I know I've touched on this in the past and I haven't got a lot to add to what I've already said.
Where do you think all the money for flashy cars, expensive houses, new bathrooms, third holidays and the like comes from? It is borrowed by young Irish spenders from old German savers. This is how we are able to increase our borrowing by close to 30% per year. In effect, EMU has given us access to the pin number and ATM card of the Germans and, because there are over 80m of them and only 4m of us, they barely notice.
This is how we have arrived at a situation where private sector credit, which is how much we are all borrowing, stands at around €240bn. Our total GDP is approximately €135bn. This means that borrowings are now running at 180% of our income.
This is the highest level in the world and, as it will grow at about €55bn this year, it is also growing the fastest. That growth alone is 42% of our total national income.
There is no historical precedent for this type of borrowing anywhere in the world at any stage in economic history.
. . . How long can this last? As long as Germany remains weak and sickly. But what happens if Germany recovers vigorously? Then interest rates would rise strongly.
This could collapse the entire Irish property pyramid scheme. Faced with defaults, parts of the banking system - which is the lynch pin of the entire structure - could easily become insolvent.
Banking crises have been seen in every property/credit cycle in economic history. In such circumstances a country such as Ireland would need dramatically lower interest rates to refinance the economy.
This might demand thinking the unthinkable. The Government might, in search of lower interest rates, be faced with no other option but to pull out of EMU.