 Chairman, Excellencies, ladies and gentlemen, thank you all for coming and I hope that what we have to say is of interest on this particular day. The presentation that I'm to make is based on our conversations in Athens and on a review subsequently of the background of some of the aspects of the story which relate to the interaction between Greece and the European community and European Union. Start by putting before you two quotations, two views. One from Prime Minister Papandreou within the last week saying that it basically that it's been proven that the crisis is not a Greek crisis, it's a European crisis and now is the time for Europe to act. The other view is one that came from many of our interlocutors, this is a composite of views expressed to us by many people in Athens. The future is dependent on political will. The crisis has its origins in graved effects in the Greek political system over decades. Recovery requires much more than wise economic management, it requires the remaking of Greece's whole political and institutional system. I try to pull those two things together as I go along. Try two is just an outline of what follows and don't be scared, it doesn't mean you're here for the whole afternoon, it's just an attempt to indicate a line of logic from Greece's entry to the European community through to dealing with the current crisis. So start with the insight from the second quote that this is the story that spans decades and one could go back here very far into the history certainly of the 20th century back to civil war, to Nazi occupation, to the exile of political leaders. But let's start in 1959. Greece applied for membership of the European community in 1959 well before Ireland applied but it didn't get membership, it was offered an association agreement in 1961. This was suspended in 1967 when the generals took power but it was reactivated in 1974 with the restoration of democracy. This immediately was followed by a second application for membership and this was submitted in 1975, there were long negotiations with the commission at the time expressing doubts about the structures of the Greek economy and its preparedness for membership but there was an accession agreement in 1979 and entry in 1981 and of course the overriding consideration at this time and the correct one was that Greece had to be brought into the European family after emerging from the experience of the generals and of course at around the same time both Spain and Portugal emerging from their fascist pasts had applied for membership so this was part of a preparation for what might be called a post-fascist enlargement of the union a cementing of democracy. Greece entered in 1981 and almost immediately afterwards there was a general election in which the government changed. This happened really at Pasach into power on a dual commitment that he would leave Greece out of the capitalist European community and out of the US dominated NATO but it so often happens once installed at a ministerial office they discovered that leaving was not really an option that reality demanded that they stay with the agreement that had been made and they had to find a way to achieve this. Senator Commissioner Richard Burke the Irish commissioner at the time starting his second term in the commission and given a task by President Gaston Thorn and I'm quoting from Richard Burke himself speaking from this podium or from the predecessor podium several years ago in this house. It was to find a political solution to the state's intention of the Greek government to negotiate with the community with a view to abiding its pledge to leave the community and the Greek government were asked to provide a memorandum setting out their case and this is very significant. The memorandum is an extraordinary document March 1982 starting out by saying that the economy of Greece differed markedly from that of the community as regards both its level of development and its structures and it then went on to speak about the structural defects of the Greek economy. The Greek government defined its own defects as follows an overdeveloped tertiary sector a widespread black economy a pronounced degree of what they called parasitism which being interpreted meant a huge public sector and that was up to 48% of GDP two years ago still vast military expenditure between 4 and 5% of GDP annually a black economy in areas like tourism parasitism in the tax system in non-compliance and tax corruption and the politicized public service it spoke about underdeveloped agriculture a small processing industry sector with 85% of enterprises employing fewer than five persons under employment in many sectors and social and regional inequalities. This memorandum is extraordinary because if you were to change the date from 1982 to 2010 you're talking about almost exactly the profile of the Greek economy that was presented to us at meeting after meeting and which is absolutely reflected in the EU IMF memorandum statement on needed reform. The memorandum however provided the basis for prolonged negotiation presided over by Richard Burke with over 200 special missions from Brussels going to Athens in 18 months to work across the whole spectrum of administration and economy and the outcome was 1984 an agreement to address Greece's concerns with the structural funds with money and reform packages. This led to a period of economic development in which Greece had strong economic growth right through from the 80s right through indeed until just four or five years ago in fact between 1995 and 2009 Greece came second to Ireland in terms of the pace of economic growth. Greece was built on the support of the structural funds and the integrative Mediterranean programs which also helps Spain and Portugal which represented over all of this period right up to 2005 at least 4% per annum of GDP compared to probably 1% or less in the case of the support for Ireland and one of the factors of the recent crisis in Greece of course was that in 2005 the structural funds were changed and the money was diverted to central and eastern Europe after the 2004 enlargement and you had a fall from over 4% per annum to about 1% per annum in receipts from the structural funds leading to a huge problem in terms of the funding of the massive public sector in Greece. Then there's the story of entry to the Eurozone. Greece applied and was turned down in the first tranche of membership in 1998 because it didn't meet the convergence criteria. It applied again in 2000 stating that it now had a dramatic change in circumstances and met the criteria and the Commission and the ECB agreed and Greece was admitted to the Eurozone on the 1st of January 2001 that was two years after the other countries had entered and this is of extreme importance and significance in terms of what subsequently developed in terms of the crisis. It