Derek McDowell (Labour)
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This section refers to the Schedule which sets out the terms of the agreement. I was going to ask the Minister of State to summarise the agreement for us but we will spare him that duty. How can the terms of the agreement be varied? Is it an intergovernmental agreement and is it open to amendment by the board? How can it be amended?

Noel Treacy (Galway East, Fianna Fail)
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The articles of agreement of the Council of Europe Development Bank are attached to the Bill at Schedule 1. These set out the provisions for the establishment and operation of the bank. They are being incorporated into the Bill in their entirety.

Derek McDowell (Labour)
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I appreciate that. The articles are quite detailed and set out the terms under which the bank operates. Is it an intergovernmental agreement — I presume it was part of the treaty to establish the Council of Europe — and how can it be varied or changed?

Noel Treacy (Galway East, Fianna Fail)
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That would basically be through the Council of Europe. However, it would require an Act of the Oireachtas to effect changes to it in this country in order to ensure that Ireland can adhere to them. Ireland can be party to it by accepting it in its totality.

Derek McDowell (Labour)
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I understand that. However, I am of the opinion that we are not quite ad idem on this matter. I appreciate that we must subscribe to the articles of agreement.

Noel Treacy (Galway East, Fianna Fail)
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Is the Senator referring to the genesis of the articles?

Derek McDowell (Labour)
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In a sense, yes, but I also want to know how they can be changed. I assume that, from time to time, amendments are made to the way the bank operates and that this would require amendment to the terms of the agreement appended to the Bill. In so far as that is the case, what is the process used to effect such changes?

Noel Treacy (Galway East, Fianna Fail)
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When the primary legislation is passed, it will be given the force of law and will allow Ireland to be a party of the Council of Europe Development Bank. Thereafter, any changes will have to be made by the governing board of the bank on which Ireland is represented. Ireland's representative would, therefore, either agree with or oppose any changes put forward. Such changes would be effected by means of a majority.

Derek McDowell (Labour)
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Would further legislation be required?

Noel Treacy (Galway East, Fianna Fail)
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Any major change in the status or operation of the bank would require the referral back to the Oireachtas of the legislation for amendment. However, in the normal course of events, the board of the bank would agree any changes to be made. As already stated, Ireland is represented on the board and whatever is agreed at board level, under normal banking protocols, is acceptable.

James Bannon (Fine Gael)
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Who is responsible for appointing Ireland's representative to the board? Is it the bank or the Government?

Noel Treacy (Galway East, Fianna Fail)
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The Government. The Minister for Finance would bring to the Government the name of a person to be nominated to represent Ireland on the board. Such a person would usually be a member of staff of the Department of Finance.

James Bannon (Fine Gael)
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What would be the duration of his or her membership?

Noel Treacy (Galway East, Fianna Fail)
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It would be the same as that of the board, namely, five years. This is laid down in the legislation. However, if the individual was promoted, resigned, retired or otherwise, he or she would be replaced during the period.

Derek McDowell (Labour)
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Will the Minister of State read into the record his speaking note on this section? Am I correct in saying that any borrowings made by the State will be credited to our Central Fund and will basically become part of Exchequer financing to be used in the normal way as opposed to being ring-fenced for a particular purpose?

Noel Treacy (Galway East, Fianna Fail)
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Will the Senator repeat what he said?

Derek McDowell (Labour)
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I refer to section 3(2) which states:

Any moneys received on behalf of the State from the Bank shall be placed to the credit of the account of the Exchequer and shall form part of the Central Fund and be available in any manner in which that Fund is available.

I presume this refers to the Central Fund out of which the Exchequer operates.

Noel Treacy (Galway East, Fianna Fail)
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The Senator is correct. If Ireland benefits from the bank's transactions, by virtue of its membership thereof, the money would be returned to the State in the normal way as appropriations-in-aid and would be deposited in the Central Fund.

