Perhaps the single best decision made by Charlie McCreevy as Minister for Finance was the establishment in 2001 of the National Pension Reserve Fund (NPRF). In addition to proceeds from privatizing Eircom, 1% of GNP was to be channeled annually into an investment fund dedicated to financing public service pensions from 2025 onwards.
Not only was the NPRF a sensible exercise in counter-cyclical fiscal policy, – in marked contrast to the habitual “If I have it, I spend it.” approach – it was a hefty down-payment on the otherwise unfunded public service pension liability.
Unfortunately, the best laid economic plans didn’t survive contact with Ireland’s world-beating banking crisis, the final bill for which will likely come in between a third and half of current national income. Continue reading
vicduggan 