Hi, how you guys doing today? This is Rich here on behalf of Rich2VLive, and I'm here with a very special guest. It is Paul, the CEO of Nextleaf Solutions, Symbol Oils. How are you doing today, Paul? Doing great. Thanks for having me. Great. How are you enjoying the conference so far? You know, it's a good show. This is always for us. Obviously, we're a Vancouver-based company, so we like to have a presence at the show. For a company in the B2B space, it's always great for driving commercial relationships and seeing folks that are never so busy. You've got to see them a couple of times a year. Always great opportunities to keep growing the business and looking for new business opportunities with brands and cultivators who are looking for opportunities to outsource a difficult part of their business. Always a great show for us on the commercial side. Fantastic. Now, 2020 is starting off great with this conference. 2019 was an up-in-the-beginning and then very down-year. Now, what makes Nextleaf Solutions unique? There's like 440 companies that exist in the cannabis sector publicly. What makes you guys special? What is exactly that you do that makes you guys unique? We're a company that became the first publicly-traded company to have multiple issued patents around industrial-scale extraction and purification of cannabinoids. And it's been a company that has been very successful in acquiring and developing intellectual property around the production of standardized THC and CBD molecules. We've developed 11 issued patents over the last year and we've got a licensed processing facility 45 minutes east of Vancouver. Our business model is built on taking low-grade dried cannabis and obviously there's a lot of that in the industry. There's over 400 tons right now sitting in vaults across Canada and our business model is taking that lower-grade material, turning it into a high-purity distillate, refined oil that can then be put into products, beverages, edibles, vape pens, and really more importantly, it can actually sit in an inventory that has an oil for 10 years while a herbal form is only going to be good for six months. So as Canada is kind of slow to roll out, we're really positioned well, I think, as are other extractors here in Canada because there's a lot of material in the process and that's going to need to be turned into oil regardless of how slow the retail rolls out here in Canada, in Ontario, in these provinces that I think have been pretty slow. So for us, great time, I think, and really what makes this unique is our focus on not just our extraction business but really developing intellectual property that we think becomes very valuable as big pharma, big alcohol, big tobacco, these large players get into the space. I mean, these are companies, they don't care about farmers, right? They care about intellectual property around the standardization of CBD and THC-based products that can be sold in Canada and other markets that are federally legal. So that's really where our focus is and we think that we've done over the last three years. We've taken a very focused approach. We've been focused on kind of one part of the supply chain and we think that's how great businesses are built. Very good. Now, our community of investors is in about 60 countries and they love to learn about undervalued, under-appreciated, under-exposed companies. I think you've fallen that category. What would you tell an investor that is doing some research and interested in investing in your company? I think, first and foremost, I would say look at relative investments and look at a company's market cap and when I like to invest, I like to look for 10 baggers myself. Absolutely, we all like 10 baggers. I'll tell you, if you talked to me a year and a half ago, I would have told you that I wasn't long any cultivators and what I would have told you is that I was long on companies. We obviously weren't publicly traded at the time but guys that are in the same space as us and if you look back now over the last year, I think that's been validated by how extractors have done relative to companies that have tried to do it all but I think most importantly, when you look at a company like Canopy Growth, let's use them, they're the biggest company in the world, recently they came out and they talked about their 150 issued patents and what I would say, first and foremost, before you even unpack the value of what those patents even cover, I'd say you want to say, okay, you look at what those patents are worth on a per-patent basis relative to market cap and you look at a company like NextLeaf, we've got 11 issued patents around high throughput, extraction, purification and we think that if you value those patents on a patent for patent basis and you look at what our market cap is versus the biggest player in the space that has arguably the largest patent portfolio, we think that we're number two and that's a big focus for us because we think at the end of the day, investors that are long oils I think believe in the value of our patent portfolio and we say our commercialization of that, that part of the business is free and if you check back with us in a year, I think what you're going to see is that we've done a great job a year from now, over 2020, monetizing our IP through licensing our patents, we recently licensed two of our non-core patents, we're into revenue already, we're excited to put that out to the markets here very