. That, if you like, is the story of the two speed Europe which is now emerging. Now who would I blame for all this? Well I would blame of course the politicians because you see if this was a political project and it's always said that indeed that was what it was then the politicians should have been alive to what was going on and there should have been more political checks and balances built into systems there should have been more counter-cyclical fiscal policy, you might say to counter somewhat too easy monetary policy but I would go much further than that. I would also say the ECB was complicit. There's been many many cases and some of them are chronical in the updated version of my book where the ECB fell into this trap of complacency. Mr Fanfwmpwi, who I think was here the other day he made this somewhat incautious remark a next colleague of mine on the Financial Times he said we fell under a narcotic spell well if I was a politician I wouldn't actually use language like that I certainly wouldn't allow any journalist to write it down but anyway he said it and that's what it was it was a narcotic spell but you see the ECB also fell under the narcotic spell as I said earlier they could hardly believe their good fortune and so the European Central Bank wrote loads and loads of scripts basically saluting this great convergence which seemed to have come along. There's a particular report of bulletin which they did in August 2007 so less than four years ago where in their technocratic way the European Central Bank was casting its eye around looking at all the really infamous examples of countries around the world which were living beyond their means and castigating the Americans or the Chinese or the Japanese some were living beyond their means and according to their means some had deficits which were too high and some had surpluses which were too high 6% was the American current account deficit at that time and in this 12 page article about current account abundances around the world which the ECB said is going to be the source of great calamity and upheaval in the world economy not once did they mention that within the monetary union itself you had Greece running a current account deficit of 10% of GDP the Spanish with 9% and the Portuguese with 8% that was all just not even mentioned and the reason was because you had monetary union and within the monetary union these things automatically balance and therefore you don't have to worry about it this was a huge failure of competence a failure of imagination a failure of governance that the ECB fell into that narcotic spell and of course they do admit it now that they say we didn't pay enough attention to the underlying imbalances in countries economies this has nothing to do with the budget deficit of Greece which was only later revealed to have been fraudulently manipulated that's another story altogether although it's really linked to it this was the current account deficit so that's really the difference between what a country earns in its exports visible and invisible goods and what it has to pay out for imports and that was clearly known that Europeans had just been a little bit more alive to what was going on in the rest of the world they would have noticed that in Asia in the 1990s a number of Asian countries had been linked by a currency peg nothing like so formalistic as monetary union from which there is proverbably proverbably no escape they had a currency peg under which they were fixing their currencies to the dollar and the Asian countries in the 1990s they also ran up large current account deficits but the current account deficits on the whole were half as large and went on for only half the time as the massive imbalances that had been built up in monetary union since it started in 1999 so again it was really not a surprise but this big difference in the country's creditor positions and debtor positions would suddenly strike home and become a real obstacle and again there was a failure of imagination a failure of analysis here I would point my finger at the Germans I don't point my finger at the Germans for being better than other people I mean that is their won't and there's nothing wrong with being competitive there's nothing wrong with matching up to the best countries in the world but I do blame the Germans for this self-righteousness which says that if they have a surplus which is their right to do so by doing better than other countries might do I do blame them for not seeing part to their surplus somebody else's deficit somewhere else in Europe and that deficit needs to be financed so there was a failure of what you might call holistic thinking on the part of the Germans they thought they could just sail on chalking up large surpluses current account surpluses year by year by doing better than anybody else not realising they were obviously by definition building up claims on other countries quite a few of them would be in southern Europe and therefore the deficits of the southern European countries were automatically showing up as claims by German banks or German bondholders on those countries and those deficits, those liabilities would have to be settled one day and liabilities and claims do not always match perfectly because even if you can't change the currency sometimes the creditors demand a change in interest rates and that is exactly what happened so it's a complete classic case of when credit and debit falls out of balance I'll just elaborate just slightly on this the Greeks went into monetary unit as did the Portuguese with net debts more or less of zero their net foreign assets were more or less balanced out by their net liabilities after 10 years of running up a current account deficit of 10% a year for 10 years you don't need to be a Nobel prize winner to work out they will then have a net foreign debt of 100% of GDP which becomes progressively less easy to finance at the same interest rates as Germany I mean it's fairly obvious stuff and yet everybody seems to be surprised when this bubble burst now I do know that various people did point out that there were bubbles for me I know because I was one of them I do remember assailing a Jean-Claude Trichet at one conference I think it was about history a history conference in Portugal I said Jean-Claude what's all this about the credit bubbles up in Europe what have you got to say about that I was really like the ugly fairy that turns up uninvited at the baptismal feast of the young princess it was not really a very polite thing to say and yet people clearly should have said that if you talk to Jean-Claude Trichet now of course he would say well of course I did go around I made all those representations at the famous euro group I had my coloured charts countries which had lost competitiveness labour costs I showed those to the finance ministers do you know they didn't pay any attention the point is if you talk to finance ministers trying to change their mind and do things which are unpopular in their country you've got to do a little bit better than just show them coloured charts every month and therefore I do actually blame the ECB for part of this malaise that has now come about now just scrolling forward very quickly what is going to happen next if this is a long running mystery play and it is and if this is a Shakespearean tragedy which again it is then it's going to take still some world before we get to the denouement we're still only probably an act to scene one or two it's going to be a long long time before we actually get to the final scene where bodies are on the stage and the curtain falls but there will be bodies on the stage but it will be a who done it we won't quite know who plunged in the dagger and I'm pretty sure that the Germans will do everything they can to make sure that their fingerprints are not on this dagger because if there's one prediction that I would make it is that a country like Greece will have to leave sooner or later but it will be a sovereign Greek decision it will not be because the Germans or anybody else have told them to leave will have to be done on a perception of what Greece's best interests are I cannot say when that will happen but I think it will not happen as a result of any kind of dictate it will have to be done as part of a sovereign decision but it goes without saying that the gaps now in Europe are still very large and above all they are cultural and sociological and psychological gaps between the culture of the creditor and the culture of the debtor with both sides building up very large imbalances vis-à-vis each other and also the European stability mechanism all those different things we can talk about those afterwards if you'd like to but it's quite clear there's now an emerging gulf between the people who are owed money and the people who owe money and both sides for good reasons good legitimate reasons feel equally resentful the countries which are giving the money feel that the countries which are owing the money are increasingly less grateful for this and also the creditors have less and less certainty that they will be repaid and of course they won't be repaid because creditors never get repaid you always have to accept there's going to be some write downs and the countries which of course are being lent the money and Ireland is now in that case those countries do feel increasingly embitted because they feel that the conditions that are being applied to those loans are increasingly onerous and are driving them even tighter into a spectre of debt deflation whereby the real level of the debt becomes greater every year they are not inflating away the debt is just the very opposite so I think that's the most dangerous gangrene that's really biting into Europe right now and how to escape that spiral something which we might discuss just the final two words one on Ireland and then the other how to analyse this situation in a way which might be helpful and these two things are linked now I do think that Ireland is sui generis for all the historical cultural reasons that we know about I do think that Ireland has got its retaliation in early by recognising the crisis before other countries did in southern Europe and actually starting in this process what you might call internal devaluation they realise you can't devalu devalu the Irish punt because it doesn't exist any longer and also the euro is not going to decline against the dollar in a very significant way because the Germans and the other creditors at nations don't want it so the Irish have done the right thing they've analysed the situation they've realised that they've got themselves into a mess above all because of the banks and because the private debts have now become the public debts through the mechanism that you will know so the Irish have been sui generis they've done the right thing they've taken their medicine they're still only probably less than halfway through all the medicine that needs to be taken but the Irish I think have got a very good chance of staying the course coming out of this as members of the new euro which will be quite a hard quite a steagly currency it's up to the Irish whether they do carry on on that road I think the other northern creditors would like the Irish to stay the course and be part of this they're not going to show any particular favouritism to the Irish but I think the Irish do have it in them to stay the course and that's partly a question of pride but also those patients the Irish people do have a certain amount of patience which is not totally inexhaustible I think after a certain amount of time it's absolutely legitimate in going to Brussels and saying we are paying over the odds for this money I don't think you can do it yet I think you need another six months or maybe a year of taking it on the chin and building up a track record and paying every debt on time and filling in every tracker report on time and doing everything totally by the board and then particularly if you can go to Brussels with a lot of allies and I understand the new government is thinking about where are its allies in Europe and who is it going to go in shoulder to shoulder with when it comes to real bruising negotiation with the Germans and the other creditors you need to go into Brussels with a really well thought out plan and I would actually talk to the Swedes and the Danes outside the euro as well because they are every bit as important as the creditor countries within the monetary union I'm not trying to encourage Ireland to somehow achieve an even greater gulf than there is already by separating the euro up into the non-euro members and the euro members but the Swedes and the Danes are really very good countries with whom one might forge some common alliance here the second point is that I think this great story of what went wrong how this dream has been subverted and how the political ambition has been turned into dust in a very bitter way and the way that we won't have political union worthy of the name amongst enough countries to make this something meaningful all these great hopes have been dismantled I think it is worthy of some thorough analysis and therefore I know there's a great number of books and articles and all sorts of scholarly dissertations have been written in Ireland about this and I think it's to the tribute of the Irish people that they have done this because I don't notice the same thing happening in Greece for instance but I do think this spirit of inquiry needs to be widened not in a finger pointing way but in a way which does try to show how this project has gone wrong because it has gone very very wrong indeed and you do have to overcome the hubris of the European elites in whose name this project was forged and you do need to try to find out where the mistakes were made and therefore I think something almost like a South African Truth and Reconciliation Commission is needed on a European wide scale you'll probably be a distinguished Irish ex-diflamatal lawyer who would be in charge of this but it would be a properly put together and properly empowered commission and you'd have to decide when to ask this commission to start work and whether now is the right time I really do not know but I think it does need to be done at some stage and this commission does need to have the power to arrain witnesses it has to have the power to intercept emails it has to have the power to go to the European Central Bank and say look I'm terribly sorry I know you've got a lot to do but we'd actually like to look at the documents and if you don't let us we'll come back tomorrow with a police escort to do it I really do think that you do need to look at what went wrong here in the nicest possible way of course and so that is my suggestion I'm not saying this has to be done now but I do think that is necessary because many dreams have been shattered many ordinary people's lives who are totally blameless in this because they just believe what the politicians told them many ordinary people's lives have been very damaged by this not just in Ireland but in other countries as well so I do think a proper spirit of enquiry would not just serve the hunger for facts and hunger for intrigue of scholarly people such as ourselves but would produce some sort of healing for what has been a very damaged project thank you very much indeed