Dr. Constantin Gurdgiev:

It is probably proportionate to the size of Germany and the core economies. This is a tragedy of the eurozone construct which brings together heterogenous economies with different needs. Mr. O'Brien mentioned Germany. We should not forget other core member states, including the interesting examples of Finland and the Netherlands. In the period in which Germany was doing very well the Netherlands was experiencing a sustained recession which, in terms of duration, was officially longer than the recession in Ireland. Despite this, it insisted on a tight monetary policy for a long period and was highly sceptical about unconventional monetary policies, particularly quantitative easing.

There are other effects, including the effect of one central bank trying to match monetary policy to a highly disparate set of countries with different objectives and requirements at different times. That is what I describe as the ECB pooling effect, which is a tragedy of the euro construct. In addition, there has been the effect of the European Central Bank's balance sheet which increased to approximately €3 trillion at a certain point - 2011 if I remember correctly. The reason for this increase was that the ECB had engaged in quantitative easing, albeit not through the traditional channel. As I indicated, it had long-term refinancing operations and substantial emergency liquidity assistance exposures to a number of countries, including Ireland. At that stage, Germany was looking at the large quantum floating through the ECB channel and concluded that it was effectively engaged in quantitative easing through the back door.