EN ECB -PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 1 June  2012  
on the increase of Hungary ’s quota with the International Monetary Fund  
(CON/20 12/45) 
 
Introduction and legal basis  
On 20 April  2012, the European Central Bank (ECB) received a request from the Hungarian Ministry for 
the National Economy for an opinion on a draft law amend ing the Articles of Agreement of the 
International Monetary Fund (IMF) on the r eform of the Executive Board and on the increase of 
Hungary ’s quota with the International Monetary Fund (he reinafter 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 c onsultation of the European Central Bank by national authorities regarding draft 
legislative provisions1, as the draft law relates to the Magyar Nemzeti Bank  (MNB) . 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 On 15 December 2010, the IMF Board of Governors adopted Resolution No 66- 2 on the 
‘Fourteenth General Review of Quotas and Reform of the Executive Board’. This Resolution 
covers two issues,  which require the consent of the IMF member countries: (i) increases in the 
quotas of members , and (ii) an amendment t o the Articles of Agreement on the reform of the 
Executive Board, which provides that all the Executive  Directors on the IMF Executive Board will 
be elected by IMF member countries.  The quota increase will become effective only after the 
proposed amendment has entered into force. IMF member countries have committed in the same Resolution to use their best e fforts to complete these steps no later than the Annual Meetings 2012.  
1.2 The draft law w ill authorise Hungary’s Governor to the IMF, currently the Minister for the 
National Economy, to acknowledge the above mentioned amendment’s binding effect
2 on Hungar y, 
and to adopt the proposed increase in Hungary’s IMF quota by  SDR 901.6 million thereby bringing 
Hungary’s quota to a total of SDR 1,940 million. The draft law incorporates  the IMF quota increase 
into Hungarian l aw. 
                                                 
1  OJ L 1 89, 3.7.1998, p.  42.  
2  Law 50 of 2005 on the procedure related to international agreements ( Magyar Kozlony , 2005/8, 2005.6.16) provides for 
the rules on acknowledging the binding effect of an international agreement.  
ECB -PUBLIC 
2  Article 5 of the draft law appoints M NB as paying agent with regard to the quota increase.  
However, t he draft law is silent o n the specific scope of MNB’s role in the quota increase.  
Therefore , the ECB understands that Article 38(1) of the Law on the MNB applies, which means 
that the scope of  MNB ’s paying agent  role with regard to th e payment of Hungary’s quota increase 
will be the same as the role that MNB already has with regard to Hungary’s payments of its current 
quota3. 
Under Article 38(4) of the Law on the MNB, the MNB holds, as a deposi tory, the IMF’s foreign 
exchange assets held in Hungary. The payment of the quota increase therefore would result in the 
change of the structure of the  MNB’s  reserves on the one hand, and in an increase of the MNB’s 
balance sheet assets and liabilities on the other, which would acquire the IMF quota in return for the SDR 901.6 million.  
 
2. Monetary financing  
Several ECB opinions
4 have noted that the tasks performed by a national central bank must  comply 
with the monetary financing prohibition under Article 123 of the Treaty and Council  Regulation 
(EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the  
prohibitions referred to in Articles 104 and 104b(1) of the Treaty5. Pursuant to Article 7 of  
Regulation (EC) No 3603/93, the fin ancing 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. Accordingly, any possible payment by the MNB  of the proposed increase 
in Hungary ’s IMF quota complies with Article 7 of Regulation (EC) No 3603/93 and does not 
infringe the monetary financing prohibition.  
 3. Central bank independence  
The ECB understands that the fiscal agent functions entrusted to the MNB in connection with 
Hungary’s IMF  membership, pursuant to Article 38 of the Law on the MNB, are without prejudice 
to MNB’s  management of the SDRs in a fully independent manner in line with the principle of 
central bank independence enshrined in Article 130 of the Treaty and Ar ticle 7 of the Statute of the 
European Central Bank and of the European System of Central Banks
6. 
                                                 
3  Pursuant to Article 38 of the Law  on the MNB, the MNB is the paying agent for the amounts payable periodically to the 
IMF on behalf of Hungary, from appropriate sources determined by law or in a directly applicable Union legal act, also 
including the payments in connection with the partic ipation in the Special Drawing Rights Department of the IMF. The 
MNB may issue non -negotiable, non -remunerated notes payable to the IMF on demand. In this context, the MNB is the 
authorised body on behalf of Hungary to establish and implement all the opera tions and transactions that may be carried 
out pursuant to the Articles of Agreement of the IMF, including acting as a beneficiary in its capacity as a fiscal agent with respect to any amount transferred or paid to Hungary on the basis of the Articles of A greement of the IMF. Thus, it 
is incumbent on the MNB to make the payments to the IMF in relation to the increase of Hungary’s IMF quota.  
4  See the most recent opinions: CON/2011/68, CON/2011/89 and CON/2011/97 and CON/2011/102 . All ECB Opinions 
are available  on the ECB’s website at www.ecb.europa.eu.  
5  OJ L 332, 31.12.1993, p. 1.  
6  Similarly, see CON/2011/102.  
ECB -PUBLIC 
3  
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main, 1 June 2012.  
 
[signed]  
 
The Vice -President of the ECB  
Vítor CONSTÂNCIO