EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 11 August 2005 
at the request of the Austrian Federal Ministry of Finance  
concerning a draft Federal law on the payment of a contribution by Austria to the trust fund 
administered by the International Monetary Fund for low income developing countries affected by 
natural disasters 
(CON/2005/29)  
 
1. On 25 July 2004 the European Central Bank (ECB)  received a request from the Austrian Federal 
Ministry of Finance for an opinion on a draft Federal law on the payment of a contribution by Austria to the trust fund admi nistered by the International Monetary Fund for low income 
developing countries affected by natural disasters (hereinafter the ‘draft law’).  
2. The ECB’s competence to deliver an opinion is based on the third indent of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consul tation of the European Central Bank by national 
authorities regarding draft legislative provisions
1, as the draft law contains provisions concerning a 
national central bank (NCB). In addition, the ECB notes that it is necessary to ascertain whether the 
draft law complies with the prohibition on moneta ry financing laid down in Article 101 of the 
Treaty establishing the European Community, since ensuring compliance with that prohibition is 
part of the ECB’s role under Article 237(d) of the Treaty to ensure that the NCBs fulfil their Treaty 
obligations2. In accordance with the first sentence of Ar ticle 17.5 of the Rules of Procedure of the 
European Central Bank, the Governing Council has adopted this opinion.  
3. The draft law authorises the Oesterreichische Na tionalbank (hereinafter the ‘OeNB’) to make a 
deposit on a special account with the Internationa l Monetary Fund (IMF) in the amount of up to 
seven million Special Drawing Rights (SDRs), i.e. EUR 8.4 million. In the wake of the tsunami disaster, on 21 January 2005 the IMF’s Executive Bo ard resolved to create a trust fund to be 
administered by the IMF to aid Poverty Reduction and Growth Facility eligible countries that had 
been affected by natural disasters by granting them ‘soft’ loans at below market rates.  
4. It is intended that the loan portfolio which th e IMF is aiming to raise of around 45 to 65 million 
SDRs, or approximately EUR 54.4 to 78.6 million, will be raised by capital contributions from IMF 
                                                     
 
1  OJ L 189, 3.7.1998, p. 42. 
2 See also Recital 9 to 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 Tr eaty (OJ L 332, 31.12.1993, p. 1), which 
provides that notwithstanding the role a ssigned to the Commission pursuant to Article 169 of the Treaty, it is for the ECB 
to ensure that the NCBs honour the obl igations laid down by the Treaty.   
 
2 members. These are the amounts calculated on the basis of the demand from countries that have 
been affected by the tsunami disaster (e.g. the Ma ldives and Sri Lanka), the debts of countries that 
have been affected by disasters in recent years and from anticipated natural disasters. The OeNB 
will contribute to the subsidies by making a deposit on a special IMF account that will invest the funds in the market. The OeNB will in return r eceive deposit interest of 0.5% per annum and the 
IMF’s Natural Disaster Emergency Assistance subsidy account, which is an extension of the IMF’s Emergency Post Conflict Assistance account, will r eceive any net income from investment of the 
funds. The deposit will have a maximum term of five  years. The costs to Austria will be incurred 
indirectly due to a reduction in the OeNB’s profits  as a result of depositing funds with the IMF at a 
deposit rate which is below the market rate. 
5. As mentioned briefly in paragraph 2, the draft la w should be examined to determine its conformity 
with the prohibition on monetary financing containe d in Article 101 of the Treaty, which prohibits, 
inter alia , overdraft facilities or any other type of cred it facility with the NCBs in favour of central 
governments. This prohibition is subject to certain  limited exemptions cont ained in Article 101(2) 
of the Treaty and in Regulation (EC) No 3603/93. In particular, Article 7 of Regulation (EC) 
No 3603/93 provides that ‘The financing by the … national central banks of obligations falling 
upon the public sector vis-à-vis the International Monetary Fund … shall not be regarded as a 
credit facility within the meaning of Article 104 of the Treaty’. Recital 14 to Regulation (EC) 
No 3603/93 sets out the rationale behind this exempt ion, stating that it is appropriate to authorise 
the financing by the central banks of obligations  falling upon the public sector vis-à-vis the IMF as 
this financing results in foreign claims which have all the characteristics of reserve assets.  
The ECB considers that the OeNB’s financing of  the abovementioned IMF-administered initiative 
falls within the scope of this exemption, and should not therefore be regarded as a form of 
monetary financing prohibited by the Treaty.  
6. This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 11 August 2005. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET