Architect of the special savings incentive accounts (SSIA), Charlie McCreevy, yesterday advised SSIA holders to continue while lauding the success of his brainchild.
Pledging to put his money where his mouth is, the former finance minister and now EU internal market commissioner said he would also be investing the proceeds of his own SSIA into one of the new savings schemes on offer from banks.
"Most of the institutions now have very attractive schemes to keep people saving for a period of time and I will avail myself of that," said Mr McCreevy, who dismissed the concerns of some economists who fear a huge SSIA splurge will boost inflation.
"I predict that the majority of people will not grab their money and go off to the nearest public house or betting office and get rid of it in the one day. Of course, there will be people who will do that . . . It is entirely a matter for the individuals themselves.
"For a lot of people, this will be the biggest amount of money they will ever have in one go and, by saving a small amount of money, it wasn't too painful. So I am hoping that people will get into the thought of saving."
In an interview that coincides with the maturity of the first batch of SSIA accounts, Mr McCreevy said the scheme worked because it was so simple and easy to understand.
"I didn't allow the experts to muck it up. It was a Charlie McCreevy idea and I played it and it worked . . . People said it wouldn't work, couldn't work and never would work. But of course the people of Ireland aren't stupid. It was simple and attractive, it gave them a break and they took it."
Around 1.1 million people in the Republic invested in SSIAs, which were introduced in 2001 in an effort to boost saving and calm an overheating economy.
Critics have warned it could cause an inflationary bubble over the next 12 months as the schemes mature, releasing €16 billion into the Irish economy. But Mr McCreevy said these fears were overblown. "I don't think people are all as mad as the commentators that write about them think they are," he said.
"I think people are quite sane and sensible and I don't expect people to rush out [ and spend] . . . The same people who were saying that people wouldn't take up the scheme are saying this."
He also dismisses criticism that the scheme was merely a sop to the financial institutions, arguing that it was necessary to involve them to drive SSIA uptake.
"Remember they were out there in the streets beating the drum . . . I remember going to big provincial towns in Ireland in 2002, not in Co Kildare, and in the banks there would be cardboard cut-outs of me. Why? Because that proves you have to give something for the seller as well," he said. "The benefits of competition. I left a bit on the table for everyone."
Mr McCreevy said one of his big things as minister for finance was to try and encourage people to put money into their pensions and save for the future and the SSIA was intended primarily as a scheme to encourage people back to saving. "We have to tackle the problems of an ageing population. We have a bit of time in Ireland because we don't have the critical numbers, we have a young population . . . [ but] certainly people should provide for their future," he said.
On his own future, Mr McCreevy said that he would step down as an EU commissioner after his term ends in 2009.
"I am pleased and relieved," said Mr McCreevy about the deal to open the European market further for a wide range of firms offer services across borders.
"It looks like at this stage that we hopefully will be able to conclude the services directive by late this year or early next year."
Despite the warmth that many SSIA account holders will feel toward Mr McCreevy, he insisted he has no plans to re-enter Irish politics. "When I came out, I said I would do one term with this commission . . . because there might be a change of government. But even if not I decided the closing of my political career [ will be here."
• The full text of this interview is available here: http://www.ireland.com/newspaper/special/2006/mccreevy/
