EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 12 March 2010 
on Austria’s contribution to the Poverty Reduction and Growth Trust of the IMF 
(CON/2010/22) 
 
Introduction and legal basis  
On 9 February 2010, the European Central Bank (ECB)  received a request from the Austrian Ministry of 
Finance for an opinion on a draft Federal law on Austria’s participation in financing International 
Monetary Fund loans to the poorest developing countries (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 (TFEU) and th e third indent of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consulta tion of the European Central Bank by national 
authorities regarding draft legislative provisions1, as the draft law relates to the Oesterreichische 
Nationalbank (OeNB). In accordance with the first sent ence 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 23 July 2009, the Executive Board of the International Monetary Fund (IMF) approved wide-
ranging modifications to upgrade its concessional fi nancial facilities for low-income countries. The 
decision adopted by the IMF’s Executive Board est ablishes a Poverty Reduction and Growth Trust 
(PRGT), replacing and expanding the former P overty Reduction and Growth Facility-Exogenous 
Shocks Facility. The PRGT includes new financially improved credit lines that are considered to be 
more adapted to low-income countries’ needs. According to the explanatory memorandum to the 
draft law, a total of SDR
2 400 million as additional bilateral co ntributions is needed. Given the 
Austrian share of the total quota of donor countries,  the Austrian contribution to the IMF’s subsidy 
accounts is SDR 3.9 million (approximately EUR 4.4 million). 
1.2 The draft law authorises the OeNB to contribute, on behalf of Austria, SDR 3.9 million, in the 
reform of IMF loans to the poorest developing countries (i.e. low-income countries). The OeNB 
will provide funds that will help replenish the IMF’s subsidy accounts. From a legal and economic 
point of view, the OeNB’s contribution is regarded as a donation. Thus, the OeNB has no 
repayment claims vis-à-vis the IM F or third parties. The explanatory memorandum to the draft law 
                                                             
1  OJ L 189, 3.7.1998, p. 42. 
2   A special drawing right (SDR) is an international reserve asset, created by the IMF in 1969 to supplement its member 
countries’ official reserves. Its value is based on a basket of four key inte rnational currencies, and SDRs can be 
exchanged for freely usable currencies.  
2 states that the contribution to the IMF’s subs idy accounts will reduce the OeNB’s revenue and 
consequently, the OeNB’s transfer of profit to the Ministry of Finance will be reduced 
correspondingly.  
 
2. General observations 
2.1 A national central bank’s (NCB’s) involvement in financing the IMF’s initiative is in principle 
government expenditure on development aid. The N CB effects this by making a direct transfer of 
funds to the IMF in lieu of to the government. In the present case, the explanatory memorandum to the draft law states that the contribution provided  for by the draft law in respect of the poorest 
developing countries would increase the le vel of Austria’s development aid.  
2.2 In view of the OeNB’s involvement in this development assistance, it is necessary to assess 
whether the draft law complies with the prohibition of monetary financing under Articles 123 TFEU whereby overdraft facilities or any other type of credit facility with the NCBs in favour of 
central governments are prohibited. This prohibition is subject to certain exemptions contained in 
Article 123(2) TFEU and in C ouncil 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 [now Articles 123 and 125(1) TFEU]
3. In particular, Article 7 of Regulation (EC) 
No 3603/93 provides that the financing 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 123 TFEU. The draft law is similar to that addressed in Opinion CON/2008/41
4, where the ECB considered that the 
OeNB’s financing of an Austrian contribution to the Heavily Indebted Poor Countries initiative fell 
within the exemption of Article 7 of Regulati on (EC) No 3603/93. Similarly, the OeNB’s PRGT 
financing under the draft law should also be cons idered as falling under the exemption of Article 7 
of Regulation (EC) No 3603/93 and therefore s hould not be regarded as a form of monetary 
financing prohibited by the TFEU.  
 This opinion will be published on the ECB’s website.  Done at Frankfurt am Main, 12 March 2010. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                           
 
3   OJ L 332, 31.12.1993, p. 1.  
4  All ECB opinions are published on the ECB’s website at www. ecb.europa.eu.