Brian Hayes (Dublin South West, Fine Gael)

I thank the Deputy for his most interesting contribution to this debate.

I thank Deputies for their contribution to and support for this Bill. I would like to address some of the points made. The Bill comprises short, technical enabling legislation whose purpose is to allow Ireland accept an amendment to the articles of agreement of the IMF, agreed by the fund's board of governors in December 2010 in conjunction with the then Minister for Finance. The amendment provides that, in future, the executive board of the IMF will be an all-elected body. At present, the five largest members are entitled to appoint their own executive directors. The removal of the category of appointed executive directors is intended to modernise the process of establishing the board. A relative shift in voting power in this direction is a key component of IMF reform and is designed to allow the fund better reflect global economic realities.

The Bill is also important because it assists the process of ratification of the 2010 quota and governance reforms at the IMF. As the Minister for Finance indicated in his introduction, when the requisite majority of IMF members, constituting 85% of the voting power, have accepted the amendment to the fund's articles of agreement, it will come into force. The related increases in members' quotas will also become effective. The target date is October 2012 in regard to the annual IMF meeting. Ireland has a direct interest in this because the increase in our quota will result in a reduction in the interest rate on our IMF borrowings.

A number of Deputies commented on the role of the IMF. Since the onset of the global financial crisis, the fund has played a key role in helping to restore global financial stability. We are particularly aware of this in the context of the EU-IMF programme for Ireland. The recent G20 summit emphasised the importance of the fund and its global symmetric role in helping to reboot the international economy, particularly the Irish economy.

Some Deputies raised the question of democratic representation in the IMF. The IMF is committed to a process of ongoing reform designed specifically to increase the representation of emerging-market and developing countries. The perception of the IMF as some kind of international financial bogeyman in the 1960s and 1970s changed dramatically in recent years because of the IMF's involvement in programme countries and because of its very firm view that the way to surmount the difficulties countries face is not only through modernisation and regulatory reform in the relevant countries but also through the stimulation of growth therein to ensure they can get out of a very difficult financial bind.

Despite some commentators' view of the IMF, this country is being held together not only by the funds that we can obtain through the European Union and European Central Bank but also by the funds that can be drawn down from the IMF. If we did not have these funds, the country would be facing an adjustment next year of approximately €14 billion or €15 billion rather than €3.8 billion. The knock-on effect on our health service, education system and communities would introduce a kind of nuclear winter for the country that no one could even contemplate.

While people may like to be polemical and present the IMF and other international funders as malign forces, the truth is that Ireland is being held together by international agencies, not only on the structural deficit side but also in respect of the funding liquidity open to our banking system, which we are slowly bringing out of the accident and emergency ward. These are the facts regardless of how one presents the matter. Our objective, as stated by the Taoiseach, Tánaiste and Minister for Finance repeatedly on entering government, is to get out of the programme as soon as we possibly can and to restore the country to full independence and sovereignty through being able to access funds on the international markets. It was interesting that voices in Europe alluded this week to the possibility that Ireland could "dip its toe" in the financial markets again later this year by obtaining some funds from external funders. This would be a sign of enormous confidence in the country considering its circumstances since the start of this crisis in late 2008.

The 2010 quota reforms, when effective, will result in important increases in the voting shares of certain parties, including China, India and Brazil, for example. The guiding principle is that the distribution of quota shares should reflect the relative weights of the fund's members in the world economy. The adjusted quotas also aim to protect the voting share of the poorest countries. The quota and governance reforms go together as a package agreed by the board of governors. The interest rate savings which will increase for Ireland when the amendment has been accepted by the relevant threshold of IMF members are a function of existing fund arrangements under which, as a country's quota increases, a larger portion of the IMF borrowing qualifies for a relatively lower rate of interest. In this regard, bearing in mind the effect of a reduction of the order of 100 basis points in anticipation of the cost of our IMF borrowing, when account is taken of both the 2008 and 2012 quota increases, the bulk of the improvement relates to the 2010 reforms, which will deliver by far the greatest part of the overall quota increase.

The Bill is particularly significant in this regard. It is necessary to enable the Government to support quota and governance reforms in the IMF. This is in the interest not only of Ireland, by virtue of the prospective reduction in the cost of our IMF loans, but also the wider membership of the IMF and that organisation's remit for getting the world economy out of its current perilous condition. I commend the Bill to the House.

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