Brian Hayes (Dublin South West, Fine Gael)

The second section provides that, for the purpose of each regular election of executive directors, the board of governors, by an 85% majority of the total voting power, may increase or decrease the number of executive directors. The effect of this provision is that the existing possibility, whereby the size of the board may be adjusted, will continue to apply to the restructured board.

The third section provides that elections to the all-elected executive board will continue to be at intervals of two years and in accordance with regulations adopted by the board.

The remaining sections 4 to 15 delete or amend existing provisions which refer to the category of appointed executive directors and include transitional provisions to govern the period between the entry into force of the amendment and the first election following such entry into force. These sections do not provide for any changes to the existing provisions beyond those resulting from the elimination of the category of appointed executive directors.

As I said at the outset, this is a short Bill designed to give effect to IMF reforms which were approved in 2010 by the board of governors, including the then Irish Minister for Finance. The changes relate to the governance framework of the IMF and are part of the ongoing process of modernising the fund and enhancing its legitimacy in today's world.

Ireland's acceptance of this amendment will contribute to the ratification process to enable the amendment to come into effect, the target date, as I stated earlier, being by the next IMF annual meeting in October 2012. The implementation of the amendment, when it becomes effective, will trigger the related quota increases and lead to a significant reduction of the interest rate on Ireland's IMF borrowings.

In summary, there are tangible benefits for Ireland from this process. The quota increase will assist in strengthening our representation and influence in the IMF and will result in reduced borrowing costs. To put it in a nutshell, up to now, as I understand it, the big countries have automatically held sway and had people appointed directly to the board of governors of the IMF. The impact of this legislative change, once it is accepted by the IMF, will be that people must be elected to the board. This recognises that the world is a different place to what it was ten or 15 years ago and, as a consequence, representatives from big and small countries must be elected. This is a fundamental reform which people have expected for quite some time. It is thus in Ireland's interest, and in the interest of the IMF membership generally, that the Bill be enacted. I commend the Bill to the House.