Ireland Plans to Create a €100 Billion Sovereign Wealth Fund

Ireland's Finance Minister, Michael McGrath, has introduced an initiative in the country's budget proposal to establish a sovereign wealth fund worth €100 billion. According to McGrath, Ireland currently maintains a consistently high budget surplus, enabling the creation of such a fund, as reported by Reuters.

The Finance Minister has proposed legislation that would require the government to invest 0.8% of nominal GDP annually in the new fund from 2024 to 2035, equivalent to €4.3 billion.

According to estimates from the finance department, the Future of Ireland Fund could reach €100 billion by 2035, assuming a stable income growth of approximately 4%. Additionally, this fund will help reduce future pension and climate-related expenditures, with access becoming available in five years.

"This is a realistic and achievable plan for Ireland, and the window of opportunity will not remain open indefinitely. We must seize it now," stated McGrath.

Furthermore, the Irish government plans to create a second, smaller infrastructure and climate fund amounting to €14 billion. This fund will be used to achieve greenhouse gas emission reduction goals and serve as a buffer in the event of future capital expenditure reductions.

These plans have become possible due to a significant increase in corporate taxes paid by a limited number of foreign companies, allowing Dublin to quickly restore a budget surplus of 2.9% of gross national income last year.

McGrath emphasized the need for immediate action, highlighting two recent declines in monthly tax declarations from Irish corporations, marking a substantial decrease over recent years.

Previously, it was reported that Ireland is creating a €90 billion national wellbeing fund, the funds of which will be used to ensure the welfare of the population as it ages and the workforce diminishes. Ireland has been attracting significant revenue from technology companies due to its low corporate tax rate of 12.5%, making it an attractive location for large businesses and the establishment of American technology company offices.