Dáil debates

Thursday, 24 March 2022

Bretton Woods Agreements (Amendment) Bill 2022: Second Stage (Resumed)

 

1:45 pm

Photo of Cormac DevlinCormac Devlin (Dún Laoghaire, Fianna Fail) | Oireachtas source

I welcome this opportunity to discuss the latest amendment to the Bretton Woods agreement. I thank the Minister of State and his officials for bringing this Bill before the House. My party, Fianna Fáil, will be supporting the Bill. As the Minister of State has indicated, this legislation facilitates Ireland's continued involvement in the IMF's new arrangements to borrow and implements the decision adopted by the executive board of the IMF on 16 January 2020. The Bill facilitates Ireland's participation in the 2020 NAB decision, and future decisions, by means of a credit arrangement with the IMF that will be provided by the Central Bank of Ireland, acting on behalf of the State.

The Bill amends the Bretton Woods Agreements (Amendment) Act 1999 to reflect the renaming of the ESAF Trust as the PRGT and increases "the aggregate amount of grant contributions that the Minister for Finance may pay". The Bill also amends the Bretton Woods Agreement Act 1957 "to provide for the payment of grant contributions by the Minister for Finance in respect of the Catastrophe Containment and Relief Trust, CCRT, and trust funds established or to be established by the IMF in accordance with Article V (2)(b) of the Articles of Agreement of the Fund". These measures are important in order to ensure that Ireland can fully participate in the programmes of the IMF. The PRGT is an opportunity for low-income countries to access interest-free loans for capacity-building activities that can boost domestic revenues, manage public finances and regulate financial systems, while progressing towards the UN sustainable development goals, SDGs. The catastrophe containment and relief trust supports low-income countries impacted by the most serious of natural disasters, such as those we have seen in recent years. It also assists countries battling public health disasters, such as infectious disease epidemics, with grants for debt service relief.

As of December 2021, $976 million of funding support was approved for 31 countries to deal with the Covid-19 pandemic. The fund was previously accessed to support Ebola-afflicted countries such as Guinea, Liberia and Sierra Leone. Given the current post-pandemic uncertainty and Russia's despicable war in Ukraine, international organisations like the IMF provide an important safety net for many countries and make an important contribution to the rules-based order. Undoubtedly, the recent increases in energy prices and input costs to food and materials caused by the war in Ukraine will have an impact in Ireland and other EU states. However, EU states have the capacity to deal with these crises. Increases in the costs of energy and food, in particular, may have a significant destabilising impact on lower income countries, causing great suffering for millions of people. International bodies like the IMF provide an important safety net in these circumstances. I should say, however, that their role and their financial assistance in those circumstances must be reviewed and it must be ensured that the finance provided is used for the correct purposes. That said, I welcome Ireland's enhanced participation in this programme and I will be supporting the Bill.

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