Most of €17.9bn pension fund to help plug gap

THE vast majority of Ireland’s €17.9 billion-strong National Pension Reserve Fund (NPRF) will be used to bail out the banks.

The fund was set up at the height of the boom in 2001 to help cover the cost of public service pension and social welfare systems from 2025.

However, due to the economic meltdown, the International Monetary Fund and the European Union have insisted that a massive €12.5 billion of this fund will be re-directed to cover the country’s mounting debt.

Labour’s Pat Rabbitte said the use of NPRF funds was akin to putting the “family silver” up as collateral for the entire “bailout loan” package.

However, Taoiseach Brian Cowen insisted the decision is in the best interests of the country and will act as a vital step in solving Ireland’s economic problems.

SIPTU president Jack O’Connor said the move — and the wider plan itself — was “worse now than our worst fears”.

He said it was now clear why the union’s recommendation to invest €2 billion from the NPRF every year for the next three years to help bolster the economy was ignored.

“It is now clear why the National Recovery Plan unveiled last week provided for no investment in the economy from the NPRF. The fund was earmarked to be poured into the black hole that the Irish banking system has become,” Mr O’Connor said.

“The agreement is a shameful indictment of the right-wing policies which have informed the Government’s approach for the last 13 years and which now dominate thinking in the EU institutions as well.

“The plan should have been announced in Lourdes because, short of a miracle, it is doomed to failure,” he added.

A meeting of the ICTU to discuss the issue is due to take place over the coming days.