cooperation of european countries. the us influence shaped relations in the field of international finance, world trade and macroeconomic policy. the rules and policies pushed forward by the united states, and its leadership in implementing them, were broadly accepted by europeans. even in the military field, the confrontation with the east took place under the protection of the us umbrella, even for countries that declared themselves neutral. in the coming years it will become more difficult for a single country alone, even the united states, to set standards and lead policies for the rest of the world. the emergence of other regions and countries with larger populations and soon similar income to that of the united states will challenge its leadership. international relations will have to be based increasingly on cooperation between equals rather than the leadership of one country, as they have been for the last 60 years. china, india and possibly also brazil and russia will play a greater role in global decisions. the key question in this scenario is : what will europe, and european countries individually, do? they can ignore these developments and continue to act as followers of a leadership which will have become more varied, accepting the balance of interests that will have been agreed between the united states and the other systemically important countries. they can continue to free - ride, but the outcome might be quite different and not quite as pleasant as it has been up to now. alternatively, they can organise themselves and form a major player in the international community, possibly in partnership with the united states. all european countries, not only the largest ones, will have to make this choice. to make europe a key player will require the will of all its members. my impression is that european citizens would be less frightened of the challenges of globalisation if they felt they could participate in its governance. the problem is that globalisation can ’ t be controlled at the level of national governments, at least in europe. europeans can participate in the governance of globalisation only if they stand united. let me give you an example. the current financial market turmoil will have to lead to new financial regulation and supervision. in an increasingly integrated financial market, the new regulation and supervision will have to be the result of coordinated action on the part of major economies. this will involve accounting rules, prudential regimes, the treatment of offshore centres and hedge funds, etc. the new rules will have to be discussed and agreed across the atlantic. the experience of the past few months suggests that the european contribution can be particularly useful in designing a more

and interference. whose fault is it? it always seems to be the fault of brussels ’ bureaucrats, but they are not those who decide on regulations. they, at most, make formal proposals. it ’ s the governments and agencies of the member states which ultimately are responsible for creating excessive regulation ; they are the ones that add extra conditions to take into account national circumstances or create exemption or special regimes, which go beyond the requirements of eu directives when transposing them into national law. the confusion is compounded when accusations of overregulation come from those who attended the council meeting that led to a particular decision, sometimes just afterwards. voting in favour of a measure in brussels and then criticising that same decision once back home is a favourite sport. no surprise that european citizens are confused. the union is also often accused of immobility, of not being able to decide. but if the union doesn ’ t decide it is because the member states don ’ t decide, or more often, because the member states don ’ t want the union to take decisions. i will come back to this issue later. the other misrepresentation is about the competences of the union. they are much more limited than people generally think, but they are often at the heart of the misunderstandings and frustration that the union creates. let me be more concrete here, and give you some examples. i understand that one of the reasons for some people voting against the lisbon treaty in this country was the fear that brussels, i. e. the other member states, would decide on taxation in ireland. it should have been clear that decisions on taxation cannot be taken without the unanimous consent of all the member states. these fears, and similar ones about transfers of specific powers, were thus unjustified. overall, the range of the union ’ s competences is quite restricted. in the economic sphere, for instance, with the exception of monetary policy, its competencies are limited to the coordination of the member states ’ policies. again, one of the issues raised in ireland by the opponents of the lisbon treaty seems to have been the eu ’ s inability to deal with the economic problems facing ordinary people, in particular income and employment. the motto would be : “ europe is doing nothing to help us out! ”. but protecting people ’ s income and livelihoods is a competence of the member states, not the union. while it is certainly an objective of the union to achieve high living standards and