The Government has withdrawn a controversial finance bill in the face of opposition from Labour and Fine Gael and a concerted campaign mounted by Third World activists. The Bretton Woods Agreements (Amendment) Bill would commit Ireland to participation in an International Monetary Fund (IMF) programme which opponents claim is pushing Third World countries further into poverty.
The Bill was to have been rushed through the Oireachtas this week but following a meeting of party whips last week, it was decided to withdraw the bill. The legislation is now expected to come before the Dail in January, possibly in amended form. Earlier this year, the Minister for Finance, Mr McCreevy, reversed the previous Government's position and decided that Ireland should participate in the Enhanced Structural Adjustment Facility (ESAF) of the IMF. One section of the bill commits Ireland to contributing £7 million to this fund.
However, conscious of the precarious position of the Government parties in the Dail, the Government chief whip, Mr Seamus Brennan, has now opted to withdraw the bill rather than risk a defeat in Leinster House.
"The IMF is using ESAF to assist debt-ridden countries in a way which is having serious social consequences, with massive cutbacks in health and education," said Labour's chief whip, Mr Emmet Stagg. "Labour opposed Ireland's participation when Ruairi Quinn was Minister for Finance, and we're still opposed to it."
The provision for ESAF is the most controversial part of a wide-ranging bill which commits Ireland to several international finance initiatives. It includes a debt relief package amounting to £31.5 million over 12 years, of which £17 million will be disbursed next year. In addition to the ESAF allocation, some £15 million of this sum will be provided for World Bank and IMF debt relief funds, and £9.5 million will go on debt relief for Mozambique and Tanzania.
The bill will enable the Central Bank to accept special drawing rights (the reserve current of the IMF), thereby increasing the external reserves by £64 million. This move requires prior Oireachtas approval.
The third part of the bill will allow Ireland to contribute to the international effort to bail out the collapsed Brazilian economy. This section will guarantee the Central Bank against any losses it may incur, to the level of £34.4 million. The total international support package is worth £28.5 billion.
While the Department of Finance was anxious to see the bill enacted by Christmas so that Ireland could contribute to this bailout, officials now say this deadline has been extended to mid-February.
Mr Conall O'Caoimh of the Debt and Development Coalition, an umbrella group of Third World agencies and church bodies interested in the global debt question, said he was "very unhappy" with the bill.
"For the first time in its history, Ireland will join the group of global debt collectors. We want to see a system of accountability incorporated into the bill, which would place a great responsibility on the Minister to keep the Oireachtas informed about Ireland's activities in these areas."
