Mr. Colm McCarthy:

It is not impossible to design a monetary union that would be durable and include regions with very different levels of economic development. The Deputy did not say it, but he is hinting that a monetary union will work only if each component is comparable in terms of productivity, living standards, etc. That is not really true. The United States is an example. There are states in the union in which real incomes are half those in the better off states. Italy was a monetary union using the lira until 1999, but real living standards in Lombardy were two and half or three times what they were in the south. That is probably still true. That there are considerable differences in living standards is, therefore, not the point. Whether monetary union is a smart idea is a different issue. It will be durable, however, provided there is full banking union and a proper central bank that acts as a lender of last resort.