It's a far cry from the gleaming steel and glass of Frankfurt's Eurotower, home of the European Central Bank, to the struggles of Irish first-time house buyers. But for the ECB president, Mr Wim Duisenberg, the difficulty faced by young people trying to buy a home in the Republic is the most pressing reason why the Government must take action to dampen inflation.
Speaking in his spacious, sparsely furnished office in advance of yesterday's meeting of the ECB's governing council, Mr Duisenberg predicted the public would compel the social partners to bring prices under control.
"You have a real growth rate of between 8 and 10 per cent, which is remarkable in itself. But alongside that, you clearly have asset prices rising extraordinarily rapidly and the Irish public will notice that. Some will benefit from it but most of them who want to have a house, for instance, will see that it is virtually impossible to buy a house. So they will protest and that will put pressure on the authorities - be it the Government or the unions or the employers - to ultimately rein themselves in," he said.
The Republic accounts for just 1 per cent of total GDP in the euro zone, so the fact that the inflation rate is more than twice as high as the euro average represents a negligible threat to the ECB's mission to maintain price stability. But Mr Duisenberg warns that, unless action is taken, the sharp rise in asset prices could wreck the Republic's booming economy.
"Relatively speaking, its effect on the rest of the euro area is very limited indeed. It matters, of course, for the Irish, but monetary policy cannot do anything about it. So it is other areas of policy and the attitudes of labour and employers that have to do something about it. If this lasts, Irish industry - Irish production - will price itself out of the market," he said.
During his first 18 months as the keeper of Europe's single currency, the white-haired Dutchman has been blamed for everything from the euro's embarrassing slide on the foreign exchange markets to the ECB's poor public image. But he is adamant that the problem of rising prices cannot be blamed on the decision to join the euro.
"I don't take the blame for Irish inflation. If Ireland had not gone into the euro, the pound would probably have closely followed sterling. So the pound would have appreciated vis-a-vis the rest of the world, which would have had a much more severe negative impact on Irish competitiveness than now is the case with domestic inflation," he said.
Mr Duisenberg shrugged off the suggestion that he belonged to the "left-wing pinkos" identified by the Minister for Finance, Mr McCreevy, as begrudging the Republic its economic success. He was reluctant to criticise the Government in public. "If I have disagreements with the Irish Government I tell the Irish Government - and we do - at regular, confidential meetings with the European finance ministers."
In relation to inflation, Mr Duisenberg admitted it was difficult. "I admit it is very difficult to do something about this. What the Government can do, it should do in the area of indirect taxation, which has an effect on price increases. Because I know that if the ball starts rolling, price increases are followed by wage demands, which try to compensate for the loss of purchasing power that people experience. It's in the interests of the parties themselves that that vicious circle is broken," he said.
The mood among Mr Duisenberg and his colleagues in the Eurotower was uncharacteristically buoyant this week as the euro held on to recent gains against the dollar. After last month's plunge below the psychologically painful level of 90 US cents, Mr Duisenberg is confident that the worst is over for the fledgling currency.
"There was no crisis, but there was the rather awkward phenomenon of the euro's almost continuous slide. To my mind, that was unjustified. For two weeks the euro has been gradually strengthening and it continues day after day. I can only say that I am happy about that." Mr Duisenberg admits that the euro's poor performance against other currencies has damaged the ECB's credibility in the eyes of the public, but he points to the high level of long-term interest rates - 5.75 per cent - as evidence that the markets are gaining confidence in the bank's management of monetary policy.
"The only thing we ought to be judged on is the degree to which we are successful in achieving our one main objective - to maintain price stability," he said.
The euro's weakness has not been bad news for everyone - exporters in the euro zone's biggest economies, France and Germany, have profited handsomely from the competitive advantage offered by the exchange rate.
Mr Duisenberg is concerned that euro zone governments should not squander the opportunity offered by robust economic growth to get public finances in order and institute structural reforms.
Among the reforms he proposes is the creation of a more flexible labour market, making it easier for employers to lay off workers. But he insists that his instincts are thoroughly European and that he does not wish to see Europe's economies following the model of the United States.
"I would not take US society as an example of what we should do. We have our own culture, we have our own traditions and our own values in Europe and we want to preserve that - in particular, the social security system. We may in some cases have gone a little too far in protecting people, but I would never say we have to go as far the other way as the US," he said.
Despite his reservations about the US model, Mr Duisenberg is confident that his counterpart at the Federal Reserve, Mr Alan Greenspan, will engineer a soft landing for the US economy. Although he declined to predict the future direction of interest rates, he said it was conceivable that rates in the US and the euro zone could converge during the coming months.
"But there are two sides to that coin," he added, hinting that US rates could come down from their present level of 6.5 per cent.
MR Duisenberg, who was governor of the Dutch central bank before he took up his present post in Frankfurt, had not expected his role as "Mr Euro" to involve quite so much travelling, something he finds stressful. The burden will become even greater if the central and eastern European states, which want to join the EU, also sign up to the single currency.
The ECB president insists, however, that joining the euro will be the final stage in a process that will take the aspiring members about a decade.
"The first process is to join the EU where there will be a long-drawn-out period of temporary exemptions. After that, the countries will have to become members of ERM II, where no exemptions will be granted, and that will last a number of years. Only after that can they join monetary union, where they will have to meet the Maastricht criteria, which is another three to five years on top of the first two processes," he said.
As for Britain, Mr Duisenberg is not holding his breath waiting for Mr Tony Blair to persuade his fellow citizens to adopt the euro.
"I think that the UK will be in the monetary union before Poland," he said. But he made it clear that he did not expect Britain to adopt the euro before Poland joined the EU, which most observers expected to happen around 2005.
Despite his earlier, implied criticism of the Government's economic policies, Mr Duisenberg clearly backs Mr McCreevy in the argument over who should regulate and supervise Irish banking.
The Tanaiste, Ms Harney, wants to establish a new, independent authority to undertake the task, but the ECB president agrees with Mr McCreevy that the Central Bank should remain in charge.
"I would very much hope that the Irish Central Bank will be involved in supervision and regulation to the maximum extent possible," he said.
"What I regard as a very satisfactory model is the French model where there is a separate regulatory authority which is, however, chaired by the governor of the central bank and the personnel of which are on the payroll of the central bank.
"So there is a close liaison between these two institutions. It's moving in that direction in Austria. It's moving in that direction also in Germany.
"But to separate supervision entirely from the central bank, like they have done in the UK, is a direction which I would not help promote," he said.
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