Brendan Daly (Fianna Fail)
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Is there an Irish appointee to the bank and does the bank have an office in Dublin?

Noel Treacy (Galway East, Fianna Fail)
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I have already answered that question. The Government, following a nomination and recommendation of the Minister for Finance, would appoint a member of the Department of Finance to represent Ireland on the board of the bank.

Brendan Daly (Fianna Fail)
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An official of the Department of Finance?

Noel Treacy (Galway East, Fianna Fail)
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Yes.

Brendan Daly (Fianna Fail)
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Has someone already been nominated?

Noel Treacy (Galway East, Fianna Fail)
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No. We cannot nominate anybody until the legislation is passed.

Brendan Daly (Fianna Fail)
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What qualifications will the person be required to hold?

Jim Walsh (Fianna Fail)
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I ask that the debate be conducted through the Chair.

Mary O'Rourke (Fianna Fail)
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The person must be able to count.

Noel Treacy (Galway East, Fianna Fail)
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The person would normally have to understand public service, have a reasonable knowledge of financial legislation or have some background in banking or accountancy. The individual would need qualifications relevant to the responsibilities he or she would be expected to discharge.

Derek McDowell (Labour)
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Is it a full-time position?

Noel Treacy (Galway East, Fianna Fail)
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No, it is a part-time position. The person would just be nominated and would hold a position similar to someone who serves on a corporate board.

James Bannon (Fine Gael)
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Will the nominee be a current member of staff at the Department of Finance or could the position be filled by a person who has retired from that Department?

Noel Treacy (Galway East, Fianna Fail)
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I am not sure who the Senator has in mind. However, if he puts forward a name, we will consider the person for the position. The Government is always anxious to consider people with good qualifications for positions of this nature. In this instance, the person nominated to sit on the board will not be remunerated. The appointee will discharge his or her duties on behalf of the country as a member of the staff of the Department of Finance and for whom a salary is paid. Expenses will be paid by the State. As I understand, retired people would not be in a position to do that as the official must report directly to the Minister for Finance and indirectly to Government on this issue.

James Bannon (Fine Gael)
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The Minister of State asked me whether I knew of a suitable person. I detect a little cronyism creeping in and I hope the selection process will be fair and transparent in the best interests of the State and of the bank.

Brendan Daly (Fianna Fail)
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There was a second part to the question which the Minister of State did not catch at the time. Does the bank have an office in Dublin?

Jim Walsh (Fianna Fail)
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I ask the Minister of State to make a note of the questions because other Senators are offering.

Brendan Daly (Fianna Fail)
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There is no intention of cronyism or anything else. There must be a salary attached to this post and there must be some qualification required other than what has been mentioned. Will the job be advertised? Will the individual who is appointed to this position be required to attend international bank meetings?

Martin Mansergh (Fianna Fail)
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I refute in the strongest possible terms any notion of cronyism. This is very much a public service function. As the Minister of State said, there is no question of any lobbying for anybody and there is no salary attached. It is something performed in the course of public service duties. We should not over-glamourise and over-romanticise the function.

Paschal Mooney (Fianna Fail)
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I support the thrust of Senator Daly's argument. It is right to state it on the record. I have nothing against civil servants. Irish civil servants have a world-wide reputation for efficiency, probity and integrity but that is not the point. Precedents exist where non-civil servants have been appointed to similar positions, such as the European Bank for Reconstruction and Development and the European Court of Auditors to which two former politicians were appointed.

During the period of office of the rainbow coalition Government in the mid-1990s, Senator Daly and I co-sponsored a motion in this House to ensure that elected representatives would not be excluded from consideration for State boards. This seems to be an obsession with the Office of the Parliamentary Counsel of all Administrations. At least we managed to halt that particular slide. I suggest the Government could consider a wider trawl in the appointment process. This is the first occasion in which Ireland is involved in an important Council of Europe institution. I believe a political or non-civil servant input might be useful and that is not to cast any aspersions. I ask the Minister of State to consider it on a future occasion if it is not being done on this occasion.

