Former minister for finance Charlie McCreevy warned that foreign investors believed the Irish economy was “heading for trouble if the boom is let rip” in a secret aide memoire for Cabinet in 1999.
Government papers released under the Freedom of Information Act show the Minister, who presided over the early Celtic Tiger years, criticise the “huge Estimates demands” submitted by ministerial colleagues to his department ahead of Budget 2000.
He also identified “widespread, unrealistically high” expectation among the public about wage increases, tax relief and current spending, which he said threatened to undermine competitiveness. The “significant uptick” in construction costs was another development which Mr McCreevy believed “seriously threatened” Ireland’s ability to maintain economic and social progress.
The Irish Times sought copies of all Cabinet papers relating to Budget 2000 under the Act. Cabinet papers are withheld for 10 years under a 2003 amendment to legislation.
Mr McCreevy emphasised that house prices were “still rising far faster than prices more generally and far faster than any rate of earnings increase which could be acceptable from a competitiveness standpoint”.
Among his key concerns was “the perception among many foreign analysts and investors that the Irish economy is heading for trouble if the boom is let rip”.
