Michael McGrath (Cork South Central, Fianna Fail)

That is modest but it is welcome. It will be of greater benefit in 2013 when it will take full effect and brings the IMF interest rate down to a far more reasonable level. In that respect, the changes being made are welcome. Increasing Ireland's quota will have the effect of reducing the interest rate being charged.

It would be remiss of us not to acknowledge the important role the IMF has played as a key partner for Ireland as the country goes through significant economic difficulties. When one considers the negotiation of the programme of assistance last November and the changes the Government has secured since then, it is clear the IMF has been an important ally of Ireland in seeking to bring about those changes. When the previous Government sought to have burden sharing with senior bondholders included in the deal last November it is known that the IMF was supportive of the Government's position, but it was vetoed by the European Central Bank. When the current Government sought to achieve the same objective, the support of the IMF was again forthcoming. However, the result was not achieved, again because of the intransigence of the European Central Bank.

The IMF is making €22.5 billion available to Ireland, which is one third of the external funding being provided to Ireland under the EU-IMF programme of assistance. As the Taoiseach correctly pointed out in his letter to President Van Rompuy prior to last week's important European Council summit meeting, the Irish people and the State have paid a very high price for recapitalising our banks. At a cost of €63 billion, it was done at a time when there was no European fund available for Ireland or, indeed, any other eurozone country for recapitalising their banks. Since the decision of the European Council summit last July, the European Financial Stability Facility, EFSF, can now potentially be used as a source of funding to recapitalise European banks. We support the efforts of the Government in seeking to have the recapitalisation costs incurred by Ireland, particularly the promissory notes structure, renegotiated in that context, given that there is now a fund for the recapitalisation of banks at far more reasonable interest rates. The banks in Ireland were recapitalised in the absence of that fund and against the backdrop of the insistence by the European Central Bank that no bank in the eurozone should be allowed to fail and that no burden sharing could be imposed on senior bondholders. The debate must be seen in that context.

Clearly the measures in the reform package that commenced in 2008, which were partially enacted by the House earlier this year and we are completing that process today, result in an increase in Ireland's influence with the IMF. That is most welcome. The IMF has been an important partner for Ireland as we seek to implement successfully the programme of assistance negotiated with the EU and the IMF. The Bill is quite short. A small number of sections deal with technical issues. There is a reduction in the number of executive directors from 24 to 20, with a provision that all of them will now be elected. This replaces the situation whereby hitherto the five largest members got to appoint their own executive director. That is now discontinued. There is also a provision whereby, with an 85% majority of the total voting power, the governors may increase or decrease the number of executive directors. The elections to the board will be conducted at two yearly intervals.

These build on the earlier reforms which have been approved. It is appropriate that Ireland play its part in completing the ratification process efficiently and, hopefully, with the full support of all sides of the House. It should be acknowledged that the IMF has approved Ireland's drawdown of a further €3.9 billion under the programme of assistance. This will bring the total for 2011 to approximately €13 billion of the total amount of approximately €22.5 billion being made available.

This is being debated against the backdrop of an ongoing crisis in Europe. I am not going to go into the details because it stretches the test of relevancy to the limit.

There have been developments, even in the past 24 hours, such as the fact that the Italian ten-year bond spreads have again breached the 7% mark. The ratings agencies are expected to make announcements over the next number of days which may well have an impact on the credit ratings of many European countries. Ernst & Young issued a report today predicting growth in the eurozone economy next year to be 0.1%. Clearly, the country and Government continues to face enormous challenges in achieving the fiscal targets for 2012.

The budget has been announced and will be put into effect. The targets are based on a growth level of 1.3% which may be over optimistic but only time will tell. We hope the targets can be achieved and, more importantly, that a level of confidence can come back into the economy which will filter down to consumers and businesses which are trying to bring the country out of very severe economic difficulties.

The reaction of the markets to last week's summit has been underwhelming. The view of our party is well known on that issue. While the fiscal compact was agreed last week, the details of which have yet to be worked out, the issue has to be addressed. It will not address in any way the short-term funding difficulties of the eurozone economies such as Italy and Spain which will have significant refinancing challenges over the next number of weeks. Given the interest rates the markets are currently imposing on those countries, the funding cliff which is clearly evident will pose enormous difficulties for them and the entire eurozone.

I suspect we may well have another round of crisis summit meetings, building on the outcome of last week's summit. It is to be hoped they will agree more short-term measures that can inject some confidence into the market and result in the role of the European Central Bank being clarified and improved in order that it can act as a normal central bank, become a lender of last resort and give the market some confidence that Europe can work its way out of these difficulties.

We are in support of the Bill. It is an important step forward in the reform of the IMF. It brings benefits for Ireland in terms of the increase in the Irish quota in the IMF which will directly result in a further reduction in the interest rate being charged on the loans made available to us. It is to be hoped if all of the other countries can ratify these measures the interest rate reduction will come into effect in October 2012 and will result in significant savings, particularly in 2013 and for the remainder of the programme.

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