Opinion of the European Central Bank of 27 January 2010 on the tasks of the Magyar Nemzeti Bank relating to Hungary’s membership of the International Monetary Fund  (CON/2010/13)
Date: 2010-01-27
Institutions: European Central Bank
Subjects: Hungary, International Monetary Fund, central bank, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 27 January 2010 

on the tasks of the Magyar Nemzeti Bank relating to Hungary’s membership of  

the International Monetary Fund 

(CON/2010/13) 

Introduction and legal basis 

On 6 January 2010 the European Central Bank (ECB) received a request from the Hungarian Ministry of 

Finance for an opinion on a draft law integrating several amendments to the Articles of Agreement of the 

International  Monetary  Fund  (IMF)  into  Hungarian  law,  as  well  as  amending  the  Law  on  the  Magyar 
Nemzeti Bank (MNB)1 (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  provisions2,  as  the  draft  law  relates  to  the  MNB.  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  Under  Hungarian  law3,  generally  binding  international  agreements  to  which  the  Republic  of 

Hungary is a party have to be incorporated into national law by means of a legal act. The Articles 

of Agreement of the IMF (hereinafter the ‘Articles of Agreement’) as they stood on 6 May 1982 

were incorporated into Hungarian law by Law-Decree 6 of 1982. The main purpose of Articles 1 to 

5  of  the draft  law  is  to  implement  the  amendments  to  the  Articles  of  Agreement  since  1982  (the 
Third, Fourth and the Fifth Amendments4) in Hungarian law. 

1.2  Article 1 of the draft law implements the Third Amendment to the Articles of Agreement, which 

concerns  the  consequences  of  a  Member  State  failing  to  fulfil  any  of  its  obligations  under  the 

Articles  of  Agreement,  such  as,  among  others,  the  suspension  of  voting  rights.  As  stated  in  the 

1  
2  
3  
4  

Law LVIII of 2001, published in the Magyar Közlöny 2001/76 (VII. 5.). 
OJ L 189, 3.7.1998, p. 42. 
Article 16(1) of Law XI of 1987 on legislation. 
The Fifth Amendment consists of IMF Resolution Nos 63-2 and 63-3. 

 
 
 
 
                                                 
preamble of the draft law, the Third Amendment  to the Articles of Agreement entered into force 

under international law on 11 November 1992. Under Hungarian law, it will enter into force eight 

days after publication of the draft law. 

1.3  Article 2 of the draft law implements the Fourth Amendment to the Articles of Agreement, which 

concerns supplementing the existing reserve assets, authorising the IMF to allocate special drawing 

rights (SDRs) and the detailed regulations of the special one-time allocation of SDRs. As stated in 

the  preamble  of  the  draft  law,  the  Fourth  Amendment  to  the  Articles  of  Agreement  entered  into 

force  under  international  law  on  10  August  2009.  Under  Hungarian  law,  it  will  enter  into  force 

eight days after publication of the draft law.  

1.4  The purpose of Articles 3 to 5 of the draft law is to incorporate the Fifth Amendment to the Articles 

of  Agreement.  Articles  3  and  4  acknowledge  the  binding  force  of  the  Fifth  Amendment  to  the 

Articles  of  Agreement.  Article  5  refers  to  the  appointment  procedure  for  the  alternates  to  the 

Executive Directors; the method of calculating the total votes of the members; the possible use of 

the currency held in the Investment Account, as well as the termination of the Investment Account; 

the  possible  use  of  the  currency  held  in  the  Disbursement  Account;  and,  finally,  the  specific 

procedural regulations to be followed should the IMF sell gold assets. These Articles will enter into 

force as regulated in the amendments to the Articles of Agreement.  

1.5  Article 6 of the draft law puts in place regulations similar to those that previously existed for the 
MNB’s tasks relating to the Republic of Hungary’s IMF membership5 by amending the Law on the 

MNB. The tasks listed in Article 6 of the draft law, which will be the new Article 42/A of the Law 

on the MNB, are the following: (i) the MNB will be the agency making periodic payments to the 

IMF acting as agent on behalf of the Republic of Hungary; (ii) the MNB may issue non-negotiable 

and non interest bearing notes payable to the IMF in accordance with the Articles of Agreement; 

(iii) the MNB will perform the task of fiscal agent required by the Articles of Agreement on behalf 

of the Republic of Hungary and, in this context, the MNB will act as a beneficiary in its capacity as 

fiscal agent with respect to any amount transferred or paid to the Republic of Hungary based on the 

provisions of the Articles of Agreement; (iv) the MNB will attend to the safekeeping of the IMF’s 

foreign currency reserves held in the Republic of Hungary as a designated depository. Article 6 will 

enter into force eight days after the publication of the draft law. 

2. 

General observations 

The  ECB  reminds  the  Ministry  of  Finance  that  the  tasks  performed  by  the  national  central  banks  must 

comply with the monetary financing prohibition under Article 123(1) of the Treaty, which prohibits, inter 

alia,  overdraft  facilities  or  any  other  type  of  credit  facility  with  the  national  central  banks  in  favour  of 

5  

Presidential Board Decision 7/1982 was repealed by Law LXXXII of 2007, published in the Magyar Közlöny 2007/83 
(VI. 29.).  

2 

 
                                                 
central governments6. However, Article 7 of Council Regulation (EC) No 3603/93 of 13 December 1993 

specifying  definitions  for  the  application  of  the  prohibitions  referred  to  in  Articles  104  [now  123]  and 
104b(1)  [now  125(1)]  of  the  Treaty7  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 123 of the Treaty. The ECB notes therefore that, should there be any payment by the 

MNB of the Republic of Hungary's obligations to the IMF, such financing would fall within the scope of 

Article  7  of  Regulation  (EC)  No  3603/93  and  would  not  constitute  a  form  of  monetary  financing 

prohibited by the Treaty. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 27 January 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

6  

7  

See also other ECB opinions: CON/2009/5, CON/2009/33, CON/2009/35, CON/2009/41 and CON/2009/100, available 
on the ECB’s website at www.ecb.europa.eu.  
OJ L 332, 31.12.1993, p. 1. 

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