 So, I will talk about corona and the digitization of money. So why do I make this link? Well, first of all, we know now or we see that corona is really a catalyst for the digitization of the economy. We are experiencing this right now in this conference, which would otherwise, and other times, have taken place physically in Munich. The digitization in the context of corona is also affecting our payments. We're already seeing now that payments with paper money are declining. People don't want to accept as much paper money as before because they're afraid it may carry the virus and electronic payments are rising. So it's just an acceleration of a trend that has already started. And corona, or rather say the fallout of the pandemic, is also a catalyst for a change in our money system as we know it. Look at the soaring government debt and look at how much of it is parked on central bank balance sheets. Look at interest rates. They were already on decline before, but corona is clearly accelerating the process. If you look at the US rates have come down even further. So this pandemic is a catalyst for change, for digitalization, for the change in our money system. Now, what we are seeing here is creating problems. Soaring government debt is creating problems. Huge central bank balance sheets could create problems. The end of interest could create problems. Now what I'm trying to argue here, and I shall see how convincing I will be with the feedback that you gave me. I would actually argue that digitization is a solution to these problems. So at least helps to deal with these changes that we are seeing here, soaring government debt and the end of interest. Digitization allows to come back on an old plan of 100% money, which I will explain in the course of this presentation. It will also allow to depoliticize monetary policy, bring back the interest and facilitate, of course, payments. So this is my agenda. Let's start with why 100% money? Well, when you look at what our present money system is doing, then when you think a little bit deeper about it, you will realize that it's actually contributing to investment boom bust and credit boom bust cycles. Recall that in our present monetary system, our fiat money system, money is created through credit extension. The central banks manage the interest rate at which credit extension takes place. Banks use the central bank interest rate, the rate at which they can obtain reserve money from the central bank. They use this as a base on which they then put the credit rates they charge customers. The central bank tries to find a rate and influence with this, the market rate in the credit market, that is equal to the natural rate, the natural rate being defined as the interest rate that equals investment and savings. But since the central banks lack complete knowledge and complete information to identify where the natural rate is and hence can put the market rate where that is, they lack this knowledge and the ability to do so, they tend to put the market rate below or above the natural rate. So they make errors and as they make errors, they introduce economic instability. Look at the case where the market rate is put below the natural rate. There's a tendency for the central bank to do that because of course central banks want to be nice to the real economy and induce growth. When the market rate, we see credit extension accelerating, investment is being funded. The economy goes into an upswing and eventually enters a boom phase. Now when the economy is in boom times, prices rise, central banks to their mandate raise the interest rate and some of the investment that has been funded with the expectations of their low rates will not any longer look viable. We move from the investment boom to the investment bust. Investment drops below savings, the central banks get afraid, they cut rates, they cut them below the natural rate in order to bust and then once they think the economy recovers, they try to come back again to normal. I try to move the market rate to the natural rate but see that this will create another temporary downturn in the credit cycle or could create so they lower the rate again and so on and so forth. We call the period from 2004-5 up to the corona pandemic. We have seen exactly that happening and the Federal Reserve has not really managed after the financial crisis to come back to a normal level of interest rate. So credit money creates economic instability. Now look at this. This is the history of the United States from 1929 to 2008 where what I've done here is I've plotted real private domestic demand. This is this broken line as you can see from 1928 onwards and then I calculated the credit impulse defined as the change of credit flows relative to GDP. And you can see how especially in unusual times such as during the stock market crash of 1929 and then later on in the financial crisis how this financial cycle played out in between. We had also financial cycles as credit boom bust cycles but they were of small magnitude and not realized or recognized as such. Okay so we talked about why 100% money? Answer 100% money is a way to overcome the instability of the credit money that introduces cycle and I will show how 100% money is created in a moment. So why 100% digital money for EMU for the European Monetary Union? Why a digital euro? Well let's just take stock of where we are in EMU. The fact is that EMU is just a cash union. Only the bank notes issued by the ECB are of uniform credit quality throughout the euro area. They are signed by the respective ECB President Mr Draghi until recently now Madame Lagarde and they are of uniform credit quality. The bank money, the money created by the credit extension of the banks differs not only from bank to bank that we can overcome with a national deposit