When you walk up one of the Republic of Ireland's deserted main streets, it is difficult to reconcile the talk of the Republic doing well and being the model for other European countries to follow with the reality of living here.

The reality here is that retail sales have collapsed and are not recovering. Anyone dependent on the domestic economy is just about surviving. No credit is being made available to anyone and unemployment is devastatingly high, while emigration continues apace.

That is what is going on in the 'real Republic'.

Contrast this with the 'invented Republic'. In the invented Republic, we are, supposedly, showing the rest of Europe the way out. We are the poster boys for austerity and the one indicator that the supporters of invented Republic obsess about is the bond yield on Irish government debt, which has fallen from 14% to 8% in recent months. This is significant but, as we are not active in the market because we have been locked out of it, there is not that much value in this figure. But in invented Republic, the economy has "turned the corner", where the skies are blue and Republic is the star pupil of the EU. This is despite having the second highest level of unemployment in Europe - but in Invented Republic unemployment doesn't matter as long as the figure for GDP is increasing.

The figure for GDP is rising because the contribution to the economy from multinationals is rising as exports from the same multinationals rise. It is worth noting that multinationals - while accounting for over 90% of Irish exports - employ less than 7% of the Irish workforce. This is why the increases in GDP don't filter down.

Talk to anyone in the main banks and they will tell you that arrears are building and that most people on 'interest only' mortgages will be coming off those interest only mortgages this year and next. A significant proportion will not be able to afford these. This will prompt a second wave of mortgage defaults. The only way Real Republic will recover is if its debt burden is reduced.

Greece has had 50% of its debt written off. The big fear in Europe is that we would ask for the same type of deal. And why wouldn't we? After all, we are locked out of the market and encumbered with huge bank debts which will take years to pay off, all in order to prevent contagious bank defaults across Europe two years ago. In addition, every cent we pay for the likes of Anglo, AIB or Nationwide, the less we will have to spend on the Real Republic economy and the longer the stagnation will be.