shortly but also we monetize our IP through extraction services, toll processing and selling molecules so I think that's the first thing I always say for guys that are looking for 10 Xs, you look at who is going to be valuable to big tobacco, big alcohol, the last company I was with was acquired by Chronos that has taken a major investment from Altria and I say this every single day, who does an Altria constellation in Imperial? I mean three of those companies have made investments in this space and I think you're going to continue to see tobacco, alcohol, pharma, big CPG and again, we really believe that IP is a core part of our strategy because we think that's how we create a billion-dollar business for shareholders as this industry evolves from what has been an illicit industry and now what is being commercialized in year two to where we think things are going to be 10 years from now, 5 years from now, as large transnational companies get into it. Absolutely. Now you guys have a relationship with Bev Canna. Can you talk a little bit about what you guys are doing with them? Bev Canna is I think a perfect example of the types of companies that we like to work with on the downstream so we kind of have an upstream, that's the farmers, the growers. They guys grow in biomass that they need to have turned into oil. The downstream is companies like Bev Canna, guys that are manufacturing edibles, beverages, products that they know how to manufacture already and they have a good understanding of consumer packaged goods. That's not what we do, we sell standardized molecules. So really, we love Bev Canna because it's molecules, THC and CBD, highly purified, come out of neck sleeves, patented, extraction distillation plant and then it powers Bev Canna's products. We think they're going to be one of the largest beverage players in Canada. We think again, that's a segment, obviously Canna, he's very focused on that because of the constellation brand's relationship and we think over the long term, we think beverage is really exciting. So for us, we've got some technology that we acquired recently that allows the onset time to be sped up from about an hour and a half to two hours for me when I take traditional kind of beverage or edible to 10 to 12 minutes. So for us, we think the value of that IP is going to be tremendously valuable moving forward to companies like Bev Canna and other beverage players that are looking for highly purified molecules that are emulsified and ready to go and be added to their beverage products. Fantastic. Now, what can investors expect for neck sleeve oils in 2020? I think what you're going to see in 2020, you're going to see a few more licensing deals where we generate royalty fees from our non-core IP but I think what we're most excited to unveil is some of our partners on the downstream product. So companies that are existing manufacturers of food products that now are bringing their infused edible line to market. We're very excited to start making those announcements and then also our program for cultivators and large-scale outdoor cannabis farmers we think that the outdoor legalization of cannabis has really changed the game and we're really excited to start announcing some of those relationships as well. You know, we think it's a great year and obviously Meti Farm Labs and Valens have both done a great job to really validate the model. I remember two years ago, the biggest LPs in the space there's no market for what you guys are setting up and we're going to do it all ourselves but I think what really labs and Valens have done is they've demonstrated there's a lot of billion-dollar companies that said this isn't as easy as buying equipment and setting it up and they're starting to focus on what they do and we think that there's a lot of value in companies that focus and again, continue to push the signs and get more efficient when it comes to what's their cost per molecule, that oil. I agree with that. I agree with that. I mean, everybody was vertically integrated, vertically integrated. Everyone wants to be vertically integrated. Everyone wants to get their hands involved in everything and why not just become an expert in one thing? Valens has shown and labs have shown and you guys are showing that if you become an, and Bev Canada too, if you become an expert in one thing you have a chance. But if you're trying to be Jack of all trades, master of none, is that not what we're seeing? An entire sector of companies that have blown through, in some cases, billions of dollars. Canopy growth is burning through 300 million a quarter. Aurora cannabis last quarter burnt through $88 million. It's crazy. And this is a scary thing too because you look at some of these balance sheets. So what's on the balance sheet?  You know, we'd love that biomass to be grown outdoors because it's going to be a lower cost per molecule for us. So, at the end of the day, there's a lot of these indoor cultivation facilities that quite frankly you're going to, at some point, you're going to shut off the lights because you're going to say, well, you're going to grow those outdoors in a field once per year. You're going to process that into oil. But the other thing, you know, the goodwill, the biological assets, you're going to continue to see right-downs of that. And I think in some ways that's going to overhang the sector. But the one thing that we know is that Canada is the first developed country in the world to legalize the most popular listed drug globally. And there's going to be a lot of winners over the long term. And there's going to be companies that, you know, you and I are going to be laughing, chuckling about in five years from now and saying, holy smokes.  