Opinion of the European Central Bank of 18 October 2010 on an increase of the New Arrangements to Borrow with the International Monetary Fund (CON/2010/74)
Date: 2010-10-18
Institutions: European Central Bank
Subjects: Austria, International Monetary Fund, central bank, credit, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 18 October 2010 

on an increase of the New Arrangements to Borrow with the International Monetary Fund 

(CON/2010/74) 

Introduction and legal basis 

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

of  Finance  for  an  opinion  on  a  draft  Federal  law  on  an  increase  of  the  New  Arrangements  to  Borrow 

(NAB) with the International Monetary Fund (IMF) (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  Oesterreichische  Nationalbank  (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 increase on behalf of Austria, the credit limits for the NAB 

with the IMF to a maximum of SDR 3 600 million. The Minister for Finance will be in charge of 

implementing the law. 

1.2  The  draft  law  will  enter  into  force  on  the  date  on  which  the  NAB  enters  into  force.  At  the  same 

time,  the  Federal  Law  on  a  bilateral  loan  between  the  International  Monetary  Fund  and  the 
Oesterreichische  Nationalbank2  and  the  Federal  Law  on  Austria’s  participation  in  the  new 
arrangements to borrow with the International Monetary Fund3 will cease to apply. These laws will 

apply, for the last time, to loans granted before the draft law enters into force. 

1.3  The increase in the NAB, as approved by the IMF’s Executive Board on 12 April 2010, includes 

both credit lines from new NAB participant countries and additional credit lines from existing NAB 

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

SDR  367  470  million  (approximately  EUR  436  720  million)  will  be  available.  The  EU  Member 

States  have  agreed  to  contribute  approximately  EUR  128  000  million  to  the  expanded  NAB. 

Austria’s share of this contribution is SDR 3 600 million and this is to be funded from the OeNB’s 

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2  
3  

OJ L 189, 3.7.1998, p. 42. 
BGBl. I No 70/2010. 
BGBl. No 64/1998. 

 
 
 
 
                                                            
resources.  Since 1998,  Austria  has  participated  in  the  NAB  with  a  current  amount  of  SDR  408 

million (approximately EUR 485 million).  

2.  General observations 

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

Article  123(1)  of  the  Treaty,  which  prohibits,  inter  alia,  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  Treaty4.  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 the Treaty5. The draft law is similar to that addressed in 

Opinion CON/1997/16, where the EMI considered that the OeNB’s authorisation to grant a loan to the 

IMF  on  behalf  of  Austria  under  the  NAB  scheme  was  not  a  credit  facility  within  the  meaning  of  the 

Treaty, but fell within the exception in Article 7 of Regulation (EC) No 3603/93. The ECB came to the 
same  conclusion  with  regard  to  laws  authorising  Banka  Slovenije6  and  the  OeNB7,  respectively,  to 

provide payments to the IMF on the basis of bilateral agreements with the IMF. The OeNB’s authority, 

under the draft law, to increase the credit limits for the NAB should also be considered to be within 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 Treaty8. 

It  is  also  necessary  to  ensure  that  the  possible  euro  liquidity  injections  under  the  NAB  do  not  interfere 

with  the  implementation  of  the  single  monetary  policy.  Under  paragraph  23  of  the  IMF’s  Proposed 

Decision to Modify the New Arrangements to Borrow, there is a presumption that the IMF will notify the 

respective central bank at least five business days prior to the settlement of a possible drawing. This will 

allow for possible euro liquidity injections under the NAB to be taken into account when implementing 

the single monetary policy.  

4  
5  

6  
7  
8 

OJ L 332, 31.12.1993, p. l. 
The  14th  recital  of  Regulation  (EC)  No  3603/93  provides:  ‘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  results  in  foreign  claims  which  have  all  the 
characteristics of reserve assets; whereas it is, therefore, appropriate to authorise them’. 
See Opinion CON/2009/100. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
See Opinion CON/2010/40. 
See also Opinions CON/2005/29, CON/2008/41, CON/2009/5 and CON/2010/22. 

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

Done at Frankfurt am Main, 18 October 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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