Sunday, June 4, 2023

Ireland enters the market: preparing to create a sovereign wealth fund

Open market focus is on a possible new Sovereign Wealth Fund from Ireland. Dublin wants to take advantage of the boost that being the cradle of all the great technology companies on the planet is giving it to operate in the European Union – a market with more than 400 million inhabitants – based on budget surpluses registered by the government: 10,000 million Euros this year and 16,000 million Euros next year.

Hear the full story in this Mercado Abierto podcast:

Ireland enters the market: preparing to create a sovereign wealth fund

Dublin wants to take advantage of budget surplus from taxes collected from Wall Street giants to avoid future crisis

On CNBC, the finance minister himself, Michael McGrath, confirmed this a few hours ago, insisting that the “scope” document, as he has come to describe it, is based on the deluge of corporate tax receipts that US technology and pharmaceutical companies receive. Let’s leave Back. While going through checkout.

Ireland expects to achieve a budget surplus of 65 billion euros by 2025 and is preparing to shore up its public finances for the future in case the good times end when pension costs rise.

The idea is to create a scheme similar to Norway, Japan and Australia, and withdraw funds as the Irish executive’s structural spending increases over time. It is not yet clear whether they will hire an asset management fund or exactly what assets this new sovereign wealth fund will invest in.

The Irish government forecasts a general government surplus of €10 billion this year, rising to €16.2 billion next year, compared to €8 billion in 2022. Corporate tax is expected to raise revenue by €24,300 million this year, up 7% from 2023. ,

Is not infinite

The Irish government has been warning for some time that they cannot in any case depend on corporate tax revenues which are profitable but unsustainable as more than half come from US companies which could leave overnight.

The fact is that the fund has started saving part of its windfall tax benefits for tough times and has a national reserve fund of 6,000 million euros invested in low-risk government bonds. Unlike that fund, the new vehicle will follow a diversified investment strategy.

But be careful as elections are due in Ireland in early 2025 and the matter will have electoral significance.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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