EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 9 February 2010 
on Ireland’s bilateral borrowing agreemen t with the International Monetary Fund 
(CON/2010/15) 
 
Introduction and legal basis  
On 27 January 2010, the European Central Bank (ECB)  received a request from the Irish Department of 
Finance for an opinion on a draft law amending the law on Ireland’s membership  of the International 
Monetary Fund (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 has implications for the Central Bank and Financial Services 
Authority of Ireland (hereinafter the ‘CBFSAI’). In accordance with the first sentence of Article 17.5 of 
the Rules of Procedure of the European Central Ba nk, the Governing Council has adopted this opinion. 
 1.  Purpose of the draft law 
The main purpose of the draft law is to amend the law on Ireland’s membership of the International 
Monetary Fund
2 (hereinafter the ‘Law’), to adopt and approve a bilateral borrowing agreement 
(hereinafter the ‘Borrowing Agreement’) between Ir eland and the International Monetary Fund (IMF). 
The Borrowing Agreement will be entered into in lin e with Ireland’s commitmen t to comply with the 
Presidency conclusions of the European Council meeting of 19 and 20 Marc h 2009 under which the 
Member States will provide temporary bilateral loans of EUR 75 billion to the IMF to deal with the 
international financial crisis . 
As the provision of such additional funds to the IMF is  not part of the regular IMF quota, and the Member 
States will provide these funds on the basis of bila teral borrowing agreements with the IMF, new 
legislation is needed for Ireland’s provision of add itional funds for the IMF’s activities and to define the 
scope and content of the obligations of th e CBFSAI and of Ireland towards the IMF.   
                                                 
1  OJ L 189, 3.7.1998, p. 42. 
2  Bretton Woods Agreements Act 1957 to 1999, published in Iris Oifigiuil  Nos 18/1957, 10/1969, 19/1977 and 4/1999. 
2 Section 1(b) of the draft law inserts the Borro wing Agreement as a new Schedule 2 to the Law. 
Section 1(a) of the draft law inserts a new Section 3A to the Law, pursuant to which the terms of the 
Borrowing Agreement are approved. Under the terms of the Borrowing Agreement, Ireland agrees to lend 
to the IMF on request an SDR-denominated amount up to  the equivalent of EUR 1.3 billion on the terms 
and conditions set out in the Borrowing Agreement. Unless otherwise agreed between the IMF and the 
CBFSAI, the loan will be made by way of payments to the IMF by the CBFSAI.   
Section 1(a) of the draft law also inserts a new Sectio n 3B in the Law, pursuant to which the Minister for 
Finance may guarantee, in such form and manner and on such terms and conditions as he or she thinks fit, 
either or both the payment to the CBFSAI of the prin cipal of and any interest on, any money advanced by 
the CBFSAI under the terms of the Borrowing Agreement. 
 2. General observations 2.1 On 27 January 2010, the Department of Finance informed the ECB that th e draft law was intended 
to be adopted as a matter of urgency and, pursua nt to Article 3(2) of Decision 98/415/EC which 
allows for a reduction of the minimum time limit of one month for the submission of the ECB’s 
opinion in case of extreme urgency, the Department  of Finance requested the opinion of the ECB 
on the draft law. Notwithstanding Article 3(2) of  Decision 98/415/EC, the ECB draws the 
Department of Finance’s attention to the f act that the second sentence of Article 4 of 
Decision 98/415/EC states that the ECB must be consulted ‘at an appropriate stage’ in the legislative process. This implies that the consulta tion should take place at a point in the legislative 
process that affords the ECB suffici ent time to examine the draft legislative provisions and to adopt 
its opinion in the required language versions and which also enables the relevant national 
authorities to take the ECB’s opinion into cons ideration before the legislative provisions are 
adopted.  
2.2 As recently expressed in other opinions
3, the ECB reminds the Department that the tasks performed 
by the CBFSAI must comply with the monetary financing prohibition under Article 123(1) of the Treaty which prohibits, among other things, overdraft facilities or any other type of credit facility 
with the national central banks in favour of cen tral governments. However, Article 7 of Council 
Regulation (EC) No 3603/93 of 13 December 1993 speci fying definitions for the application of the 
prohibitions referred to in Articles 104 [now Arti cle 123] and 104b(1) [now Article 125(1)] of the 
Treaty
4 provides that the financing by the 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 104 
[now Article 123] of the Treaty. Any payment by the CBFSAI of Ireland’s additional obligations to 
the IMF provided for in the Borrowing Agreement in serted into the Law by Section 1(b) of the 
draft law falls within the scope of Ar ticle 7 of Regulation (EC) No 3603/93. 
                                                 
3  See ECB Opinions CON/2009/100 and CON/2009/41. All ECB opinions are available on the ECB’s website at 
www.ecb.europa.eu.  
4  OJ L 332, 31.12.1993, p. 1. 
3  
This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 9 February 2010. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET