Michael Ahern (Cork East, Fianna Fail)

Many people ask me what the Bretton Woods system is about. It took its name - like the Maastricht treaty, for example - from the location in which the agreement was reached, in the United States in 1944. Its aim was to rebuild the international economic system and, to that end, it established a system of rules, institutions and procedure to regulate the international monetary system. It also established the International Monetary Fund and the International Bank for Reconstruction and Development.

The IMF is currently getting all the attention for reasons set out eloquently by the last and previous speakers. The actions of the IMF, particularly in African and other underdeveloped countries, has given it a somewhat toxic name. Friends of mine who have worked for many years as missionaries in Africa and other parts of the world have told me that the methods that were used under the direction of the IMF did not take into account the extreme and even inhuman hardships that were visited on individuals in those countries over the years. The IMF has now recognised that one solution does not fit every situation. In the last decade or so, in particular, it has reviewed its modus operandi, and there has been further progress under Dominique Strauss-Kahn to ensure its intervention in particular countries is tailored to their specific needs.

In the case of Ireland we have had to tie ourselves into funding from the IMF, something for which no nation would wish because of the damage to its reputation. When one borrows money from any source one is tied to rules, regulations and conditions, in other words, the small print. No matter from what source the money comes there will be conditions. Of the total financial package of which we are availing, 33% is from the IMF, with the rest coming from our European partners under the European financial stability mechanism and the European Financial Stability Facility, as well as from various individual countries such as Britain, Sweden and Denmark. Every time people raise the subject of IMF funding, it gives the impression that there is no other source of funding being made available to this country. The argument is used for political purposes and is twisted to ensure that it causes some problems for the Government. Nonetheless, the International Monetary Fund is important in giving a greater voice and more power and influence to other countries. The IMF saw that this was necessary back in 2006 when it launched a two-year programme to reform the system of quota shares. Four big countries - China, South Korea, Mexico and Turkey - were not represented on the IMF. In addition, other countries, including Ireland, were either under-represented or not represented.

The Bill before us, which provides for the articles of agreement brought forward by the IMF, gives a bigger share to ourselves on that board. In effect, that means that our interest payments will be less than they were previously. The voice and participation amendment provides for an increase in the basic votes of every IMF member to enhance the voice of low-income countries. It also gives additional representation to African countries and provides that a calculation of the basic votes will not be affected by the suspension of voter rights of any members if this arises. Ireland's quota will increase from 0.385% to 0.528%, which will lead to a reduction in the IMF interest rate being charged on the loan we are getting from the fund.

The other amendment in Schedule 2 provides for a broadening of the fund's investment authority, which includes the creation of an endowment funded by gold sales. This follows on from the approval of a new income model for the fund approved by the board of governments in 2008. It will allow the fund to generate revenue from a variety of sources.

Ireland voted in favour of the IMF amendments in 2008 and subsequently conveyed its acceptance of the associated quota interest increases. We have now been requested to convey formally our ratification of the amending articles as early as possible. Ireland will contribute to achieving the required threshold of votes which will then trigger implementation of quota changes, including Ireland's quota increase. It is important for us to ratify this measure so that we will get the benefit of reduced interest rates. It is also important to ratify it in order to give greater representation and influence by many countries who do not have their proper quota.

I also wish to mention the contribution that was made by Deputy Doherty. Effectively, he said that we should not borrow from anybody. In that case I do not know where we would get the €18 billion that must be borrowed this year. That money is to pay teachers, nurses, doctors, gardaí and the Army, as well as running schools and building new schools and hospitals. I would like the Sinn Féin party to explain in detail where that money would come from. Sinn Féin Deputies have been peddling this argument without saying where the money would be obtained in the years ahead. They have a responsibility to explain that point. Their colleagues north of the Border do not seem to have any great problem in cutting back on social welfare, education and health expenditure. Do we have two Sinn Féin parties?

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