Paschal Mooney (Fianna Fail)

I thank the Leas-Chathaoirleach.

Over the past five years the IMF has had an ambitious programme of reform. As the Minister of State correctly pointed out, this is the latest in a series of reform mechanisms. The previous Administration introduced similar legislation at the beginning of the process in 2010. The executive board will be reduced to 20 members from 24 and they will be elected. As the Minister of State said, prior to this its members were appointed. It has been a source of criticism globally, not from countries such as Ireland but from developing countries, that there has been an unfair weighting in terms of who is on the board. Perhaps the new quota system will provide an opportunity for emerging economies.

There is continuing criticism about the fact that the head of the IMF and the head of the World Bank are appointed, and that a nice little arrangement seems to exist between the US, which usually takes the position of president of the World Bank, and Europe, which takes the IMF position, with Christine Lagarde in the position at present. I do not raise this in order to change it although there are those who are critical of it. It is important and relevant from an Irish perspective that we have somebody with a European background, and with regard to the EU, Christine Lagarde had a very strong and warm relationship with the current and previous Administrations here when she served as French Minister for Finance. Her sentiments were very positive towards Ireland.

It was rather unfortunate, and I use the word cautiously, that Dominique Strauss-Kahn had to step down because there had always been a perception, in this country and others, that the IMF was a great bogeyman and when it came into a country it effectively decimated its economy. However, it became apparent from the public statements of Dominique Strauss-Kahn, prior to and during his tenure of office, that he was very concerned the fragile economies which the IMF entered would not be further eroded or destabilised by the fiscal policies traditionally pursued by the IMF. There are stories going way back about the manner in which it effectively reduced economies and the people in them to almost penury. There is a new awareness, particularly in light of the international banking crisis that started in 2008 and which has affected all countries. I want to put on the record that we are not unique in this regard. Some might say the previous Administration was unlucky to have been there when it happened, but it happened and we are now dealing with its aftermath.

This particular reform is very positive. I appreciate the Minister of State will put a positive spin on it but I understand that while there will be some financial advantages to the country they will be quite small. The Bill does not say exactly what they will be but I suppose one must be thankful for small mercies in the current climate, and any reduction in Ireland's financial liability must be welcomed.

We would prefer if the IMF was not here, in a sense dictating Irish economic policy, but that is what is happening. Interestingly, from reading letters to The Irish Times certain people seem to suggest it is manna from heaven that the IMF came here because successive Administrations did not bite the bullet in terms of stricter and tighter economic and fiscal policy. It took the IMF to wake us up and make us take the decisions we have taken. However, even with its committed support of €22.5 billion from the extended fund facility, loans under the EU-IMF programme of assistance to the end of last September amounted to €26.5 billion. Loans from EU sources amounted to €17.6 billion, while loans from the IMF amounted to €8.9 billion. We are talking megabucks in terms of the impact on the economy. It is sad these are loans rather amounting to a free lunch. The country must address this matter and is doing so. I wish the Government well in its efforts to ensure this happens, with particular reference to the promissory notes. It is morally unjustified at this point in the development of the banking crisis that a promissory note of €30 billion is still hanging over us like the sword of Damocles because much has moved on since the giving of the bank guarantee in 2008; the environment has changed completely and we will be left in an impossible position unless the Government seeks adjustments. I know it is very much aware of this.

I would like to think sentiment for Ireland is positive because we are seen as being model pupils, an awful term to use when one considers the reality of our economic situation. However, if we are adjusting and complying, painful as it may be, and seeing a spark at the end of a long dark tunnel, surely there must be reciprocation on the part of the European Union. This is not a case of giving back the money or sending it up in smoke, rather it is about an adjustment to allow the country to manage its way out of the economic morass in which it finds itself in an orderly fashion to give some hope to the people. It is all about hope and confidence, like everything else. Therefore, I hope any attempts the Government is making in this regard will be successful.

In spite of our compliance record under both the previous and current Administrations which I applaud, there was one significant criticism by the IMF since the budget, namely, that the budget decision to reduce capital spending was too severe. Perhaps it was not a criticism as such, but it raised eyebrows, offering a view the Government might have gone a little too far in the reduction on the capital side as distinct from the current side. The only reason I raise this issue - it is an old chestnut at this stage, as the Minister of State is well aware - is I genuinely believe that if we were to spend a little more public money on the roads and infrastructure in general, we would create jobs. It is a Keynesian approach to economics that now seems to be out of favour in the austerity-led German-French alliance. However, the Government would do itself and the country a great favour if it were to consider this point in the context of the budgetary position and try to find avenues to explore such as the establishment of a bank of reconstruction or perhaps using pension funds to stimulate the economy.

Like the Minister of State, I commend the legislation which is an important step along the road towards full reform of the IMF. It is important that Ireland is seen to be an active participant in that regard.