also has to be said that subsequent to entry there was a reconsideration by EuroStat and by the Commission of the Greek statistics and it does appear that the figures on which the changed judgment was made were not absolutely reliable and in fact that there were serious problems in relation to the definition of the Greek public deficit particularly in relation to the spending on military matters. But we now have a situation where you have the Greek economy as defined in the memorandum of 82, this huge public sector economy with a very low external economic action. Compared to the 80 or 90% that we say of Irish production that must be exported, the Greek equivalent is about 20%, it is a very closed economy, very much dominated by the public sector. Very much dependent upon the funding coming from Brussels and then in the Eurozone now having the opportunity of borrowing money at very low interest rates. And we were told by several people that entry to the Eurozone meant what was called fiscal softening. The budget surpluses of the 90s turned into growing regular deficits. These were covered to a considerable degree by the availability of structural funds up to 2005 and helped by the low interest rate regime of the Eurozone. And then things began to go wrong, the cutback in structural funding and then the recession. And we now moved into a situation where a country which had been running a budget surplus in the late 90s now had a deficit of 15.5% of GDP in 2009. And a buildup of debt which as we now know is well over 150% of GDP. All of this coming from the structural issues outlined by the Greek government 20 years earlier. It's very interesting to look at the IMF EU memorandum, the part altogether from the bits that are in the headlines today about haircuts and so on. It requires so much more than fiscal adjustment. The memorandum calls for action on the scale of the public sector, the cost of the public sector, the need to privatise massive state assets, the need to reduce Greece's abnormally high defence budget, the complete overhaul of the tax and tax collection systems, greater labour market flexibility, major changes in the education system, liberalisation of other key areas, simplification of systems, generally an addressing almost line by line of the issues that had been first raised in the famous Greek memorandum. The story that we got about all of this was more and more that what we're talking about here is the capacity of the Greek political, governmental and administrative systems to deliver not just fiscal adjustment but real long standing deep reform. In fact, Prime Minister Papandreou was speaking quite passionately about this yesterday and he certainly understands this but we're dealing with a country which needs massive reform and my colleagues will talk about the politics and the sociology of that in a moment or two. It's necessary to stress just one or two more points and then I'd stop. One is to understand the impact of community support programmes. We were told that fiscal imprudence was the result of the community support frameworks of all of the money that came from Brussels. Some of it was well used, you can see it in the infrastructure around Athens. Some of it was used to subsidise things that should not have been subsidised. You had an inefficient tax system and very low tax take and consequence borrowing and more borrowing to keep the public sector moving. And then Monetary Union was memorably described to us as a sleeping pill that Monetary Union made it possible to postpone the undertaking of essential reforms. Low interest rates were not matched by stabilisation measures. Bubbles not as big as our bubble but bubbles were facilitated and public deficits were allowed to increase because of the failings of the stability and growth pact. There's no doubt that the Greek economy as described to us mirrors problems in the European system which are evident and which I think are increasingly being faced up to. Indeed, while it came from the summits of yesterday shows further commitment to dealing with these things, what particularly comes across was the failing in both the structural fund regime and the euro regime to match the provision of funds and the provision of low interest capital and all of the positives from the point of view of the recipient countries with a surveillance and control mechanism which could keep systems on the right track. Basically, the failure or all this nonexistence of the stability and growth pact in practice and in the presence of Rory Quinn who negotiated the stability and growth pact, the fact is that it had been allowed mainly because the Germans and the French had got away with flouting it and becoming a very weak instrument indeed and if ever a country needed it, it was Greece. So finally, what I want to say is this, Greece, regardless of the outcome of the current negotiations and current resolutions at the highest level, is a country which has very deep structural problems in its economy which are reflected also as we'll hear in its political structures and these have got to be faced up to and even if the current fiscal problem was solved, the Greece which is a member of the union with us and a member of the euro zone with us still has got to bring through these reforms. My colleagues will talk about the problems of doing that but it is as was said in that first quote this is a problem that has decades of background it's not something that has blown up in the recent past and it is rooted in the political system and the political history of the country and it is to the reform of that that all efforts must be be given and one thing that was said to us very often was there are many people in Greece and we met remarkable people with great insights who know that these reforms must take place and are committed to them but they not alone need to get the commitment and the buying into the system of their own people they need and will continue to need real strong consistent and constructive support from outside and that must go hand in hand with whatever fiscal or financial arrangements are being put in place. Someone at dinner one I said to us something that struck me and I wrote down I'm people here know I tend to write lots of notes at meetings but this one jumped back off the page. We were talking about the debates that were going on about reform and he said if everything goes well we're going to have a very modern country sorry I stopped this I'm not good at technology if everything goes well we're going to have a very modern country but if the political system doesn't respond to the needs of the times we will be bankrupt worse than Argentina and that is the challenge that they face and that we face as partners in Europe particularly in the light of the decisions of the last 24 hours and I pass on now to my colleague Nyle Green thanks.