insurance. So it differs actually across countries because the euro area countries which ensure the money created by the bank have a different varying financial capacity to rescue the banks when they are in trouble and therefore to rescue the money that they have created. So because of this incomplete building that we have people have pushed to come up with a common deposit insurance EDIS in addition to a single supervisory mechanism for banks and a single restructuring mechanism for banks. But EDIS is quite complicated because it actually links the liability of in the end different governments together because let's say if we have a common deposit insurance and banks in some country go bust then basically taxpayers in another country may have to come up to make good for the money that would be destroyed. If these banks would be taken out of the market. So EDIS is a problem and as long as we have this problem we have no full EMU we only have a cashier. Now let's see what we can do when we digitalize the euro. My point is that we can basically do away with the instability that is associated with the credit money system that I talked first about and we can also complete European monetary union. Three steps we need to do to get there. Now let me explain these three steps to you with a very simple framework and a very simple framework of balance sheets. When you look at the upper balance sheet you see a balance sheet of commercial banks. They have cash, they have loans to non-banks, they have deposits, they have non-banks, they have savings equity. We have a balance sheet of central bank that has foreign reserves, it has given credit to banks, it has cash and it has cash deposits of banks. You will see that these balance sheets that I've put up here are slightly different from the one that I've just explained because what we now do is we create a secure deposit. So what we do is we take out loans to non-banks and we take out those loans that have been made to governments, i.e. government bonds. We sell these government bonds from the bank's balance sheets, they can by the way, as I say this in parenthesis, buy these bonds from the public in the first place so that they have them. But we take these bonds out and sell these bonds to the central bank. So we put it here into the asset side of the central bank. The central bank of course pays for these bonds by putting reserve money into the account of the banks. So the reserve money shows up on the liability side of the central bank and it shows up on the asset side of the commercial bank. And now we use this money to cover the deposit of the non-banks. And as you can see we have now a system where basically the banks have 100% reserves on the side deposits of the non-banks. Everything is fully covered, no longer fractional reserve banking or fiat money system. So now let's have a look at how we would go about when we extend credits in the system. The side deposits would be converted into savings deposits, the savings deposits would be given on as loans. But of course the credit, the borrower gets the money, right? It gets basically the cash and puts it in his or her account and works with it. So the banks would no longer create new money for credit, but they would use the existing money to basically fund loans. Now let's go to the next step and let's consolidate the balance sheets. What we do is, as you can see here we have two positions which we can cancel out, the ones that are highlighted. And when we do this we can actually bring the deposits of non-banks down to the central bank balance sheet. This is what it amounts to, so that it looks like this, right? Rather than have a two-tiered system we now have a one-tiered system. We don't need to have the deposits of the general public seat in bank liabilities that are fully covered with bank assets that reflect against the bank liabilities. No, we can strike this out, we can cancel this out and put it down here. And now we look at how this would again work. When we do, when we save and make loans we would give these deposits that are now with the central bank over to the banks. They would give it as loans to borrowers and the borrowers of course are interested in getting the money to do something with it and would put it in their deposits. Now let's take the next step which basically is to convert the security deposit to crypto money. Why is that good? Because having all the money in a central bank account would be perhaps a bit cumbersome because a central bank would have to keep a large number of individual people's accounts. But when we convert this money into crypto money then basically it can be passed on peer-to-peer and the central bank would not have to be the central bookkeeper. And again what we now have, the crypto money is covered basically by loans to states, basically bonds that we can roll over infinitely. And we don't have to pay interest on them anyway. So we have now a cover stock. Crypto money is out there. I leave paper money in there because it's a good corrector for the temptation by central bankers or governments to introduce negative interest rates. And of course this system works like before. So we can go basically in a gradual process step by step from the existing credit money into 100% crypto money system. I call it the Eurocoin. We create the Eurocoin as an asset token. It's backed by the government bonds that are on the balance sheet of the central bank. And they put in a smart contract in which the creation of the coin is stipulated so that politicians cannot mess around with it. It's tradeable via a permissioned blockchain in order to avoid the cumbersome Bitcoin blockchain which takes a long time to process. Okay, the Bitcoin fence will now tear me apart but let's leave it at that. We have the notes that check compliance with the