Will the Irish appointee to the Council of Europe Development Bank board have any direct influence on the projects being considered? I do not wish to widen the argument but it might require a simple "Yes" or "No" answer. As I stated on Second Stage, there are a number of worthwhile projects which member states as contributors are benefiting from, such as Germany, Sweden and Italy. I cited a number of projects in Ireland that might be usefully explored. The Minister of State may have referred to them in his reply but I was unable to stay in the House for the conclusion of his Second Stage reply. What influence, if any, will that individual have? Will he or she be required to stand outside the room when Irish projects are being proposed?

Noel Treacy (Galway East, Fianna Fail)
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In response to Senator Bannon, this is the first time in my 23 years of public life that I have heard anyone accuse civil servants in the Department of Finance of being cronies of anybody in politics. I do not think they are cronies to anybody in any other Department either. It is a very independent, focused, strong, macro-operation that operates on the basis of a micro-analysis of every decision taken. There is no danger of anything like that happening.

The nominee would be a senior staff person in the Department of Finance with a track record of public service and an understanding of law, finance and public service operations. As in the case of corporate appointments, the nominee will receive no remuneration for service on the board. He or she will represent Ireland on the board and will serve the country with diligence and dutifully and will make the proper decisions in the overall interest of the bank.

In response to Senator Mooney, I stated in my closing contribution on Second Stage that Ireland does not intend to call on any resources from the bank for projects. Due to our economic situation, the Government proposes to run the economy and the projects out of our own resources and with the support of the European Union and various instruments and Structural Funds made available to us. That does not mean that in the future we may not do so.

When projects are presented to the governing board, all the member states are represented at the board. The Irish representative would be part of the decision-making process and would not have to leave the board at any time. It is a very focused board and there is no doubt that all members will discharge their duty with honour and integrity and achieve a satisfactory conclusion.

On the point raised by Senators Daly, Mooney and perhaps McDowell, the European Bank for Reconstruction and Development has a different focus. The Irish appointees have full-time posts. Two former politicians were appointed, based on their experience and qualifications. The bank's function is to look after funds and projects on a regional or national basis. It provides the funds and decisions are taken at national level on the disbursement. The Council of Europe Development Bank deals with each project as it arises. Remuneration is not paid to the Irish representative and we will only appoint the best person. There will be no office in Dublin. The bank's office is in Strasbourg.

Paschal Mooney (Fianna Fail)
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I am grateful to the Minister of State for his usual clarity when dealing with these complex issues. He has left nobody in any doubt as to the calibre of the individual who will be appointed. We wish that person well. I suggest to the Minister of State that Ireland should not stand on its pride when it comes to worthwhile projects. In the context of the Minister of State's reply about our growing economic power and strength, I referred earlier to three countries with equal economic power and strength. Sweden has a higher GDP than Ireland. Germany is normally an economic power house. Italy goes from being very good to not so very good but also has the resources required without need to rely on the bank. I hope what the Minister of State said at the end of his response will become the norm rather than the exception. If there are worthwhile projects identified — and I do not wish to go into the detail of who identifies them but I cited one possible project on the apprenticeship issue from which Germany is benefiting by way of the bank — I would not like to think that Ireland would stand back and decide it is too proud to take any money back from the bank. I remember reading as a child that we did much the same when asked to take part in the Marshall plan at a time when we could have done with it. We said we were not that poor.

James Bannon (Fine Gael)
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The Minister of State invited comment by asking me to suggest some names to him and that is where the element of cronyism crept in. I have every confidence in the officials of the Department of Finance. They are wonderful, excellent people who are an asset to the country. The Minister of State has not clarified the issue regarding the appointment of the nominee to the board.

Noel Treacy (Galway East, Fianna Fail)
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I will clarify it.