And, you know, guys bought the assets for pennies of the dollar.  But I also think, you know, you look at other industries, Coke and Pepsi, don't grow sugar cane and processed. And, you know, they do one thing. They, in some cases, don't even bottle. You know, they're a formulation and they're a brand. And it's going to be the same thing in this image. So let me ask you a question. You're the CEO. So if the right company came to the table and offered you X amount of dollars, would you sell this business? Listen, every single day we will do what's in the best interest of the shareholders. That's who I work for.  And, you know, we got a lot of pride, our management team, our board. We got a lot of pride. We're in this to build a billion-dollar business. And we're in this to make a lot of happy shareholders. And, you know, I love this industry. We're a group that really, we've built our business on 15 years of experience in the legacy market. And we do that justice by, you know, developing IP around this experience and really scaling it. And we think that you don't have a lot of opportunities, again, to be in an industry that's, you know, has a massive global demand, you know, disruption opportunity. And, you know, for us, again, we're not looking for any exits. We're looking to build a billion-dollar business. That's why we recently put a shareholder rights plan and a poison pill in place. We looked at, you know, some of these hostile takeovers that we've seen over the last couple of years. We expect that there's going to be some hostile takeovers in 2020. We think, especially as some of these big, billion-dollar companies are going to need to backfill some of their market caps. And we think at the end of the day, you know, again, look at labs, look at balance. I mean, these guys have, with that business model, focused on biomass to oil, have surpassed guys that had a two, three, four year head start. Profitability, revenue, and economics have run it in a great business. So we think that, you know, obviously, there's going to be a lot of opportunities to do M&A transactions. But, you know, for us, we're always focused on what's in the best interest of the shareholders and how do we build a great company. Okay, great. Well, I think you're doing a great job. Thank you very much for being here today. For all of you guys that are watching, Nextly Solutions. This is Paul, the CEO. Take a look at them. Symbol is oils. And thank you very much for your time today. I wish you all the best of luck. Thank you very much. Appreciate it. Have yourself a great day, and thank you guys for watching.


Focus areas for the next Nigeria CEO. Nigeria is gearing to elect her next president in February 2023. That person will have a very overwhelming task facing a dilapidated entity called Nigeria. The next Nigeria CEO and his administration will encounter monumental economic security and political challenges. They will be greeted by a distraught populace, followed by rising poverty, inflation, unemployment, and unprecedented levels of insecurity. The high level of poverty and unemployment rates in Nigeria are taking time bombs. To avoid the kind of violent protests that forced the president of Sri Lanka to step down, as well as those that rocked Sierra Leone recently, the new Nigeria CEO will need to take bold and decisive measures on a well thought out strategic plan. Nigeria's target is at 33.3% unemployment rate with about 42.5% of that number being the young populace. It's also 22.3% under-employment rate coupled with a 20% inflation rate. Now that's really alarming. Leda is caused by mainly increases in food prices, insecurity has forced many farmers to abandon their farms and disrupted food supplies to urban centers. The cost of living in Nigeria is so high, incredibly high, that Nigerians devote over half of their income to food alone. Now if you think about it, that's really alarming for a supposedly giant of Africa. About four in 10 Nigerians live below the national poverty line. Only 70% hold jobs that pay enough to get out of poverty. Amid these economic challenges, Nigerians feel a deep sense of deprivation when they see a few elite with privileged access to the national wealth live ostentatiously. Here's what I've come to agree should be the first focus for Nigeria's next CEO. The plan should contain measurable targets for creating jobs, poverty reduction and decreasing the costs of living, improving security and making a space for a more collaborative approach. They should involve the private sector and other players. In creating jobs, massive job creation should be done through labor-intensive shovel-ready projects in construction, agriculture, renewable energy, environmental sanitation and security. The aspiring CEOs of Nigeria should now begin to identify these core projects and include them in their vision boards. There should be a total alienation of self-serving projects that don't create jobs or strengthen the economy's productive capacities. Former U.S. President Barack Obama showed us how massive fiscal stimulus programs that include job-creating projects can be effective in reducing unemployment and revitalizing a depressed