EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 14 May 2010 
on a bilateral loan between the Internat ional Monetary Fund and the Oesterreichische 
Nationalbank 
(CON/2010/40) 
 
Introduction and legal basis  
On 9 April 2010, the European Central Bank (ECB) received a request from the Austrian Ministry of 
Finance for an opinion on a draft Federal law on a bilateral loan agreement between the International 
Monetary Fund (IMF) and the Oesterreichische Nationa lbank (OeNB) (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 OeNB. In  accordance with the first sentence of 
Article 17.5 of the Rules of Procedure of the Euro pean Central Bank, the Governing Council has adopted 
this opinion. 
 1. Purpose of the draft law 
1.1 The draft law authorises the OeNB to grant the IM F a loan of up to EUR 2 180 million on behalf of 
Austria and within the framework of a bilateral agr eement. The Minister of Finance is in charge of 
implementing the law.  
1.2 The explanatory memorandum to the draft law refers to the expansion of the IMF’s New 
Arrangements to Borrow (NAB). This expansion,  as adopted by the IMF’s Executive Board on 
12 April 2010, includes both new NAB participan t countries and additional payments from existing 
NAB participants, such as Austria. Under the expa nded and more flexible NAB, credit amounts of 
up to SDR 367 500 million (equiva lent to about EUR 429 600 million) will be available. The 
Member States have agreed to contribute EU R 128 000 million to the expanded NAB. Austria’s 
share of this contribution is EUR 3 714 million, to be funded from the OeNB’s resources. Austria 
currently provides credit arrangements under the NAB for SDR 412 million (equivalent to about 
EUR 467 million). 
1.3 The negotiations with existing and new participants  on the expansion of the NAB are not expected 
to be completed within the next 12 months, and in  view of the uncertain economic climate the NAB 
                                                           
 
1  OJ L 189, 3.7.1998, p. 42. 
2 participants have agreed to make  bilateral agreements with the IMF in the interim. The draft law 
implements such an agreement to provide an inte rim bilateral loan. The bilateral agreement with 
the IMF addressed in the draft law can be termin ated once the new NAB ag reement has been made, 
and the bilateral loan would be offset against Austria’s expanded provision of credit arrangements 
under the NAB of EUR 3 714 million.   
 2. General observations 
It is necessary to assess whether the draft law compli es with the prohibition of monetary financing under 
Article 123(1) of the Treaty, which prohibits overdraf t 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 Treaty an d 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 [now Articles 123 and 125(1) of the Treaty]
2. In particular, Article 7 of 
Regulation (EC) No 3603/93 provides that the financi ng by national central banks of obligations falling 
upon the public sector vis-à-vis the IMF is not regarded as a credit facility within the meaning of Article 123 of the Treaty
3. The draft law is similar to that a ddressed in Opinion CON/1997/16, where the 
EMI considered that the authorisation of the OeNB to  grant a loan to the IMF on behalf of Austria under 
the NAB scheme was not a credit facili ty within the meaning of Article  123(1) (then Article 104), but fell 
within the exception in Article 7 of Regulation (EC)  No 3603/93. The ECB came to the same conclusion 
with regard to a law authorising Banka Slovenije to provide payments to the IMF on the basis of bilateral 
agreements with the IMF4. The OeNB’s authority, under the draft la w, to grant a bilateral loan to the IMF 
should also be considered as falling under the excepti on in Article 7 of Regulation (EC) No 3603/93 and 
should therefore not be regarded as a form of  monetary financing prohibited by the Treaty5.  
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 14 May 2010. 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                           
 
2  OJ L 332, 31.12.1993, p. 1. 
3  The fourteenth recital of Regulation (E C) No 3603/93 states: ‘Whereas 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 the Community [the Union]  results in foreign claims which have 
all the characteristics of reserve assets; whereas it is, therefore, appropriate to authorize them’.   
4  See Opinion CON/2009/100; all ECB opinions are publis hed on the ECB’s websit e at www.ecb.europa.eu. 
5  See also Opinions CON/2010/22, CON/2009/5, CON/2008/41 and CON/2005/92.