EN ECB -PUBLIC  
OPINION OF THE EUROPEAN CENTRAL BANK  
of 30 December 2022 
on Italy’s participation in the International Monetary Fund ’s Resilience and Sustainability Trust  
(CON/20 22/46) 
Introduction and legal basis  
On 22 December 2022, the European Central Bank (ECB) received a request from the Italian Minist ry of 
Economy and Finance  for an opinion on a draft legislative provision (hereinafter the ‘draft legislative 
provision’)  included in the Italian Law on the budget for the year 202 3 and for the multi -year period 2023-
25.  
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/EC1, as 
the draft legislative provision relates to the Banca  d’Italia. 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. P
urpose of the draft legislative p rovision
1.1 Background c ontext
The draft legislative provision makes provision for Italy’s participation in  the Resilience and 
Sustainability Trust (RST)  of the International Monetary Fund (IMF) . The RST was established by the 
IMF’s Executive Board on 13 April 2022, with effect from 1 May 2022. It is a loan -based trust. The 
RST resources are mobili sed on a voluntary basis from members with strong external positions who 
wish to channel their special drawing rights ( SDRs ) or currencies to support low -income and 
vulnerable middle- income countries . The RST complement s the IMF’s existing lending toolkit by 
focusing on longer -term structural challenges  that entail significant macroeconomic risks, such as 
climate change and pandemic preparedness2. The draft legislative provision is accompanied by an 
explanatory memorandum which provides additional details. W ith regard to the financial architecture 
of the RST, the explanatory memorandum clarifies that  the RST has three financial pillars: a loan 
account, a reserve a ccount, and a d eposit a ccount3. 
1.2 Contribution to the RST loan and deposit accounts  
The draft legislative provision authorises the Banca d’Italia to enter into a loan agreement to contribute 
to the RST, for an amount up to SDR 1.89 billion. According to the explanatory memorandum, the 
1 Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
2 See International Monetary Fund, IMF Executive Board Approves Establishment of  the Resilience and Sustainability 
Trust  (13 April  2022 ).  
3 On the accounts see also the IMF Proposal to establish a Resilience and Sustainability Trust of April 2022, 
paragraph  85, and Annex IV , Financial Architecture of the RST.  
ECB -PUBLIC  
2 contribution will be allocated to the loan account ( SDR 1,575 million) and the d eposit account ( SDR 
315 million) . The draft legislative provision further provides for a State guarantee to the Banca d’Italia 
in respect of the reimbursement of principal and interest due on the contribution to the RS T loan  and 
deposit accounts4. 
1.3 Contribution to the RST reserve account  
The draft legislative provision  authorises  the Ministry of Economy  and Finance to enter into a loan 
agreement to contribute to the RST , for an amount up to EUR 50 million, equivalent to SDR 31.5 
million, for 2023.  According to the explanatory memor andum, the contribution will be allocated to the 
reserve account.  
 
2. Monetary financing prohibition  
2.1 Article 123(1)  of the Treaty prohibits the national central banks (NCBs) from granting overdraft 
facilities or any other type of credit facility to public authorities and bodies of the Member States . This 
prohibition is however  subject to certain exemptions contained in Council Regulation (EC) 
No 3603/935. In particular, Article 7 of Regulation (EC) No 3603/93 provides that the financing by 
NCBs of o bligations 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. The fourteenth r ecital of Regulation (EC) No 3603/93 
clarifies the rationale behind this exemption, stating th at it is appropriate to authorise the financing by 
the NCBs of obligations falling 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 rationale6. 
2.2 Reserve assets have been 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 borrowing. 
Under this definition , reserve assets must be foreign currency assets and, other than gold bullion, 
must be claims on non- residents7. The need for availability on demand to meet balance of payments 
financing needs and other related purposes  implies  that the credit quality and liquidity  of the claims  
must be ensured8.  
2.3 The ECB understands that the draft l egislative provision is accompanied by, and must be read in 
conjunction with, the explanatory memorandum which provides additional details. These documents 
provide an interpretation of how the draft legislative provision must be understood.  
 
