Bretton Woods Agreements (Amendment) Bill 2011: Committee and Remaining Stages

Section 1 agreed to.
SECTION 2
Question proposed: "That section 2 stand part of the Bill."

This section pertains to the approval and amendment of the various Schedules. The Minister of State mentioned having attended two IMF meetings in recent years and I wish to ask him a question. Ireland is part of a section of the IMF that includes Canada and a number of Caribbean countries and in late August 2010, in the context of the ongoing financial and banking crisis in Ireland, I noticed that the Canadian Minister of Finance visited Ireland. This visit did not get much publicity but shortly thereafter, a distinguished Canadian public servant called Mr. Wright was put in charge of an inquiry or investigation into the workings of the Department of Finance. During the summer, the Government denied repeatedly that anyone was coming in from anywhere to assist Ireland. However, as the Canadians chair our particular section of the IMF, the visit of the Canadian Minister of Finance was interesting to put it mildly. He did not appear to have any great public schedule but yet was photographed and announced as being in the Department of Finance.

I wish to ask a question in the context of the changes proposed in this legislation, given that the Government has negotiated Ireland into an IMF deal and the Minister of State has spoken of having been present at the IMF in Washington at least twice. I, together with colleagues from the Labour Party, met the IMF team, including Mr. Chopra and others, twice. I believe the other political parties also did so at least once but as the Labour Party met them twice, the others also may have done so. In respect of the IMF, the changes in governance structure and the small additional percentage that will go to Ireland, the Minister of State should provide an explanation to Members. He appears to be the Minister of State who is partly in charge of Ireland's relationships with the IMF. Can he outline to Members what is the story at present? Everyone has been provided with a memorandum of understanding and I refer to the conditionality therein, particularly in the back pages. Ireland must report to the IMF on a weekly basis about how are the State's cash balances, inflows and outflows. We must report further information on a monthly basis and also have the conditionality that is set out, on a quarter by quarter basis, in the memorandum of understanding with the IMF and the European Union. It is commonly agreed that the IMF wrote the deal because it has experience of doing so in a different set of countries.

I acknowledge the Minister of State's primary responsibility is for the Office of Public Works but given that he is taking this Bill and has visited the IMF, can he indicate what exactly is the current relationship with the IMF? I know its representatives regularly visit Ireland and I understand that Mr. Mody is the person with whom most Members would be familiar in this regard. Is there a resident IMF observatory in Ireland? Was the Canadian visit at the end of the summer part of the IMF's preliminaries? If there are IMF people resident in Ireland at present, can the Minister of State indicate what is the composition and approach of its team? I ask because this Bill pertains to changes in governance.

As I noted earlier, I lived in Tanzania, where I encountered people who had much experience of being involved with the IMF team and where was a massive problem with governance. While listening to Mr. Chopra, I formed the impression that the IMF was, if anything, more flexible and more understanding. It did not defend these super-high interest rate and appeared to understand that growth was an essential way for Ireland to climb out of its difficulties.

I remind the Deputy that Members are debating section 2.

Yes, and I note this Bill deals with governance. The Minister of State commented in his reply on Second Stage on his take in respect of the value of the IMF deal. However, Opposition Members may perceive the difficulties of the IMF deal for the ordinary punter, who this month will pay universal social charges, that is, seven extra points of income tax — and it is tax. Moreover, pensioners who open their pension slip are finding, even if they are in receipt of a medical card or are over 70, that they are paying the universal social charge. Can the Minister of State tell Members about the changes in governance and how it operates at present? This is a point that ordinary people in Ireland, as well as ordinary Members of the Dáil and the Opposition, must be able to understand.

Before replying, may I ask a question of clarification? When the Deputy referred to Tanzania, was she referring to that country in 1980s?

Yes. I was referring to the structural adjustment programmes, as they were then called.