smart contract which is a kind of electronic watermark in the transaction like the watermark in the paper money is. Now we have to stipulate rules for the expansion of the Eurocoin volume. We can do this through the acquisition of further government bonds. But we oblige the states in the smart contract to distribute the newly created coins directly to their citizens as a cash dividend. I don't want the states to basically fund themselves for money creation. That would be modern monetary theory which I don't appreciate. But if we say that they have to pay it out directly as a money dividend to their citizens then they will have to manage their budget without being able to print money. If they breach this obligation, if they forge money, basically the ECB will no longer buy bonds from the delinquent state. And we can now stipulate that the increase in the quantity of coins is regulated by a kind of algorithm. We don't have to make it as rigid as the Bitcoin algorithm but we can basically create a committee that meets once a year and decides by which percentage point to increase the money stock. And this percent that they choose should be related to the growth rate of the productive potential of the Euro area. So we don't need central bank as so many economists with central banks. All that we need is basically a couple of people a year and see whether the Euro economy is now expanding at 1.5% or 1.4% or 1.6%. The banks get new roles. I've already showed this in the balance sheet exercise that we did before. They just take deposits and lend them on to borrowers. This is what the textbooks used to say, right? They don't create any more money, which the textbooks in the past don't explain. The banks are basically equivalent to investment fund with the first loss insurance. The equity cushion that is in the bank's balance sheet is basically protecting the depositor from a loss out of the credit activity by the banks up to just this equity cushion. If the equity cushion is used up, then basically the depositor gets the credit. It becomes the owner of the credit portfolio. I would leave the banks the possibility to create their own money by the credit extension, but I would not guarantee this by the state so that they can do it at their own risk and the depositors can actually give them money at their own risk. Now, the interesting thing is, and this was already explained in the Chicago plan in 1933, by using the government bonds as a permanent cover for the money stock, you can actually take a lot of government debt out of the market. I'll give you an example, pre-corona times. Pre-corona times, public debt in the euro area amounted to about 10 trillion. These are very rounded numbers. This only serves the purpose of an exercise to illustrate. 85% of GDP. We had side deposit in the amount of 7 trillion euros, about 60% of GDP. As I said, this is all before corona times. Now, these numbers are much bigger. We have remaining public debt in the market. If we take all the debt out of the market to cover 7 trillion euros of side deposit, we have then remaining in the market 3 trillion or 25% of GDP. Meanwhile, the ECB, of course, is acquiring many more government bonds so that additional purchases that initially seemed necessary. When I first presented this plan, where they had only about 2 trillion on government debt on the balance sheet, it becomes smaller and smaller. What would be the advantages of this architectural euro? I think that there remains a link then in the future between national budgetary sovereignty and liability because you cannot create money anymore to fund governments. The money is created basically outside the credit market. It is created by, if you want, a formula. We end the sovereign bank doom loop. You could, in this system, you could have sovereign debt rescheduling and bankruptcy of banks and money would not be destroyed. It would be there like gold, so it's possible. Of course, banks and governments may be much more cautious in borrowing because they would have to take into account that they cannot fall back on central banks or commercial banks to bring the money for them when they can't repay their debt. We have a rule-based rather than a proactive monetary policy, which basically I like. We have a dampening of the credit and investment cycles. I explained this before. We could get greater consumer benefit through currency competition because if we enter the digital era with central bank digital money, of course, we would not ban any other cryptocurrency to compete with the central bank digital money. It would be very welcome if there would be other digital currencies to compete because that would give the state and its central bank an incentive to actually produce money for the user and not for political purposes to achieve certain political ends. We could actually have international transactions and the reserve currency function of the euro much improved because you wouldn't have to go through the US dollar anymore. Once you have a digital euro that can be transferred peer-to-peer, you don't have to go through dollar payment facilities anymore. That would, of course, very much re-engraze the attractiveness for the euro as a reserve currency and an international transaction currency. I should add, and I did not do this here on this slide because I wasn't sure whether I could make it through my allotted time slot, I should add that it would also free interest again for market forces because we would not create money anymore by manipulating interest. Money would create it differently, as I explained, and the interest would basically be determined again by the savers willing to give money away for a while. The borrowers who would borrow that money from savers for certain purposes before they return it at interest. Thank you very much.