Credit: ajay_suresh / Wikimedia Commons (CC BY 2.0)

The Oireachtas joint committee on finance, public expenditure, public service reform and digitalisation, and Taoiseach yesterday published its report on pre-legislative scrutiny of the general scheme of the Finance (International Financial Institutions) Bill 2025.

The bill provides for Ireland to contribute up to 20 per cent of its 2021 International Monetary Fund (IMF) allocation of Special Drawing Rights (SDRs), and an accompanying grant contribution of no more than €15 million from the Central Fund, to the IMF’s Resilience and Sustainability Trust (RST).

Specifically, the proposed legislation will allow the Central Bank of Ireland to perform the actions and obligations necessary in order to contribute up to 20 per cent of Ireland’s 2021 IMF allocation of SDRs to the Loan Account and Deposit Account of the IMF’s RST on behalf of the State.

The Central Bank of Ireland has said it is supportive of this contribution, as long as any SDR contribution by Ireland is underwritten by a government guarantee and that the institution’s role in the use of SDRs in this manner is clarified and provided for within legislation.

However, the committee has queried the request of a government guarantee, noting that only two other countries are providing this.

The report recommends that the government “seek, and provide the committee with, an explanatory note from the Central Bank to clarify why a State guarantee is necessary prior to approving the bill”.

“This should outline why some countries require a guarantee and others do not, as well as the specific risk rationale in Ireland’s case,” it adds.

Chairperson Mairéad Farrell said: “The committee welcomes the intent to strengthen Ireland’s ability to support international development. However, the committee’s scrutiny of this bill identified the IMF and World Bank’s approach to international development as contested.

“Throughout our scrutiny, the committee identified a number of matters that merit further clarification as the bill progresses.

“These relate largely to the need for, and implications of, any potential government guarantee for the Central Bank of Ireland; the mechanisms for oversight and monitoring to ensure that loans are used appropriately and not misused; and the processes and consequences associated with any future loan defaults by beneficiary countries.

“We look forward to continued engagement with the Department and all relevant stakeholders as the bill advances through the legislative process.”