Michael D'Arcy (Fine Gael)

The IMF dates back to the end of the Second World War when it was established along with the World Bank. Certain procedures and requirements were stipulated for each institution; everything was more or less carved up in that the senior person in the IMF was to be a European, while his or her counterpart in the World Bank was to be an American. This stood the test of time until Mr. Strauss Kahn ran into his difficulties in New York and there was a substantial play to seek the position of senior person within the IMF when candidates from Israel and Mexico were in the race. Even though Christine Lagarde won the day, we are moving towards a new world order and an era in regard to the position of developing countries. The previous world order was established with the United Nations, the IMF, the World Bank and others after the Second World War, but within the past 15 to 20 years, especially in the past ten, that order of great countries, with the power and resources they possess, is changing. That is the way it should be. The figure being quoted is 6% towards the nations in waiting. The agreement is in place and anything we say or do in this House will not change that position. This legislation must be concluded before next meetings are held in October.

The IMF has been the subject of substantial criticism by people who have worked within the organisation and by others outside it in other organisations. It is a matter of opinion. The term "bogeyman" was used on the other side of the House, but the organisation has been called much worse than this. It all comes back to the manner in which its representatives come to a country, do not negotiate but dictate as far as practicable what the arrangements will be. We are experiencing this to some degree. Far too often countries were not prepared to do the difficult thing and others had to come in who were not very concerned about what had happened in the past or other historical considerations within a country. They reduced everything significantly. Unfortunately, on too many occasions people are not prepared to give up what they have. "What we have we hold" is an expression used by people worldwide, not only in Ireland. During the summer I read a book about what had happened in the United States when some cities went bankrupt. Even though this had happened, those employed by the cities in question refused to accept any pay reduction. This happens worldwide. People do not like to accept reductions, but they tend not to negotiate as extensively as a government must do.

In November 2010 when the troika came to town, the concern was there would be a calamity, but it has proved to be much more accommodating than many had anticipated. I am very glad that one point is clear, namely, that the troika, particularly the IMF, has agreed to look at the promissory notes issue in the context of the recapitalisation of Irish banks. For one institution, Anglo Irish Bank, the numbers are in the region of €30 billion of the €63 billion due and I am satisfied there will be a result. Normally, bodies of that nature do not negotiate and there is no outcome or result that is satisfactory to all parties to the discussions.

On that basis and because no one was representing this House, a number of weeks ago I travelled to Berlin with the finance committee. I paid my own way because I was not included in the roll-call of those travelling and it was a trip worth taking. If there is a governmental agreement with financial implications for German taxpayers, the German Government will have to put the question before the budgetary committee of the Bundestag. We can all participate, not only at governmental level but also in our parties and at parliamentary committee level to try to advance these issues. I refer to the 1% reduction. We will take anything that is offered. We would like to receive more than 1%, but if that is the figure agreed to, so be it. It is a considerable result on the promissory notes issue and most welcome.

The view has been expressed in both Chambers of the Oireachtas that there is a moral obligation on us to pay all of the national debt.

However, all of us, despite our different political mindsets, agreed when we met the Bundestag finance committee that one message had to be delivered, which was that there is a differentiation between the national debt that everyone agrees we are morally obliged to pay - this is how we pay, for example, our civil servants, the old age pension and child benefit - and the socialisation of bank debt, which is now considered to be sovereign debt. We delivered that message and parties from different strands of the political spectrum were on board.

I refer to the information about the troika review that was released earlier relating to the memorandum of understanding and the potential a portion of the funds accruing from the sale of State assets being made available to the Government to assist job creation. We all accept that no country can get out of financial difficulties such as these without economic growth. According to the ESRI, an increase in GDP of 1% equates to 40,000 jobs. The objective is to get people back to work and I am pleased and satisfied that everything is not doom and gloom, which was the impression created prior to the visit of the EU-IMF delegation to Dublin. They see sense. We are meeting our targets, unlike others. For example, Spain is in significant difficulty with the European Commission tonight. If there is going to be a success under the programme, it will be Ireland. It is not pleasant, easy or nice but we can get there.