asked the Minister for Finance whether loans received from the International Monetary Fund have been conditional on the Government's giving certain guarantees regarding the conduct of their financial and budgetary policy; and whether broad agreement was reached between the Government and the International Monetary Fund on the measures proper to solving Ireland's balance of payments difficulties.
Ceisteanna—Questions. Oral Answers. - International Monetary Fund Loans.
13.
Mr. O'Leary
The drawing made on the International Monetary Fund was not conditional on any guarantees by the Government regarding the conduct of its financial and budgetary policy. The obligations assumed by the Government were no more than in the case of any member making a drawing from the Fund. These obligations relate to the repurchase which should be made at the outside within a period of from three to five years. In my reply to a question on 9th February, 1966, I gave information about the Fund's charges which operate in connection with the drawing.
When the application was made in January this year for the drawing from the Fund, the Government outlined the circumstances which led to the deterioration in the balance of payments in 1965 and the measures which were taken to strengthen the domestic situation and redress the balance of payments. It may be inferred from the Fund's approval to the drawing that it was in broad agreement with the Government's policy.
In particular, I would like to make it clear that there was no condition expressed in regard to the foreign exchange facility for travel or any other exchange control matter. I should also recall that on 8th August, 1957, this country subscribed to the Fund's Articles of Agreement which are scheduled in the Bretton Woods Agreements Act, 1957. This involved an obligation under Article VIII not to impose, without the approval of the Fund, restrictions on the making of payments for current international transactions including travel. In the case of Ireland this obligation became operative on 15th February, 1961.
Mr. O'Leary
I was tempted to raise this question last week when we had a debate on the Estimate. The question did arise about whether, in fact, we would follow the British Government's restrictions on the amount of sterling that could be used by travellers going outside the sterling area during the present crisis in Britain. The Minister did usefully say to us on that occasion that, in fact, on the loan we had secured from the International Monetary Fund, they would not agree with our restricting the amount to be spent by our travellers outside the sterling area. That tempted me today to ask whether there were some guide lines laid down by the International Monetary Fund on receipt of this loan. That was the reason I put down——
Is the Deputy asking a question?
Mr. O'Leary
I am asking a question.
It does not seem to me to have emerged yet.
Mr. O'Leary
One has to have regard to the limitations of the English language. If we speak in Irish, we may come to the point more quickly. I think it is a serious matter and the Ceann Comhairle should exercise his mind to see the seriousness of the question.
The Deputy's opinion on what the Ceann Comhairle should do is more a statement than a question.
Mr. O'Leary
There is a big question mark at the end.
That does not make it a question.
Is it not a fact that we have a right under the International Monetary Fund to make one drawing upon it? Is it in respect of any subsequent drawing that the terms and conditions must be agreed between our Government and the International Monetary Fund, and may not be departed from so long as the subsequent drawing is outstanding?
That is correct. I might say in reply to Deputy O'Leary's statement that some newspapers appeared to give the impression that the giving of the loan by the International Monetary Fund carried with it a condition that we would not reduce the amount of money in sterling available for travellers. That was not the case. There is no condition of that nature.
We are right in saying that if our circumstances were allowed to deteriorate so that we were obliged to return to the International Monetary Fund for further accommodation, that situation would arise?
Yes, but not necessarily of course.
Authority is slipping out of this House.