EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 18 October 2010 
on an increase of the New Arrangements to Borrow with the International Monetary Fund 
(CON/2010/74) 
 
Introduction and legal basis  
On 9 September 2010, the European Central Bank (ECB)  received a request from the Austrian Ministry 
of Finance for an opinion on a draft Federal law on an increase of the New Arrangements to Borrow 
(NAB) with the International Monetary F und (IMF) (hereinafter the ‘draft law’). 
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third indent  of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Central Bank by national authorities regarding draft 
legislative provisions1, as the draft law relates to the Oesterreichische Nationalbank (OeNB). In 
accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central 
Bank, the Governing Council has adopted this opinion. 
 1. Purpose of the draft law 
1.1 The draft law authorises the OeNB to increase on be half of Austria, the credit limits for the NAB 
with the IMF to a maximum of SDR 3 600 million. Th e Minister for Finance will be in charge of 
implementing the law. 
1.2 The draft law will enter into force on the date on which the NAB enters into  force. At the same 
time, the Federal Law on a bilateral loan betw een the International Monetary Fund and the 
Oesterreichische Nationalbank
2 and the Federal Law on Austria’s participation in the new 
arrangements to borrow with the International Monetary Fund3 will cease to apply. These laws will 
apply, for the last time, to loans granted before the draft law enters into force. 
1.3 The increase in the NAB, as approved by the IM F’s Executive Board on 12 April 2010, includes 
both credit lines from new NAB participant countri es and additional credit lines from existing NAB 
participants, such as Austria. Under the expanded and more flexible NAB, credit amounts of up to 
SDR 367 470 million (approximately EUR 436 720 milli on) will be available. The EU Member 
States have agreed to contribute approxima tely EUR 128 000 million to the expanded NAB. 
Austria’s share of this contribution is SDR 3 600 mi llion and this is to be funded from the OeNB’s 
                                                             
1   OJ L 189, 3.7.1998, p. 42.  
2   BGBl. I No 70/2010. 
3   BGBl. No 64/1998. 
2 resources. Since 1998, Austria has participated in the NAB with a current amount of SDR 408 
million (approximately EUR 485 million).  
 
2. General observations 
It is necessary to assess whether the draft law complies with the prohibition on monetary financing under Article 123(1) of the Treaty, which prohibits, inter alia , overdraft facilities or any other type of credit 
facility with national central banks in favour of central  governments. This prohibition is subject to certain 
exceptions contained in Article 123(2) of the Tr eaty and in Council Regulation (EC) No 3603/93 of 
13 December 1993 specifying definitions for the applica tion of the prohibitions re ferred to in Articles 104 
and 104b(1) of the Treaty
4. In particular, Article 7 of Regulation (EC) No 3603/93 provides that the 
financing by national central banks of obligations falling upon the public sector vis-à-vis the IMF is not 
regarded as a credit facility with in the meaning of the Treaty5. The draft law is similar to that addressed in 
Opinion CON/1997/16, where the EMI considered that th e OeNB’s authorisation to grant a loan to the 
IMF on behalf of Austria under the NAB scheme was not a credit facility within the meaning of the 
Treaty, but fell within the exception in Article 7 of  Regulation (EC) No 3603/93. The ECB came to the 
same conclusion with regard to laws authorising Banka Slovenije6 and the OeNB7, respectively, to 
provide payments to the IMF on the basis of bilatera l agreements with the IMF. The OeNB’s authority, 
under the draft law, to increase the credit limits for the NAB should also be considered to be within the 
exception in Article 7 of Regulation (EC) No 3603/93 and should therefore not be regarded as a form of 
monetary financing prohibited by the Treaty8. 
It is also necessary to ensure th at the possible euro liquidity injections under the NAB do not interfere 
with the implementation of the single monetary po licy. Under paragraph 23 of the IMF’s Proposed 
Decision to Modify the New Arrangements to Borrow, there is a presumption that the IMF will notify the 
respective central bank at least five business days prior to the settlement of a possible drawing. This will 
allow for possible euro liquidity injections under th e NAB to be taken into account when implementing 
the single monetary policy.  
                                                             
4  OJ L 332, 31.12.1993, p. l. 
5  The 14th recital of Regulation (EC) No 3603/93 provides: ‘W hereas the financing by the central banks of obligations 
falling upon the public sector vis-à-vis the International M onetary Fund or resulting from the implementation of the 
medium-term financial assistance facility set up within th e Community results in foreign claims which have all the 
characteristics of reserve assets; whereas it is, therefore, appropriate to authorise them’. 
6  See Opinion CON/2009/100. All ECB opinions are publis hed on the ECB’s websit e at www.ecb.europa.eu. 
7  See Opinion CON/2010/40. 
8 See also Opinions CON/2005/29, CON/2008/41, CON/2009/5 and CON/2010/22.  
3  
This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 18 October 2010.  
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET