EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 30 October  2020 
on the New Arrangements to Borrow with the International Monetary Fund  
(CON/ 2020/27)  
 
Introduction and legal basis  
On 2 October 2020 the European Central Bank (ECB) received a request from the Austrian Ministry of 
Finance (MoF) for an opinion on a draft law on New Arrangements to Borrow (NAB) with the International 
Monetary Fund (IMF) ( hereinafter the ‘draft law’)1. 
The E CB’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 (TFEU) and on the third indent of Article 2(1) of Council Decision 
98/415/EC2, 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 , on behalf of the Republic of Austria,  to grant the IMF a credit 
line of up to 3,636.98 million Special Drawing Rights ( SDR ) as part of the NAB. This corresponds to 
an increase of 36.98 million SDR (currently equivalent to approximately EUR 44.3 million) a s 
compared with the currently permitted maximum credit line of 3,600 million.  The draft law would 
replace the existing Federal Law on an increase of the new borrowing arrangements  with the IMF3. 
1.2 As noted in the MoF’s impact assessment of the draft law4, the draft law  relates to the failure of the 
members of the IMF to reach a majority vote on an increase of the IMF quotas as part of the 15th 
quota reform in October 2019. In order to prevent the financial resources available to the IMF 
declining drasticall y upon expiry of the existing NAB and the existing Bilateral Borrowing 
Agreements (BBA), the participa nts in the NAB agreed to double the potential resources made 
available via the NAB from 182.4 billion SDR to 364.7 billion SDR, for a new NAB period from 2021 
                                                 
1 Bundesgesetz über die Neuen Kreditvereinbarungen mit dem Internationalen Währungsfonds . 
2 Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national author i-
ties regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
3  Bundesgesetz über die Aufstockung der Neuen Kreditvereinbarungen mit dem International en Währungsfonds, 
BGBl. Nr. 114/2010.  
4  Vereinfachte wirkungsorientierte Folgenabschätzung zum Bundesgesetz über die Neuen Kreditvereinbarungen mit 
dem Internationalen Währungsfonds.  
ECB -PUBLIC  
2 to 20255. Taking into account the Republic of Austria’s current maximum credit line,  its maximum 
possible contribution  to the NAB should increase from 1,818.49 million SDR to 3,636.98 m illion 
SDR.  
1.3 As noted above, the OeNB is currently  permitted to provide, on behalf of the Republic of Austria,  a 
maximum credit line of 3,600 million SDR  to the IMF under the existing NAB. Thus, in order to 
implement the new NAB, the draft law envisages a n increase of 36.98 million SDR.  The aim of the 
draft law is to ensure that  the Republic of Austria’s po tential  contribution to the NAB of the IMF 
remains the same in relative terms . 
1.4 The MoF’s impact assessment of the draft law explains that in the event that the IMF makes a 
claim  on NAB resources, the OeNB would receive interest on the OeNB’s  contribution at the rates 
applied to SDR throughout the period during which the IMF claims those resources. The budgetary 
impact of the draft law may be either posit ive or negative, depending on whether those rates 
applied to SDR are higher or lower , respectively,  than the ECB’s main refinancing operations rate. 
In any event, the MoF estimates that the increase in the credit line granted to the IMF by the 
Republic of Austria as part of the NAB will not affect the Federal budget by more than EUR 20 
million.  
 
2. Monetary financing prohibition  
2.1 As the draft law concerns the financing of the IMF by a national central bank (NCB), the 
compatibility of t he draft law with the prohibition of monetary financing laid down in Article 123 of 
the Treaty  must be assessed in light of the specific exemption contained in Council Regulation 
(EC) No  3603/936. In particular, Article 7 of  Regulation (EC) No 3603/93 provides that the financin g 
by NCBs of obligations falling upon the public sector vis -à-vis the IMF is not regarded as a credit 
facility within the meaning of Article 123of the Treaty. Recital 14 of Regulation (EC) No 3603/93 
clarifies the rationale behind this  exemption, stating t hat it is appropriate to authorise the financing 
by the NCBs of obligations fallin g upon the public sector vis -à-vis the IMF because such financing 
‘results in foreign claims which  have all the characteristics of reserve assets’. Therefore, the 
exemption in Article 7 of Regulation (EC) No 3603/93 must be interpreted in line with this 
rationale7. 
2.2 Reserve assets are  defined as those external assets that are readily available to and controlled by 
monetary authorities for meeting balance of payments financing needs, for interventions in 
exchange markets to affect the currency exchange rate, and for other related purposes, such as 
maintaining confidence in the currency and the economy, and serving as a basis for foreign 
borrowing8. Under this definition , reserve assets must be foreign currency assets and, except in the 
                                                 
5  IMF Press release No. 20/10 dated 17 January 2020, whereby IMF Executive Board Approves Decisions to Impl e-
ment a Package on Resources and Governance Reform.   
6  Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibi-
tions referred to in Articles 104 and 104b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1).  
7  See, for example,  paragraph 3.1 of ECB Opinion CON/2017/4.  All ECB opinions are published on EUR -Lex. 
8  See International Monetary Fund, Balance of Payments and International Investment Position Manual (Sixth ed., 
2009), paragraph 6.64.  
ECB -PUBLIC  
3 case of  gold bullion, must be claims on non- residents9. The granting of loans  by the OeNB  under 
the NAB with the IMF on behalf of the Republic of Austria , as set out in the draft law , falls within the 
exemption of Article 7 of Regulation (EC) No 3603/93 because this financing results in foreign 
currency (SDR) -denominated claims of the OeNB  against the IMF ( a non-resident ) that have all the 
characteristics of reserve assets.  
2.3 Based on the foregoing, the ECB considers that the authorisation of the OeNB to grant loans under 
the NAB with the IMF as envisaged by the draft law is compatible with the monetary financing 
prohibit ion. 
 
This opinion will be published on EUR -Lex. 
 
 
Done at Frankfurt am Main, 30 October 2020.  
 
[signed]  
 
The President of the ECB  
Christine LAGARDE  
                                                 
9  See paragraph 3.2 of ECB Opinion CON/2017/4.