economy. Nigeria's unsustainable debt profile means the next Nigeria CEO won't have much space for an expansionary physical policy. Now, about 65% of Nigeria's government revenue and over 90% of foreign exchange earnings come from the oil sector. Uncertainties in the global oil market and sluggish revenue growth, as well as the negative impacts of, I mean, the recent leak of COVID-19 on the economy, imply that the country will face challenges generating enough revenue to service debt and finance budget deficits. But Nigeria can significantly reduce government's profligacy and rein in corruption. Physical challenges can also be addressed by imposing taxes on major corporations, especially those in the lucrative sectors like oil and gas, telecommunications, and banking. And then on reducing poverty, it's important to cut the costs of living. Now, the new administration of the Nigeria's next CEO will have to provide immediate succor to millions living in misery, destitution, and hunger. The Muhammad Buhari administration experimented these with conditional cash transfers, you know, but school mails and other social interventional programs have only reached just 10 million people. And when you think about that, that's just 5% of the entire population. Nigeria is one of the very few resource rich countries with no means tested and institutionalized safety net programs. The new Nigeria CEO, as a matter of urgency, should borrow and leave from India, where the government introduced what we call the Russian cards, you know, and these enabled poor Indians to access basic food items at subsidized prices. Food affordability increases productivity, it fosters good health, it spores demand for agricultural products, and boosts economic growth, which is what we're just, you know, clamoring for. It also prevents violent protests and crime. So the new Nigeria CEO should eliminate Nigeria's very expensive and corruption within few subsidies to create a better environment for job creating projects. On the reduction of insecurity, Nigeria's economic problems can't be addressed in an environment of insecurity. There are many causes for this insecurity, but inadequate resources is the biggest. Stories have been told about how criminals overwhelm military and police posts because of inadequate manpower and equipment here and there. The number of security personnel should be increased massively through recruiting new officers and withdrawing others from the non-essential services. And then finally on collaborative approach, the government cannot do it all. The next Nigeria CEO should create a conducive environment for the private sector to thrive. It's important that, you know, this person does this. Domestic and foreign investors need incentives to invest in the economy. They need a stable microeconomic environment with low inflation and a stable exchange rate and a robust economic growth. To this end, the next Nigeria CEO should be very careful about the choice of his economic management team. Very important. The choice of advisors shouldn't be dictated by ethnic, political, or other extraneous criteria. The new Nigeria CEO should provide a credible platform for Nigeria to have frank down-to-earth conversations about how to resolve these issues as well as the future political structure of the country. The next Nigeria CEO must rejig the Economic and Financial Crimes Commission and the Independent Corrupt Practices Commission to make them more effective in fighting corruption. Nigerians want to see more corrupt individuals prosecuted and jailed. They want to move beyond just man-naming and shaming that happens, you know, on Twitter. To signal urgency here, the next Nigeria CEO should announce his cabinet and economic team before their inauguration. This would enable them to hit the ground running. Ministerial portfolios should be assigned before many sets are screened by the Senate. This will enable their eligibility to be assessed during their confirmation hearings. I mean, if you think about it, it's going to be quite a daunting task being the next Nigeria CEO. Above all, I personally think that this incoming CEO must lead with empathy. Now I'm just going to take a moment to ask my fellow advocates here what their thoughts are. I'm just going to start from Tulu. Generally, what we do is focus too much on the CEO, you know, on the head of the organization, but in many cases a lot of times to shock you how much influence the special advisor or the executive assistant has on this person. So because the CEO doesn't have all the answers, you know, you've seen that mean where someone says, oh, why don't you want to work with us? And say, can you do the work alone? Clearly, the CEO cannot do the work alone is why you're hiring people. So many times the real test is can the CEO identify and hire the right hands to do the work? It will shock you how much power the president has, but how much power he'll actually have if he has the right person. So I think the real test for the next CEO will be someone that's able to identify good talent and has the political will to hire them because Nigeria has talent. Nigeria has some of the best minds. The way you want to mention is in education, is in academics, in medicine, is in engineering, is in technology. Nigeria has some of the best minds. Look at the last, you know, minister for our culture that we had during the Lord Jonathan.  