The Republic were initially drawn with the two heavyweights in Group C only for the rule stipulating that more than two host nations cannot be placed in the same group to come to their aid and moving them into Group D alongside Switzerland, Denmark, Georgia and Gibraltar.
The move was bad news for rivals Northern Ireland, as they filled the Republic's place in Group C.
"I wonder if someone will be crying skulduggery," McCarthy joked following the draw. "I think there was a sigh of relief, and then a cry of despair from Michael O'Neill behind me, who got that group.
"You just knew we were getting it, and I just laughed about it," he continued. "It was a nervous laughter, and I laughed more when it was moved.
"It was funny when Nuno [Gomes] picked [the Republic of Ireland name] out, he looked at Robbie [Keane] and he looked at Ronnie [Whelan], and I know what he picked out, I knew it was us in that group with Holland and Germany. And then it all flashed up, we got moved to the next pot.
"When we qualified in 2002 we had Holland and Portugal in the group then, I would never say never."
Despite the boost, McCarthy was keen to stress the quality of Ireland's Group D rivals. "I'm not suggesting for one minute that Switzerland are not one of the top teams in Europe at the minute, and Denmark isn't going to be easy, they knocked us out of competitions," he explained.
"I've watched Switzerland in the Nations League and they're a very good side. Whenever I watched them, they were a really good side. They're one of the top teams in Europe at the moment in terms of form.
"Denmark have been a bit of a nemesis for us. None of them are going to be easy. Switzerland and Denmark are the top two teams in our group, and we have got a lot of work to do."