Mr. Colm McCarthy:

Deputy Durkan is right in that there has been a fracturing of cohesion in Europe over the past several years. Eurosceptic parties of various types are on the rise in several European countries. UKIP is the one that is relevant in this context but there are other eurosceptic parties in other countries such as the Front National in France. There will be a presidential election in France in 2017 and current opinion polls put the Front National as the largest party. While it might not win because of the run-off second stage in the presidential election, it must be remembered the Front National came second in 2002. It then lost to President Chirac in the run-offs. Clearly, the party is more popular than it was before. It is not inconceivable that Marine Le Pen might win the presidential election. One might get good odds against that but stranger things have happened. She has said that the day she wins the presidential election, France will leave the euro, never mind the European Union.

One of the reasons for the rise of these eurosceptic parties across Europe is the euro. The single currency was a premature project, badly designed and badly managed.

It has given rise to feeling in this and other countries, notably in Greece, that countries are getting screwed by Europe, a generalised notion which may not be reasonable but people feel it. People have been attracted more to national sentiment rather than a European vision these past few years. I think the common currency has done damage to the European project and if it comes apart, and that is still possible, it could do serious damage to the European project. Let us leave that to one side.

If the British were to leave it would be a significant blow to Europe. It is not as if Britain is a small country on the edge, it is one of the three important countries in Europe, along with France and Germany. If Britain were to leave, it would be a huge blow to the European project. I hope it does not happen.

On the question of how many seats UKIP might get, it is possible that UKIP could poll very well and win no seats. The winner is the first past the post. It is a very strange system. It looks like the Scottish National Party will win a large number of seats and it will not stand candidates except in Scotland. If one gets a large vote in a small geographical area one wins seats under the system of first past the post. In reading up on the topic over the weekend I saw projections by people in the University of Essex based on their model of all 650 constituencies, having fed in the voting patterns in the most recent opinion poll as well as local elections results, and in one scenario, UKIP wins 15% of the vote throughout the United Kingdom and gets no seat. That could happen. It is not what they think will happen, but it is not inconceivable.

Let me address what will happen if there is a referendum. People should resist the temptation to offer free advice to the British electorate as to what way they should vote. As they will pay no attention to it anyway one is wasting one's sweetness. We should focus on the fine print of the issues, how the external frontier of the EU is to be policed in counties Cavan and Monaghan and such places. That is what we should focus on and the British electorate will reach a decision regardless of what we say.

Deputy O'Reilly raised the issue of the sterling exchange rate. There is nothing we can do about it. We decided in 1999 that we would use the euro and have no Irish currency. The British decided that they would not do that. Ever since the exchange rate between the euro and sterling is something that happens. It is like the weather. We have absolutely no influence over it, good, bad or indifferent. There have been times when retailers on the northern side of the Border were doing fine and there may well be occasions in future when it is the other way around. It is entirely outside of our control.

Deputy O'Reilly also raised the question of whether the IFSC could stand alone if there were problems in the City of London. That is entirely possible and there are many good businesses in the IFSC that are independent of what happens in London and hopefully would survive and prosper. The demise of the City of London has been predicted regularly down the years. It was predicted that when the British decided to stay outside the euro this would be the death knell for London's financial business and that it would all migrate to Paris. That was the fashionable view 20 years ago but it did not happen. These businesses are sticky in the sense that the City of London has a big business in very technical areas, one such example is the reinsurance market. The reason that business will always be there is because it has the infrastructure of the markets, companies and human capital that is devoted to these things.

London has survived and prospered as a financial centre against a lot of gloomy predictions made during the years. That might even be true here, too. Dublin has a lot of technical infrastructure in the financial services centre that is not easy for others to replicate. Some of the businesses located there would certainly survive. However, if there are ongoing operations, as there are, that provide support and back office services for companies in London and if these companies were to get into trouble, there would be a ripple effect here. That would be inevitable.