James Bannon (Fine Gael)
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Is the person a qualified accountant or solicitor or lawyer? I ask the Minister of State to clarify this for the House.

Noel Treacy (Galway East, Fianna Fail)
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I am grateful to Senator Bannon for his assurance of the quality of the people in the Department of Finance and his acceptance of their ability to do the job. The clarification is simple. The management team which meets weekly in the Department of Finance would nominate a person to the Minister for Finance, who would make his usual inquiries into the suitability of the person in question. He would then circulate a document to Ministers and take the matter before the Cabinet for a decision on his recommendation. The person appointed would then represent the country.

To address the matter raised by Senator Mooney, while there are no plans to use the Council of Europe Development Bank, it is not impossible that the Government or a local authority or financial institution would use the bank in future. Any of these bodies could borrow from the bank. If, after we have appointed our representative to the bank, an innovative opportunity were to arise which would help to stimulate the economy, we would avail of it.

With regard to the Senator's reference to Germany, following the end of the Cold War and the fall of the Berlin Wall, Germany used the bank's resources to help with its reconstruction operation in eastern Germany. The bank has been of tremendous assistance to the German Government in that area and we wish it continued success. We will not miss an opportunity for any part of the island if one presents itself in the future.

Martin Mansergh (Fianna Fail)
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Ireland is represented by public servants every day on all sorts of boards, committees and organisations. Whether it is appropriate to appoint a politician or public servant depends in part on the nature of the body in question, how political it is and the approach taken by other countries. If other countries are, without exception, putting forward as their representatives officials of their Departments of Finance, central banks or similar institutions, it would not be appropriate for Ireland to nominate a politician. Some appointees to positions in organisations such as the European Central Bank are politicians or, as in the case of the current Irish member of the ECB, officials from the Department of Finance. This is a borderline area.

Noel Treacy (Galway East, Fianna Fail)
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People do not like political appointees.

Martin Mansergh (Fianna Fail)
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I thank the Minister of State for steering the Bill through the House. Following our interesting debate this morning, Senators will agree that this is important legislation which pushes out the boat with regard to our involvement and solidarity with countries in eastern Europe and the former Soviet Union.

John Paul Phelan (Fine Gael)
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I echo Senator Mansergh's sentiments and thank the Minister of State and his officials who attended the debate. The legislation is uncontentious and welcome. I hope the board member appointed by Ireland will be suitably qualified. Our membership of the Council of Europe Development Bank will be a positive move.

Derek McDowell (Labour)
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I wish to be associated with my colleagues in complimenting the Minister of State and his officials on steering the Bill through the Houses. A difficulty arises with regard to the mechanisms we have in place for reporting on our participation in multilateral institutions, such as the World Bank, the International Monetary Fund and the European Bank for Reconstruction and Development, inasmuch as we tend to pass legislation such as this, sign the relevant cheque and forget about the matter. I am not suggesting the responsibility resides with the Department and not elsewhere but the reporting mechanisms are not good. In addition, they would not be significantly improved if we were to receive only an annual report. A mechanism is needed whereby regular reports are submitted to the overseas development sub-committee of the Department of Foreign Affairs, the Joint Committee on Foreign Affairs or another body. We must occasionally exercise oversight of the action taken on our behalf in the four or five international banks of which we are members.

Noel Treacy (Galway East, Fianna Fail)
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I do not wish to delay the House. I thank the Leader and Senators for their positive contributions, questions and comments. We have ensured we understand the direction in which we are going. This important legislation makes a major statement about Ireland's current economic position as it demonstrates that we are prepared to play a full role at every opportunity which arises in Europe. I concur with Senator McDowell that legislators are in a powerful position in passing legislation, creating an opportunity for people to represent us but failing to scrutinise the performance of the organisation on which we are represented. I have no problem taking the message to the Minister for Finance on behalf of the House that, as regards legislation already enacted and other membership opportunities, we should have a full and frank report when required or at least once per annum.