Michael Noonan (Limerick City, Fine Gael)

I thank all Deputies who contributed to this debate. I would like to reply in the first instance to Deputy Boyd Barrett on the points he has just made.

The context for this Bill is the decision by the IMF governors in 2010 to propose wide-ranging governance reforms including increased representation for emerging markets and developing countries. The reforms are also designed to protect the position of smaller, poorer countries.

The Bill provides for acceptance of the amendment to the IMF Articles on the reform of the executive board. The amendment is designed to make the board more representative by making it an all elected body. This will also facilitate better representation of emerging markets. Taken together with the earlier reforms agreed in 2008, the voting shares of the emerging market and developing countries as a group will increase by well over 5%.

The change in voting power is undoubtedly an important step in the right direction. It is the outcome of lengthy discussions with the full IMF membership and is worthy of support. The quota adjustments and the reform of the board are parts of an overall package agreed by the board of governors in December 2010.

Other elements of the 2010 reforms include a review of the quota formula, which is due to be completed by January 2013, and a further review of quotas by January 2014. The 2010 reforms also include a commitment to reduce by two the number of executive directors representing advanced European countries. These measures will continue the process of adjusting quota shares to reflect shifts in the global economy and are likely to result in further increases in the share of emerging market and developing countries as a whole.

The increase in Ireland's quota at the IMF will result in a reduction in the cost of our borrowings from the fund. The Central Bank has estimated that the overall impact of the 2008 and 2010 quota changes, when effective, will be a reduction of the order of 100 basis points in the weighted average interest rate margin on the borrowings. This is a very welcome development and the Bill supports this process.

When the amendment has been accepted by the requisite majority of IMF members, the related quota increases will come into effect. This will be a very welcome development for Ireland and will result in a reduction in the cost of our borrowings from the fund. The quota increase will also assist in strengthening our representation and influence in the IMF.

Some Deputies opposing the Bill questioned the legitimacy of the IMF. I do not share these views. The Bill will assist the ongoing process of making the IMF more representative of the world as it stands today and will help strengthen the position of emerging markets in developing countries within the institution.

I thank Deputies for their co-operation in advancing the Bill.

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