Professor Frank Barry:

I presume work is being done in the background on how to alleviate a necessary exit, but I do not know that this is the case. The assumption is that a disorderly unwinding of the euro would be catastrophic. Greece would not necessarily pull out by choice. If the ECB was not providing it with the necessary liquidity, presumably the Greek Government would start to issue IOUs which would become the new drachma and would ultimately produce a currency to pay off those IOUs. The general presumption is that this would be catastrophic for Greece because it would lead to hyperinflation. The new currency would not hold its value. It would depreciate rapidly and cause hyperinflation. Nevertheless, it might be beneficial for Greece in the long run, depending on whether it denominated its debts in this new currency or whatever.

The exchange rate has been extremely beneficial for Ireland's recovery over recent years. I checked the data before I came to this meeting. In terms of the US dollar, €100 would have translated to $160 in 2008, but now it is closer to $100. In terms of sterling, €100 would have bought £90 in 2010, but now it buys £70. The exchange rate has been very important for us. The weakness of the euro has been a major component of Ireland's recovery. That is why I lauded Mario Draghi earlier. It has been hugely beneficial to Ireland. As Greece is essentially a closed economy, it does not benefit nearly as much from this as Ireland does. In a way, this has been an unanticipated benefit to Ireland of having the euro. Of course, there is no way of predicting whether the euro will be weak or strong. It is a sort of random factor that has worked in our favour.