Klaus-Peter Müller, the chairman of one of Germany's biggest banks, is proud of his country's contribution to Ireland's flourishing economy. Addressing the German-Irish Chamber of Industry and Commerce at a function to celebrate its 25th year, he noted that, this year alone, German companies have exported goods and services to Ireland worth €15 billion and invested €9 billion here.

When the Chamber was founded, he said, Ireland was still seen as the poor man of Europe. By removing trade barriers and protectionism the State put itself in a position to seize the opportunities offered by the single European market and went on to achieve remarkable economic success.

"The Celtic Tiger has grown up and has taken its rightful place among the world's leading national economies," he said. "This is the result of integration into the EU and a forward-looking economic policy.

"Ireland has also created a regulatory framework that promotes entrepreneurial spirit and investment."

Müller, a prominent member of Germany's Christian Democrat political party and an acquaintance of the new Chancellor-elect, Angela Merkel, hopes Germany may soon be able to boost its economy with a series of tax reforms and confidence boosting measures.

"I believe a grand coalition can resolve issues such as labour market reform, health and pensions. I believe it can bring about the changes that are needed," he explained.

"People in Germany expect the government to fix things. They have lost faith in politics as politicians have reacted too late. The incoming government biggest job is to regain the people's confidence."

Commerzbank has had a presence in Ireland's International Financial Services Centre (IFSC) since 1989 and was the first international asset management company to open for business there. Today the bank employs 70 staff at two companies in the Dublin centre and has almost €7 billion in funds under management.

It trades internationally from Ireland and has noted the healthy earnings the Irish banks have generated from their customers.

Müller admits to being envious of such a performance but said Commerzbank had no immediate plans to go head-to-head with them in the high street. Within five years though, he suggested consumers across the EU would be able to shop around among the international banks for basic products such as mortgages.

He says that large companies are already benefiting from the harmonisation of Europe's money markets and can source cheaper finance for their transactions. Small companies and consumers, though, have yet to fully grasp that dividend.

"Following the introduction of the euro, interest rates on the money market have converged totally and volumes have rocketed. However, there are still considerable differences between the interest margins on loans to small companies and private clients. Foreign banks are hardly ever used for this purpose," he said.

This means that domestic financial institutions are continuing to provide products for local consumers leaving a widely varying range of prices and services for them to chose from in different countries. He cites the example of Italian consumers who pay four times the bank charges faced by UK bank customers.

The single market is mainly hampered by different national consumer protection standards, he says, as well as different banking, supervisory and fiscal regulations. "In the interests of consumers, in particular, we currently need further financial market integration in the retail sector where we are still a long way from creating a single market," according to Müller.

Charlie McCreevy, the European commissioner for internal markets and services, will lead many of the necessary reforms. Müller, who is impressed by his energy, believes it should be possible to complete this project within the next five years. "I believe that Charlie McCreevy, has the energy to do that. I believe he will be successful and when this happens that will open cross-border transactions," he said. "A bank can issue mortgages from any corner of the world."

Commerzbank currently operates a virtual bank in Poland, offering its full range of banking products and services over the internet and telephone to consumers there.

Since it opened five years ago, it has attracted more than one million customers. This is something that financial institutions will increasingly roll out across Europe once the cross-border barriers are dismantled, Müller argues.

For now though, Commerzbank is focused on expansion into Russia and central Europe, where the long-term opportunities could potentially prove to be highly lucrative.

"Ireland is a very attractive market and like the UK, Spain, Italy and France, is a very profitable market for banks," he said. "We are involved in retail banking in Poland and are looking to grow in Russia and the Ukraine, which are much bigger markets where the domestic competition is less sophisticated.

"We will expand there before we start fighting well-established banks in Ireland, the UK and Spain."