Look at because of Conjura O'Aila. Look at where she is now. So we have some of the best minds in the world, but do we have the right person that can identify these people and the political will to go beyond, like you said, beyond politics and beyond tribe and ethnicity and actually hire the right minds? Even some of us who sometimes we are the problems because we do this, the other thing called that way you have to hire people from everywhere. You know, for me, I'm just interested in hiring the right person. Federal character. Federal character. What's that? What do you do that thing for? What does it mean? A lot of trust. You know, because if you have the right person during the job, I don't care what he's from, because if you hire someone that is not from my ethnic, you know, part of Nigeria, what is making decisions that is affecting me positively, economically, why would I have a problem with that? Then hire my uncle who is in a terrible job. You know, so we have to start looking beyond these things is what I think, you know, the CEO needs to be looking at. Just reading through and listening to what she said, I'll just say that all the next Nigerian CEOs in contention left to what's up group. That's amazing. That's amazing. That's what he's doing. That's what he's doing. That's what he's doing. Is it for a man? Right. This is like a public administration school again, right here. Now it's the fundamentals here. It's like an avalanche, a chain reaction. They are interconnected. Whoever wants to be the next CEO of Nigeria needs to understand the fundamentals. Need to know, there is this saying that try to know everything about something and need to about something about everything. You cannot claim to be a president or a governor or a senator and if they ask you a question about economy, education, you might write, you don't know. This is interrelated.


Many thanks, Mario, for the introduction and for the very long friendship. I recall you as a student. And it's a reflection on how much the world has changed and you were an important part of that change in terms of the impact of students from Europe and particularly from Italy on graduate schools in the United States in economics and on the profession in the United States and in Europe and now, of course, on Europe itself. So I'd like to thank you for this invitation to take part in this lovely event, in this lovely place. And I should announce immediately that although the topic of the conference is inflation and unemployment, I'm going to talk on something else. My theme is taken from Jean Monet, who in 1976 wrote, Europe will be forged in crises and will be the sum of the solutions adopted for those crises. This quote is discussed in the interesting recent paper by Luigi Guiso, Paula Sapienza and Luigi Zingales, whose view of Monet's contentions can apparently be deduced from the title of their paper, which is Monet's Error. But the title is Monet's Error, followed with a question mark. And their conclusion is this. On the one hand, Monet's chain reaction theory seems to have worked. European integration has moved forward and has become almost irreversible. As long as the political dissent is not large enough, Monet's chain reaction theory delivered the desired outcome, albeit in a very non-democratic way. But, and the but is a word I've inserted into this paragraph, as all chain reactions, also Monet's one has a hidden cost, the risk of a meltdown. Well, that's a very interesting paper. It includes the fact that while the popularity of the EU has tended to decline since the time of the signing of the Maastricht Treaty, the popularity of the euro has not declined very much and it is well above 50% in almost every country in the economic and monetary union. Now, this quote is very common now. There are similar quotes from others. Among them Jacques Chirac, Otmar Essing. And I heard it first in a statement to this effect from Jean-Claude Trichet at the 2011 Jackson Hole Conference. He has, in what he said at Jackson Hole, a few lines which I'm sure Europeans find that they can remember. What he said is, at every stage of the process, that is of the European project, we've heard the same story from Americans. You Europeans don't know how to make decisions. You're always slow. What phone number should I call if I want to speak to Europe? That American was Henry Kissinger. This dream is bound to collapse. We have heard that every time and we have been slow, but in the end we have emerged stronger from every crisis. Well, I spoke to Jean-Claude just to check that this is what he said in 2011 and he said he doubts that he said, we have been slow. He said he always says, we have been bold. Well, those two words share a couple of letters, so it's quite plausible. But that's where I first heard this and I started thinking about it. And the more one thinks about it, the more one realizes that this is a common place among Europeans. I think if you were to put everything that various people have said into one statement, it would go like this. The first step on the road to European Union was the creation of the coal and steel community in 1951. At the start we did not have a roadmap, but we had the goal of ensuring that the countries of Europe would never again go to war, and to that end we had to build an institutional structure that would make another European war impossible. From time to time we encountered obstacles in that process. These obstacles often led to crises, but the crises were overcome. And