Jean Claude Trichet of the European Central Bank points to Ireland and says: "We own you."
In the Sunday Independent today, Mr McCarthy says that the ECB behaved in a "bullying fashion" towards Ireland by threatening to withdraw liquidity support and "fostering" a run on the banks.
Mr McCarthy also said that any further inquiry into the banking crisis in Ireland should explore the "murky role" of the ECB in events leading up to the exit of Ireland from financial markets and resort to EU-IMF financing in November 2010.
His comments follow the publication of a quite sensational account by former Finance Minister Brian Lenihan in which he claims that the ECB forced Ireland into the bailout.
In an interview to be broadcast on BBC Radio 4 today, Mr Lenihan has also accused members of the ECB executive of "betrayal". He criticises some ECB governing board members for the "damaging" manner in which they briefed some media about Ireland.
But the state secretary at the German finance ministry, Jorg Asmussen, told BBC Radio 4: "It was made very clear to the Irish Finance Minister that it was not just about Ireland. The functioning of the currency union was at stake."
It emerges in the programme that when EU finance ministers met in Brussels on Tuesday, November 16, the German finance minister, Wolfgang Schauble, pressed Mr Lenihan to hold a press conference immediately after the meeting to announce an application for aid.
Mr Lenihan responded: "I refused and said I wouldn't participate on that basis; that my Government had the sovereign right to decide how it conducted these discussions."
Mr McCarthy, an economist at UCD, has said the Government should now consider publishing full records of ECB communications with the Irish authorities throughout the affair. "It is high time, too, for automatic publication of ECB council minutes," he said.
A report on the BBC programme, published by the Irish Times yesterday, is re-published in full in the Sunday Independent today on page 20. It sheds significant new light on the traumatic events which led the Government to request assistance from the EU-IMF.
The "widespread suspicions" to which Mr McCarthy refers were commented upon by an Irish academic, Professor Gary O'Callaghan, of Dubrovnik International University, in February in a paper entitled: 'Did the ECB cause a run on the Irish Banks?'
Professor O'Callaghan said: "A systemic run on Irish banks was the cause of the November crisis and that it probably resulted from public musings by ECB members on the need to curtail liquidity support to banks."
In the three months up to November last, the banks in Ireland had lost €125bn in deposits. A further €75bn of deposits left in December after the EU-IMF bailout.
The BBC programme recounts how, on November 8 and 9 last, Mr Lenihan met European Commissioner Olli Rehn in Dublin. At the time, the position of the Government, in public and private, was that Ireland was fully funded up to mid-2011.
Mr Lenihan recalled: "The Commission felt that Ireland should be given a chance to see whether it could survive. I don't think the Commission was anxious to bounce member states into a programme. That was my strong impression from my discussions with commissioner Rehn." Earlier this month, Mr Rehn's spokesman said of his visit: "He didn't want to push the authorities in one sense or another."
Both Danny McCoy of Ibec, the employers' body, and Jack O'Connor of Siptu, who met Mr Rehn separately, said the commissioner had communicated the ECB's unwillingness to continue its support of the banking system indefinitely -- but had given no hint whatsoever that the situation would change within days.
The EU's position contrasted with that of the ECB, according to Mr Lenihan.
The ECB had been ratcheting up pressure on Ireland the more Irish banks tapped its short-term liquidity funding. That, he said, "gave the governing council [of the ECB] the opportunity to intervene and comment -- and they commented with great vigour".
He went on: "While I found Mr [Jean-Claude] Trichet very helpful throughout the crisis, I have to say I could not say that of all of his colleagues. Some of them were inclined to brief newspapers in their own member states, giving them an assessment of the Irish position, which I viewed as damaging."
The suddenness of the move in mid-November also appears to have been unexpected for Ajai Chopra of the IMF. He was in Brussels for the week beginning November 15 to discuss wider European issues with the EU. He was scheduled to continue on to Frankfurt but instead cancelled the Frankfurt meetings and flew to Dublin in the middle of the week.
Replying to a question as to whether he supported seeking external assistance at that time, the governor of the Central Bank, Patrick Honohan, replied that: "By the very first days of November it had become absolutely clear to me that this was the way to go."
As speculation intensified over the weekend of November 13 and 14, a series of denials by Cabinet members was made. Dermot Ahern, flanked by Noel Dempsey, appeared on television describing reports to that effect as "fiction".
Their ministerial colleague at the time, Eamon Ryan, simply told the BBC that the denials were not true. He went on to say that these denials did "huge damage" and that "there was a huge loss of confidence among the Irish public about what they were being told".
It subsequently emerged Mr Ahern and Mr Dempsey were operating on briefing notes from the Department of Finance at the time.
At a meeting of EU finance ministers in Brussels on Tuesday, November 16, the pressure on Ireland had become intense. State secretary at the German Finance Ministry, Jorg Asmussen, who attended the meeting, said: "It was made very clear to the Irish finance minister that it is not just about Ireland. The functioning of the currency union was at stake." At that meeting, Mr Asmussen's boss, Wolfgang Schauble, Germany's finance minister, pressed Mr Lenihan to hold a press conference immediately after the meeting to announce an application for aid.
Mr Lenihan responded: "I refused and said I wouldn't participate on that basis; that my Government had the sovereign right to decide how it conducted these discussions."
Denials continued on the Wednesday, up to and including Taoiseach Brian Cowen.
Then on Thursday, November 18, Mr Honohan appeared on RTE Radio One's Morning Ireland programme to state frankly that there would be an aid package amounting to tens of billions of euro.
This intervention came, he said, when he learned the night before that an editorial was to appear in the Financial Times newspaper "saying effectively that people should be planning on bank runs".
He was concerned about the possible effect it would have on financial stability and said he needed to provide reassurance. Asked if he had consulted the Government on the radio appearance, he said: "No, I operate an independent role here."
By that point, dozens of officials from the EC-IMF-ECB were in Dublin and the formal application for assistance was made three days later on Sunday, November 21.
Mr Lenihan also gave a graphic description of his feelings when the bailout talks were concluded. "I've a very vivid memory of going to Brussels on the final Monday to sign the agreement and being on my own at the airport and looking at the snow gradually thawing and thinking to myself, this is terrible. No Irish minister has ever had to do this before."
It's not really that difficult and history is full of these examples, as empires don't want competitors, same here with the ECB. Perhaps the Irish should look more to Iceland than the mainland?