4  The draft legislative provision specif ies that any charges stemming from the abovementioned guarantee shall be 
covered by the payment to the State budget of the amounts available in the special accounts referred to in Article  8(4) 
of Decree -Law No 201 of 6 December 2011, converted, with amendments, into Law No 214 of 22  December  2011,  and 
the subsequent reallocation to the relevant chapters of the Italian Ministry of Econom y and Finance’s budget.  
5  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 Treaty (OJ L 332, 31.12.1993, p. 1).  
6  Consistent with this interpretation, see Opinions CON/2005/29, CON/2013/16,  CON/2017/4  and CON/2021/39 . All ECB 
opinions are available on EUR -Lex. 
7  See International Monetary Fund, B alance of Payments and International Investment Position Manual  (sixth edn., 
2009), Chapter 8, Section F, p. 111.  
8 See also paragraph 2.2 of Opinion CON/2021/39 . 
ECB -PUBLIC  
3 Contribution to the RST loan and deposit accounts  
2.4 For the exemption  laid down in Article 7 of Regulation (EC) No  3603/93 to apply to the contribution to 
the RST loan and deposit accounts  envisaged by the draft legislative provision, the terms and 
conditions of the agreement with the IMF must provide for a potential  early repayment of the principal 
amount of the resources  borrowed from the Banca d’Italia. Under this  arrangement , the SDRs 
channelled by the Banca d’Italia to the RST would be readily repayable, to meet balance of payments 
and reserve needs, so that the liquidity of the claims of  the Banca d’Italia is safeguarded with a view 
to ensuring their reserve asset status9. 
2.5 Subject to the above arrangement, t he ECB considers that  the Banca d’Italia’s loan to the IMF’s  RST 
set out in the draft legislative provision is compatible with the monetary financing prohibition,  as it 
results in SDR -denominated claims of the B anca d’Italia against an IMF -administered trust that have 
all the characteristics of reserve assets10. 
Contribution to the RST reserve account  
2.6 Regarding the contribution to the RST reserve account , the ECB recalls that this  would need to be 
pre-funded by the Ministry  of Economy and Finance, such that the contribution to the RST reserve 
account is in fact not financed by the Banca d’Italia. In this  regard, the ECB recommends that the 
draft legislative provision is clarified to explicitly state that the Banca d’Italia is to provide the 
contribution to the RST reserve account only after it has received the necessary funds from the 
Ministry of Economy and Finance. At a  minimum , the ECB expects that the procedures to be agreed 
between the IMF, the Banca d’Italia  and the Ministry  of Economy and Finance clarify that any 
financing of the Ministry’s loans to be channelled through the Banca d’Italia to the IMF would be pre-
financed by the Ministry.  In such circumstances the Banca d’Italia would only be executing the transfer 
of funds on the Ministry ’s behalf. In such case, the transfer of funds to the IMF by the Banca d’Italia  
would not give rise to a credit facility within the meaning of Article 123(1) of the Treaty and Article 
1(1)(b)(ii) of Regulation (EC) No 3603/93.  
 
3. Financial independence  
3.1 From the perspective of the financial independence required of an NCB in the Europe an System of 
Central Banks  under Article 130 of the Treaty11, the ECB takes note of the guarantee provided by the 
State under the draft legislative provision with respect to the reimbursement of principal and interest 
on the RST loan12. Also from that perspective, the ECB would welcome the pre- funding by the Ministry 
of Economy and Finance of the contribution to be provided to the RST reserve account.  
 
This opi nion will b e published on EUR -Lex. 
 
 
9 See also  paragraph 2.4 of  Opinion CON/2021/39 . 
10 See also Opinions CON/2017/4, CON/2020/27, CON/2020/32, CON/2020/34,  CON/2020/37  and CON/202 1/39. 
11  Pursuant to the principle of financial independence, Member States may not put their NCBs in a position where they 
have insufficient financial resources to carry out their tasks. See ECB Convergence Report 202 2, para. 2.2.3.  
12 See also Opinion CON/2021/39.  
ECB -PUBLIC  
4  
Done at Frankfurt am Main, 30 December 2022 . 
 
[signed]  
 
The President of the ECB  
Christine  LAGARDE