As the Deputy acknowledged in her contribution, the way the IMF operates today is significantly different from the way it was accustomed to operating in the 1980s. By way of clarification, the two IMF conferences I attended on behalf of the Minister for Finance took place in September or early October 2008 in Washington and the following year at about the same time in Istanbul. The Minister attended a conference in 2010. The agreement of April 2008, which this is implementing, was before my time as Minister of State. There may have been a meeting at which we would have been represented by officials rather than a Minister.

We are perhaps conflating into one question two different things. Until late last autumn we had a relationship with the IMF whereby it was multilateral body which came here and carried out a review of our economy in some detail every two years. I am sure the Deputy has read some of the reports.

Why did the Canadians come at the end of the summer?

I will come to that issue. The Canadians came because the Canadian Minister is head of what is known as the constituency. At ministerial and sub-ministerial level they visit occasionally to maintain good relations and discuss matters with us. It is part of keeping in touch with the constituency. I am sure they do the same vis-à-vis Caribbean countries. It would be wrong to see the purpose of the visit last August, which is somewhat of a holiday period in Canada as well as here, as in any way preparing for the agreement which came up at much shorter notice in the autumn. There are no resident IMF officials here but there are number of IMF officials currently in Dublin on a technical mission for a week to ten days.

We have had a long discussion about the IMF. The contention of the Minister of State is that it has changed for the better. Can he tell us the role of Mr. Wright in leading an inquiry into the functioning or non-functioning of the Department of Finance? I understand the report is finished and available. Various Opposition parties in the House were invited to meet Mr. Wright and his team, which was obviously influenced by the IMF. We refer to governance in developing countries but clearly governance issues in Ireland are of enormous importance to the IMF and reforming the Department of Finance, bringing it into line with the change in our economic status and updating it. I asked the Minister of State what the change in the relationship was, where the Wright report is and when we will receive it. Will it be postponed until after the election?

On the role of the Department of Finance, who are its Irish representatives in the IMF? It is a much coveted appointment in the upper reaches of the Irish public service. Given that we are now in hock to the IMF, are more people battling for Ireland or fewer because of the cutbacks? I ask the Minister of State to give us a picture of the changing relationship whereby we get an additional voice in the IMF. We know we are reporting to it weekly.

As with every other international organisation, we have senior officials seconded to it. At the current time there is an alternative executive director in Washington, Mr. Stephen O'Sullivan, and an adviser, Mr. Peter McGoldrick. When I was there in 2008 a different person was in place who has since returned to the Central Bank. If the Deputy wants information on the review of the Department of Finance, I will not give her an answer off the top of my head. She will have to table a question to the Minister. I do not have the information available to me.

We have used Canadians on many occasions in different fields of policy, such as General de Chastelain who worked on decommissioning.

The Canadian central bank got it right. It was very conservative and there were no runs on Canadian banks.

There is a lot to be said for the way the Canadians conduct their affairs. They are cautious and conservative and should not get into as much trouble as other larger nations. It is like Sweden and Finland, in that it is a country which does not have a reputation of being in any way domineering but can provide useful, friendly and disinterested advice and inputs. That is the value of a friendly country like Canada.

Question put and agreed to.
Sections 3 and 4 agreed to.
SCHEDULE 1
Question proposed: "That Schedule 1 be Schedule 1 to the Bill."

Can the Minister of State explain how the Schedules are constructed? Is there a resubmission of the existing articles of the IMF or is all the material in the Schedules new material by way of amendment? Is a there restatement of the existing articles with add-ons or do all the Schedules contain new material? It seems to very complex for the amount of games that are being made for it.

From reading Schedule 3, it is clear it contains the articles of agreement as currently stated, whereas the first two Schedules contain amendments.

They were consolidated into the Bill, as well as the amendments to which the Minister of State referred to in his speech.

Question put and agreed to.
Schedules 2 and 3 agreed to.
Title agreed to.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."

I thank Deputies for their co-operation in passing this legislation.

Question put and agreed to.
Sitting suspended at 6 p.m and resumed at 7 p.m.