Cormac Lucey has produced a well-argued polemic here which states the authorities’ plan to fix the economic problems of the euro zone’s periphery simply cannot work. Instead, he advocates a more radical approach which involves not alone debt restructuring but an exit from the euro zone.

Positive job and property price data have created a new sense of optimism but Lucey attempts to dampen this. The worst is far from over and we have to think the previously unthinkable in our search for a long-term solution.

We cannot carry our current level of debt with current low growth rates and these debt levels are in themselves one of the causes of our low growth, Lucy argues. By making interest rate cuts and extending the maturity of many loans, our creditors have already tacitly admitted the unsustainability of Ireland debt position.

Lucey examines the impact of sovereign default and argues that while it would be dramatic, history suggests it would not lead to economic catastrophe and in the long run it would be good for the country. Benefits are likely to be greater if the default is accompanied by a substantial debt write off, followed by a currency depreciation, and if global economic conditions are reasonably positive.