The former Wolves manager believes that the Boys in Green had landed themselves a difficult qualification group for the 2014 World Cup in Brazil
"Germany will win the group. I'm not being defeatist, I'm a pragmatist," said McCarthy.
However, McCarthy also stressed that he thought Ireland could take the runners up spot in the group. "I think we would take second place in the group. You've got one friendly before you are back into (competitive) football," said McCarthy.
"The only way he can get to see the younger ones play in international football is to put them in the team.
"But if you put them in, you'll have one side saying he shouldn't, and another saying he should have kept the older ones who got them qualified," he added.
When asked would he ever consider a return to international management, McCarthy said that his preference was to be managing a club.
"I've had a number of enquiries as to whether I'd be interested in international jobs," he said. "But now, I want to be at a club, that's where I want to be.
"I'd say I would consider it (international football) again and that's not necessarily here because South Korea approached me a few years back; that job was mine, but I turned it down."
McCarthy has been unemployed since his dismissal from the Wolves managerial post and was heavily linked to the Nottingham Forest job but McCarthy revealed that he turned it down.
"The primary reason is that I want to get a job in the Premier League," said McCarthy. "Whether that's going to happen or not, I don't know, because there isn't an awful lot of jobs going, of course, and it's not really a sacking league -- well, it's got better that way."
He continued: "I'd also just moved out of the West Midlands, and I thought it would be wrong to go back and just take a club, especially a club like Nottingham Forest, which has a great history, for the sake of taking the club. I don't think anyone deserves that.
"We'll see what comes up. They all know I'm unemployed. There might be a club abroad that I might like," concluded McCarthy.