Opinion of the European Central Bank of 14 May 2010 on a bilateral loan between the International Monetary Fund and the Oesterreichische Nationalbank (CON/2010/40)
Date: 2010-05-14
Institutions: European Central Bank
Subjects: Austria, International Monetary Fund, bilateral agreement, central bank, loan, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 14 May 2010 

on a bilateral loan between the International Monetary Fund and the Oesterreichische 

Nationalbank 

(CON/2010/40) 

Introduction and legal basis 

On  9  April  2010,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Austrian  Ministry  of 

Finance  for  an  opinion  on  a  draft  Federal  law  on  a  bilateral  loan  agreement  between  the  International 

Monetary Fund (IMF) and the Oesterreichische Nationalbank (OeNB) (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  relates  to  the  OeNB.  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  The draft law authorises the OeNB to grant the IMF a loan of up to EUR 2 180 million on behalf of 

Austria and within the framework of a bilateral agreement. The Minister of Finance is in charge of 

implementing the law.  

1.2  The  explanatory  memorandum  to  the  draft  law  refers  to  the  expansion  of  the  IMF’s  New 

Arrangements  to  Borrow  (NAB).  This  expansion,  as  adopted  by  the  IMF’s  Executive  Board  on 

12 April 2010, includes both new NAB participant countries and additional payments from existing 

NAB participants, such as Austria. Under the expanded and more flexible NAB, credit amounts of 

up  to  SDR  367  500  million  (equivalent  to  about  EUR  429  600  million)  will  be  available.  The 

Member  States  have  agreed  to  contribute  EUR  128  000  million  to  the  expanded  NAB.  Austria’s 

share of this contribution is EUR 3 714 million, to be funded from the OeNB’s resources. Austria 

currently provides  credit  arrangements  under  the  NAB  for  SDR  412  million  (equivalent  to  about 

EUR 467 million). 

1.3  The negotiations with existing and new participants on the expansion of the NAB are not expected 

to be completed within the next 12 months, and in view of the uncertain economic climate the NAB 

1  

OJ L 189, 3.7.1998, p. 42. 

 
 
 
 
                                                            
participants have agreed to make bilateral agreements with the IMF in the interim. The draft law 

implements  such  an  agreement  to  provide  an  interim  bilateral  loan.  The  bilateral  agreement  with 

the IMF addressed in the draft law can be terminated once the new NAB agreement has been made, 

and the bilateral loan would be offset against Austria’s expanded provision of credit arrangements 

under the NAB of EUR 3 714 million.  

2.  General observations 

It is necessary to assess whether the draft law complies with the prohibition of monetary financing under 

Article 123(1) of the Treaty, which prohibits overdraft facilities or any other type of credit facility with 

national central banks in favour of central governments. This prohibition is subject to certain exceptions 

contained  in  Article  123(2)  of  the  Treaty  and  in  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  [now  Articles  123  and  125(1)  of  the  Treaty]2.  In  particular,  Article  7  of 

Regulation (EC) No 3603/93 provides that the financing by 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 Treaty3. The draft law is similar to that addressed in Opinion CON/1997/16, where the 

EMI considered that the authorisation of the OeNB to grant a loan to the IMF on behalf of Austria under 

the NAB scheme was not a credit facility within the meaning of Article 123(1) (then Article 104), but fell 

within the exception in Article 7 of Regulation (EC) No 3603/93. The ECB came to the same conclusion 

with regard to a law authorising Banka Slovenije to provide payments to the IMF on the basis of bilateral 
agreements with the IMF4. The OeNB’s authority, under the draft law, to grant a bilateral loan to the IMF 

should also be considered as falling under the exception in Article 7 of Regulation (EC) No 3603/93 and 
should therefore not be regarded as a form of monetary financing prohibited by the Treaty5.  

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

Done at Frankfurt am Main, 14 May 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

2  
3  

4  
5  

OJ L 332, 31.12.1993, p. 1. 
The fourteenth recital of Regulation (EC) No 3603/93 states: ‘Whereas the financing by the central banks of obligations 
falling  upon  the  public  sector  vis-à-vis  the  International  Monetary  Fund  or  resulting  from  the  implementation  of  the 
medium-term financial assistance facility set up within the Community [the Union] results in foreign claims which have 
all the characteristics of reserve assets; whereas it is, therefore, appropriate to authorize them’.   
See Opinion CON/2009/100; all ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
See also Opinions CON/2010/22, CON/2009/5, CON/2008/41 and CON/2005/92. 

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