from each crisis the prospects for a united, prosperous and peaceful Europe emerged stronger. And that is what will happen this time too. That leaves us with three questions. Has modern Europe developed primarily through crises? Will it be stronger when this crisis is over? And what challenges or crises is Europe likely to have to deal with in future? Now, despite the fact that political and economic aspects of the structure of the European economy are inherently closely intertwined and have been intertwined throughout history, and saying this one can think of the Romans and later of Charlemagne, I'll focus on the economic aspects of the European project and primarily on its monetary and financial aspects. Inter-European monetary and exchange rate problems for centuries bedeviled European countries and intra-European trade and led to the desire for greater exchange rate stability, perhaps through some form of treaty or agreement or even through a monetary union. Now of course the desire for greater exchange rate stability is true also of almost the entire world and is reflected in the original articles of agreement of the International Monetary Fund. And if you ever manage to catch Paul Volcker and talk about the world with him, you will be lucky to escape without a long discussion of the desirability for fixing the exchange rate system by not having these excessive fluctuations. The first modern international attempt to regularize monetary relations among independent European states led of the Latin Monetary Union, which came into force in 1866. The original members were France, Belgium, Switzerland and Italy. The Papal States joined later in the same year and Greece and Romania joined in 1867. The members agreed to fix exchange rates among them by setting the amounts of silver and gold, weights and fineness in the national coinage with a specified exchange rate between silver and gold. I took these facts from many sources including Charles Kindleberger's Financial History of Western Europe, which was written in 1990. Sorry, I'll just check it out. Anyway, it was somewhere around in the late 1980s and I took it off the shelf, I still have it, and I found this very nice inscription which I'd followed to the letter until a week ago. The inscription says, for the bookshelves of Stanley Fisher, parentheses not to be read. So Mario, you've caused me great moral grief, but I think I'll overcome it. Kindleberger added, in addition, a limit of six francs per inhabitant was set on the value of smaller coins issued by each country because of the extensive senior age on these coins. The LMU fixed exchange rates within a bimetallic international system. And Kindleberger notes that in setting up the union, the Swiss, Belgians, and Italians were in favor of moving to the gold standard, but that quotation, French resistance dominated. This is a general statement, I think, about many things. Then came a series of blows to silver, I'm quoting Kindleberger, the most important occurring after the establishment of the Reichsmunk when Germany in 1873 shifted from bimetallism to the gold standard and the Reichsmunk started selling its silver. In practice, this moved the Latin Monetary Union to a gold standard, a change that was formally recognized in 1878, which was the year of the International Monetary Conference called by the United States to maintain bimetallism, an effort which obviously failed. A lot of the Latin Monetary Union didn't do very much after that. Its exchange rates were adhered to by the original members with one footnote to come, by the original members, and by others, and they continued through World War I or into World War I, but ended during World War I and the union was formally ended in 1927. The footnote says, Greece was suspended from the LMU in 1908 for debasing its gold coinage and readmitted in 1910. No comment. Now to post-World War II Europe and the question of whether Europe has emerged stronger through these crises. The Treaty of Rome establishing the European Economic Community, the EEC, was signed in 1957 by the six original members, Belgium, France, Italy, Luxembourg, the Netherlands and West Germany, which is the group that had set up the coal and steel community. The aim was economic integration among the six members, including a common market and a customs union. At that time, the Bretton Woods Agreement and capital controls were still producing reasonable stability and exchange rates. However, as Bretton Woods began to unravel in the 1960s, exchange rates became more unstable and depreciations and depreciations against the dollar led to sizable shifts in bilateral rates among European currencies. However, the EEC continued to work within the Bretton Woods framework, even as the Bretton Woods approach began to be modified at the end of the decade and the beginning of the 1970s in particular through the Smithsonian Agreement. That agreement permitted movements that, after you'd calculated them, turned up to be up to 9% between any pair of currencies in the agreement and that was more than European countries were able or wanted to permit. So in response to the pressures of the variability of the exchange rate within the Smithsonian Agreement, members of the EEC agreed in 1972 to the so-called snake or the snake in the tunnel that attempted to limit exchange rate fluctuations of each country relative to the dollar. However, this system was soon tested, notably by the oil crises