Professor Frank Barry:

May I make a brief comment on the reason Ireland recovered and Greece did not recover? Needless to say, there are major structural differences between the two economies, the most crucial of which is the export orientation of the Irish economy. As Mr. McCarthy indicated, we are highly dependent on sterling and the dollar. The decline in the value of the euro has been very beneficial to us. We have also been incredibly lucky in terms of the export sectors in which the economy is concentrated. This is not a matter of pure luck, however, as it is also the result of government policy and the policies pursued by public agencies over decades. Our goods exports are concentrated in pharmaceuticals. Indigenous industry exports are concentrated in food and agriculture and services exports are concentrated in computer and information technology services. It has been very beneficial to have an economy that is concentrated in all of these sectors.

Let us take pharmaceuticals as an example. As a sector, pharmaceuticals have increased as a share of overall eurozone, British and US imports. It has been extremely beneficial to us to have been in these sectors. Greece has such a different structure from Ireland that imposing austerity in Ireland has been necessary, one would say, because if we run out of money we have no option but to impose austerity. This has not been sufficient to explain the recovery, however. One cannot say that imposing equivalent austerity in Greece will have the same result because Ireland and Greece have completely different types of economy.