patrick honohan : the european union – financial, fiscal, economic and political challenges ahead address by mr patrick honohan, governor of the central bank of ireland, to the national bank of poland bi - annual eu presidency lecture, warsaw, 19 march 2013. * * * let me begin by thanking marek belka, president of the national bank of poland, for inviting me to give this inaugural lecture in the national bank ’ s bi - annual series during ireland ’ s presidency of the european union. it is not, to be sure, my first visit to poland : i have come here for both business and leisure, and most recently had the most interesting pleasure of visiting wroclaw during the polish presidency at the informal ecofin meeting hosted by marek and by jacek rostowski. ireland and poland have many cultural ties, and as you know we have welcomed a large population of poles in ireland over the past decade. they came during the boom years, but many have put down roots and are staying with us even in these more difficult economic times ; over 2½ % of ireland ’ s population have polish nationality. i was interested to discover that, thanks to this migration flow and the associated two - way travel that follows from it, there are no fewer than 66 weekly nonstop flights between ireland and poland, surely a remarkable instance of european integration considering the distance involved of as much as 2000 kilometres and the relatively small population of my own country at just 4½ million. a big part of the explanation – other historical developments aside – is of course the fact that ireland and poland share membership in the european union ; indeed, form the western and eastern borders of the union at the latitude ( 52° - 53°n ) which dublin and warsaw share. poland took the presidency of the union for the first time in 2011 ; this role has rotated now to ireland which performs it for the seventh time in the 40 years of its membership. as you know, during these semesters, each national government, supported by the national administrative structures, seeks to progress the council ’ s role in the strategic and legislative programme of the union. poland ’ s effective presidency, in which you steered the turbulent discussions on economic governance during one of the most pressured episodes of the economic crisis, and secured agreement on reinforcing fiscal coordination through the so - called “ six - pack ” of legislative measures, is recalled as a strikingly successful one. eighteen months later, though the systemic financial crisis of the euro area is less

##heart recently added a third aspect : 12 • modelling default properly, which one might subsume under the heterogeneity issue with regard to customers differing in certain aspects. let me just mention that certain aspects of all three characteristics have been topics at our conference. 4. conclusion there is no contradiction between the reasonable performance of central banks in recent decades and the impression that they face formidable risks and uncertainties. however, we are in a good shape to face up to them. our knowledge about the economy is permanently increasing. risk analysis and risk management have improved significantly. additionally, a lot of work is being done to further improve our understanding. this conference may serve as a proof of that. the fact that some questions have been left unanswered provides an opportunity for another conference on this and similar topics. i have very much enjoyed listening and talking to you. and i would like to thank all of you. in saying that, i include not only those giving the papers, but also the discussants and participants, who have contributed to the success of the conference. special thanks go to our conference staff and to the organisers, harald uhlig from humboldt university, and heinz herrmann, from the bundesbank. ladies and gentlemen, i hope that all of you will take more from this conference than just papers. networking, cooperation and a fruitful exchange of views are extremely valuable for our common task. we are facing challenging risks. let ’ s cooperate and jointly face them! see goodhart, c. a. e. ( 2004 ), some new directions for financial stability? bank for international settlements, the per jacobson lecture, june 27, 2004, p. 9.