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TRANSCRIPT OF QUESTION AND ANSWER SEGMENT BY EMERITUS SENIOR MINISTER GOH CHOK TONG AT THE INSTITUTE OF POLICY STUDIES (IPS) SG 50 CONFERENCE ON 3 JULY 2015 AT SHANGRI-LA HOTEL Moderator: Thank you, I want to thank both speakers for sticking to their time. In fact, ESM Goh was very generous, he gave us eight more minutes of question time. And I'm going to begin by asking the first question, but I do encourage all of you, especially new voices, to come to the microphone and I will recognize you. In a minute, I will pose the question to Sir John Major, then to ESM Goh. So, Sir John, as you know, the biggest crisis we face in the world today - it's most obvious in the front pages - is Greece. You were Prime Minister of the United Kingdom at the time when the Euro was being conceived, launched and so on so forth. Now, when you met your fellow European leaders, were there any qualms at that time about launching the Euro and about seeing the perils it will lead to eventually? Or was everyone going ra ra ra, let's go for it. I know the UK didn't join but what was your advice to your fellow European when you met them at the EU summit meetings? Sir John: Well, some of it isn't repeatable. Moderator: Okay, it's okay, the Statute of Limitations has passed. Sir John: I know, I know, we are in the discreet audience, no one will report anything. As you rightly say, my advice to them was evident by what I did. I declined to let sterling join the Eurozone and I didn't do that out of anti-European attitude at all. I did it because I thought that there were structural flaws in the construction of the Euro and I thought it was premature. There was a tacit agreement around the table. After Britain had opted out and we had pointed out some of the difficulties that we saw with the Euro, that although they will agree at Maastricht in 1991 to proceed with the currency, they wouldn't actually begin it until the economies of the Eurozone had converged. And by that piece of jargon, we meant we're operating at the same level of efficiency, so they could compete safely in the same currency zone. And that was expected to be what happened. By 1999, eight years later, the economies had not converged, not remotely converged and yet some of the countries began to be so worried that they would never get the Euro currency, they decided to go ahead without convergence and then they made a second strategic error. They didn't restrict the Eurozone to the northern European countries -- France, Germany and the Nordic countries -- that could have competed together in the same currency zone. They widened it and for political reasons, brought in the Southern European's states that were not yet economically competent to compete and that was the fundamental error that was made. It was compounded by the impact of the financial crisis in 2007 and onwards. But we would have got into difficulties in any event -- it just brought the difficulties forward - - and now we are in the position where there are some currencies in the Eurozone -- and you mentioned Greece, it is the outstanding example -- who simply cannot compete in the currency zone and now face an awful dilemma. They wish to stay in the Eurozone, but if they stay in the Eurozone, they are going to have harsh conditions that they have to meet. Those harsh conditions will mean they are in perpetual recession and on a perpetual drip-feed for a very long time. If, on the other hand, they leave the Eurozone, they could create a market run, they might find their new currency, perhaps a new drachma, would collapse in value, they would have hyperinflation and you have a failed state right in the middle of Europe. So, it is now a colossal mess. What will happen, I think, is that the Europeans will keep Greece on a drip-feed system inside the Eurozone. That is what I expect they would do and they will do it, as is traditional with the European Union, at the 59th minute of the 23rd hour. But this raises a longer term question and the question is this and nobody in the Eurozone wishes to hear it or even to answer it, certainly not to answer it. When, how many years hence would it be, before Greece could compete inside the Eurozone? And I would simply say not for a very, very, very, very, very long time. If, on the other hand, they stayed in the Eurozone and then there was a negotiated agreement, that Greece will leave the Eurozone not in market turmoil, not to be thrown out but leave by agreement, then it would be possible for them to do so and for their creditors to write down a significant portion of their debt. If that happened, Greece may be able to recover and in due course, when she is economically ready, she should come back into the Eurozone. That is what I would like to see happen. It is not what I expect to see happen. But unless they and until they address this problem of the impossibility of fair competition for some countries in the Eurozone, there's going to be real difficulty with it. Most of the other Southern Europeans state are making progress, but since the Euro was formed, we have had ten years of very low growth in the Eurozone, ten years, and we are likely to have a considerable period ahead that will still be low growth because they pre-empted the decision, began the Eurozone too early and with the wrong membership in my view. So, I do feel that we were right to stay out. Qn: Well, I think the wisdom of your decision has now been proven. Just a quick point - Ambassador Chan Heng Chee has asked to pose a question and I will come to you after that. But before I give the floor to Ambassador Chan Heng Chee, I was actually going to pose a question to ESM Goh, mentioning Ambassador Chan Heng Chee. Many years ago, ESM, you may recall that Ambassador Chan Heng Chee, when she was a political science professor, created a very notable phrase, referring to the 'de-politicisation of Singapore' and that was the process, as you know, that happened in the 1980s and so on and so forth. So, now clearly, we coming back to the 're-politicisation of Singapore'. So, I was wondering ESM Goh, when you talking about persuading people who can run the office to run for the office, how do you persuade them to come back in an environment which is politically becoming more challenging? So, I hope Ambassador Chan Heng Chee will add to that question cause when you raised your hand, was that what you were going to ask for something else? Okay, ESM, you are on. ESM: Well, I think that is the challenge which we are faced with. There is no big difficulty in persuading people in the public sector to come in. I mean, some said 'No', but there are quite a few have said 'Yes'. Both in my time, as well as, as I know it, in the coming general elections. That is because those in the Civil Service know what is at stake. They have to deal with issues, challenges, problems, crises all the time and they do know that if a good people do not come in, this place cannot run as successfully as before. The difficulty is getting people from the private sector to come in and I do not believe it is just about the money alone. In fact, I think to most of these people, money is a consideration but not a major consideration, but they have different dreams. Their dream will be to build a huge empire of the company which they are running. So, if they have a vision of what they can do for their particular company, they will tell you that 'I get satisfaction from building something which I can see', whereas building Singapore is too big a notion which they cannot quite see. Those are the reasons given to us, but what will be the true reasons I do not know. Yes, I think politics is getting, I wouldn't say more complex because in the times of Lee Kuan Yew, I think politics, really, really rough and difficult. Today is more complex in the sense that now, you have got to reach out to every individual Singaporean to convince him or her. In the past, when you have the media, you make a statement, there are not many competitors to your sources of information. But today, there are just too many. So, how do you then, get these people to come forward? I think we just keep on trying. As I said, fortunately for us at this stage, there are still people who understand the problems, who are prepared to come in. But going on into the future, I think it will be more and more of a challenge, which is a point that I make. We have got to regard politics as devotion, as a worthwhile profession, not just as a calling. Moderator: Well, I see lots of hands up so I'm going to start with Ambassador Chan Heng Chee and then the gentleman at the corner there, then Ambassador Tommy Koh and then you, Mr Tan.