Michael Kitt (Galway East, Fianna Fail)

I am grateful for the opportunity to contribute to the debate, which I welcome. I would also welcome the endorsement of the programme by the House, which is important. In my time in the House, I have heard strong criticism of the IMF and I have criticised the organisation, which has always been regarded as the bad wolf. I heard much of the criticism at the Oireachtas Joint Committee on Foreign Affairs, of which I was a member for 20 years. I chaired a sub-committee on overseas development and I served as a Minister for State with responsibility for the Irish Aid programme. There were good reasons to criticise the conditions, for example, imposed on developing countries by the fund. However, the IMF has gone into other European countries, including the UK, our nearest neighbour, and it has been of assistance.

There was a great deal of praise for the organisation on "Morning Ireland" where it was not considered to be as bad as the ECB or the EU. It is interesting that there are various views on the IMF. It was always mentioned in the same breath as the World Bank and people often referred to the difficult conditions it imposed in economic partnership agreements. Some of them did not favour poorer countries as much as they should. However, an €85 billion fund will be provided. Ireland would have had to borrow €50 billion in any event to provide public services. Of the remaining €35 billion, we will provide half and the Minister for Finance stated clearly that €10 billion will be used to recapitalise the banks. That has also been subject to criticism but we have had serious problems in the domestic banking system, which, at its peak, was five times the size of the economy, and it is under severe pressure. It is important that we should address the banking issues as well as the broader economic issues.

The IMF-EU programme of financial support for Ireland is a good deal and it ensures that we have the necessary funds to maintain key public services overseen by the Departments of Social and Family Affairs, Health and Children and Education and Skills, which are big spenders. I refer to views expressed by Irish MEPs in the European Parliament when they discussed this issue. Mr. Gay Mitchell MEP welcomed the arrival of the EU and the IMF and said, "Up until now, credit rating agencies and markets have been deciding what happens to governments so I am glad to see these private sector agencies being replaced by public agencies like the ECB, EU and IMF". Mr. Jim Higgins MEP claimed that if the IMF had come in two years ago, it would have saved a great deal of pain and repayments. The media is reporting important debates in the European Parliament and they have stated clearly what is happening.

This programme concludes that Ireland requires a strong performance to restore domestic and external confidence and it is important to reorganise the banking sector. The Minister stated that we need to fundamentally downsize this sector and there has to be a programme for growth and job creation. This package and the four-year national recovery plan will put our public finances on a sound footing and will promote job creation. Getting people back to work is the most pressing priority of the Government.

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