of the 1970s both the effects of the oil price increases themselves and the policy adopted in response differed across countries. Denmark and the United Kingdom exited the snake soon after entering. Italy dropped out in 1973. France participated intermittently during the mid-1970s, first dropping out in 1974. So the snake was a failure, a failure that created problems in leaving fluctuations that were regarded as excessive among European currencies. So if exchange rates among members of the EEC were to be stabilized in the new world of floating rates, the community had to invent a substitute. And in 1978, the members of the EEC created the European Monetary System, EMS, which started with an exchange rate mechanism, ERM1, that limited currency fluctuations relative to a basket of national currencies. All members, and by this stage there were nine, all members except the United Kingdom participated in ERM1. The arrangements also committed central banks to intervene to support the resulting bilateral rates as they approached the limits of the permissible bans. Countries in the year I am at that time also adopted policies that lowered inflation, which brought their interest rates into closer alignment. The initial success of the ERM encouraged European leaders to lift capital controls and built momentum towards Monetary Union, which was reflected in the Maastricht Treaty, which the European Union agreed to in 1991 and signed in 1992. However, around that time, strains also emerged under the ERM in an environment in which the Bundesbank emerged as the dominant national bank in Europe and the Deutschmark as the dominant European currency. This led other countries in the ERM to follow German monetary policy. But in part as a consequence of German reunification, the pressures generated by diverging fiscal policies and tightening German monetary policy contributed to the ERM crisis of 1992. Moreover, the earlier lifting of capital controls and the promises to intervene to support rates that were ultimately not credible put tremendous pressure on the peg rates and clearly on relations among some members of the EEC and one thinks particularly of the United Kingdom in saying that. The crisis forced the United Kingdom in Italy out of the ERM and forced others, Portugal and Spain, to devalue their currencies. The ERM crisis was an apt illustration of the difficulties of trying to manage exchange rates among countries operating under markedly different economic conditions. However, rather than dissuading policy makers from trying to limit exchange rate fluctuations within a system that would nonetheless preserve the possibility of some exchange rate flexibility, the experience seemed to encourage them to continue with the plan of the Maastricht Treaty to introduce a single currency and a common monetary policy at the beginning of 1999. Here, indeed, was an example of a crisis leading to a strengthening of the European system in the direction that the creators of the European Union wanted through the process to create EMU, which everyone, that means me, calls the European Monetary Union and it's actually the Economic and Monetary Union, began well before the ERM crisis. The exchange rate and central banking provisions of the Maastricht Treaty were introduced on schedule, on the schedule set out in 1991 with the ECB coming into existence in 1999. Until about 2009, the monetary aspects of the plans for the development of the European Union seemed to be a major success, albeit not a sufficient success, to persuade all members of the Union to become members of the ECB and adopt the euro with the most notable standout being the United Kingdom. The ERM crisis also drove home the need for greater coordination of fiscal policies in the run-up to the Monetary Union. Members of the EU agreed to the stability and growth pact in 1996. Although, as we all know, the conditions of the pact have not always been observed nor always enforced by Brussels, which was a critical mistake in the early 2000s, the acknowledgement of the need for a coordinated fiscal policy to complement Monetary Union was a step forward, not implemented very much in practice, but one which may be drawn on in future. Well, what lessons can we draw from this history of the region's economic and monetary responses to earlier crisis? Do the results bear out the spirit of the statements by Monet and others about each crisis leading to greater strength? Certainly, each setback and each crisis spurred policymakers to take steps that they might not otherwise have taken at that time, and the end result of those steps has been a more unified European Monetary Union. Success of crises have not deterred policymakers from the goal of economic integration, but rather seem to strengthen their belief in the need for it, and that integration is stronger today than it ever was in the past. Looking back, the progress in this project, the European project, and particularly the monetary aspects of it, the progress in this project from its earliest days after World War II until today has been impressive. Trade integration has led to the free flow of goods within the EU, and this has brought economic gains. Greater trade integration has in turn generated a continued desire for greater monetary integration, which was put in place in 1999 and until recently seemed to be a major success. That success in turn made crystal clear the need for more fiscal integration, a challenge for