In practice – and this is part of the underlying mid-20th Century story shown by Piketty for Europe – sudden and major debt crises on this scale around the world have often been accompanied by a surge of inflation and currency depreciation.
Such surges have had the effect of lowering the real burden of indebtedness and passing some of the real losses to the holders of monetary assets. Unanticipated inflation is a crude mechanism of redistribution, though, and typically results in output costs in subsequent years as monetary authorities struggle to bring it back under control. In any event, it is not an option for Ireland.