Dear Mr. President, dear colleagues,

Unless we achieve a truly common stance in the EU, in favour of real reform, achieving adequate global rules for the financial markets becomes much harder. Sensible people would say that a massive failure of both regulation and oversight, together with revealed flaws of an overly simplistic economic paradigm, provide an indubitable answer to what to do. But some still argue that soft regulations should be the lynchpin of the new system. In my view, they are wrong whether they honestly think so, or are driven by parochial interests.

One of Keynes' intellectual legacies – that highly volatile capital flows are inimical to trade and prosperity – has shown its relevance in the current huge mess and other crises, including in emerging markets. For decades now a mantra has been heard worldwide: that not much can be done in national policy-making because global markets would punish a government. But is the complexion of global financial markets God-given?. Are not global markets, aside from their technological drivers, also the product of human beings' decisions to set rules for finance, trade and investment?. The claim that nothing can be done about finance, when it brings about misery, is unconvincing.

Much can be done in regulating all financial entities (including hedge funds and private equity funds), constraining leverage, dealing with pro-cyclicality and accounting, rating agencies, coordinating policies better and so on.

The decline of a paradigm which equates market economies with no regulations has to be seen in conjunction with a rising multi-polar economic world in the attempt to forge a new international financial system. On the latter hinges, arguably, the fate of an open world economic system. Unless we do the right things we are running the risk of experiencing a breakdown of this system eventually, and liberal democracies will be crippled.

I hope that the new American administration will be forthcoming in this respect. But we, at home, in Europe have to rise to the momentousness of this period.