the future to which we shall return. Well, what about the current crisis of the Euro area? We should remember that two or three years ago there was widespread skepticism on the western shores of the Atlantic and of the English Channel about the viability of the Monetary Union, and there was much discussion of what would happen after the breakup of the present Euro area. Would there be one or two Euro areas, one for the stronger countries, one for the north, one for the weaker, one for the south, and if so, how well each of the two blocks would fare? That's where we were a few years ago. With one sentence, a sentence that included the words whatever it takes, that skepticism was largely though not totally erased. With one decision, the decision to implement quantitative easing, it became clear that the ECB has the capacity both to decide to implement monetary policy at the zero lower bound, indeed below the zero lower bound, and to succeed in implementing that policy. There should be no one whose Bayesian priors have not moved in favor of the survival of essentially the present Euro area, even though we still await the outcome of the Greek crisis, and even though we know that the present crisis is not yet over. Is this an example of the success of the Monet approach? Absolutely. European monetary policy in the earlier part of the great financial crisis was innovative, particularly in the invention of full allotment outright monetary transactions. That policy was inspired by the crisis. By crisis, as were the innovative policies undertaken by the Fed in the United States. More important than that, it is hard to believe that a European banking union would have been put in place in 2014 if it had not been for the crisis. It is no less difficult to believe that a single supervisory mechanism would have been set up absent the crisis. Now, of course, one may say that the ability to make these difficult decisions depended on the skills of the leadership of the ECB. And that is true. It will always be true. And the fact is that when needed, Europe produced the monetary policy leadership it needed. Well, what of the future? What crisis? What extremely difficult decisions await the EU and the EMU? Some are already visible. The decision to use a single currency to drive the European project forward was a risky one. And at some stage, or probably in several stages, it will be necessary to put the missing fiscal framework in place. And that, if it does happen, will be another example of a crisis. One hopes it is the present crisis, whose solution will have strengthened the European enterprise. For success in this area must be one of the most difficult economic challenges. And it's difficult, and it's a very difficult economic challenge because it's at least as difficult, a political as it is an economic challenge. Facing the EU after the present crisis is over. Also awaiting the EU are the possibilities of major difficulties associated with the current Greek crisis and later with a potential British exit. One can, of course, imagine many different types of future crises, including crises that could develop out of the worsening geopolitical situation in which the Western world now finds itself. And one could go on in the spirit of Forrest Gump, which is to say, things happen. Experience tells us that the best way to deal with future crises is to strengthen the economic framework in which they will be confronted. That will require a great deal of thought about how to deal with future crises that could most easily be solved by an exchange rate adjustment. And it will also require developing a better mechanism to ensure that member states run appropriate fiscal and budgetary policies. And it means also seeking solutions to the difficult demographics now confronting many European countries. And it means the continuation of a courageous and effective monetary policy and no less important, courageous and effective regulation and supervision of the financial system. And we're talking about a monetary policy that could do even better if it were accompanied by an expansionary fiscal policy. All that has been done so far makes it very likely that EMU will survive this crisis. But in the longer run, EMU will not survive unless it also brings prosperity to its members. That means that the most important challenge of the future will require an increase in growth in Europe. And that probably requires an increase in productivity growth in Europe.  Let me conclude by congratulating you, Mario, the management, the staff of the ECB on what you have achieved in your short history and especially in the last few years of extreme crisis. And best wishes for future success in continuing to do your share in contributing to the building of Europe, preferably without having to face too many future crises, useful as Monet's approach suggests such crises could be. Thank you all and good luck.


whereas cognitive empathy is the ability to tell what kind of emotional state someone is in. Usually not through direct methods of communication like animal feeling great, being able to tell from the face and the body and the way that they're acting that they are in a particularly negative or positive emotional state. So that's where the misconception comes in, and I would say that the majority of autistic people, banking on the fact that they're not psychopaths, do actually have adaptive empathy, which is the empathy that you're thinking about.