Opinion of the European Central Bank of 1 June 2012 on the increase of Hungary’s quota with the International Monetary Fund (CON/2012/45)
Date: 2012-06-01
Institutions: European Central Bank
Subjects: Hungary, International Monetary Fund, central bank, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 1 June 2012 

on the increase of Hungary’s quota with the International Monetary Fund 

(CON/2012/45) 

Introduction and legal basis 

On 20 April 2012, the European Central Bank (ECB) received a request from the Hungarian Ministry for 

the  National  Economy  for  an  opinion  on  a  draft  law  amending  the  Articles  of  Agreement  of  the 

International  Monetary  Fund  (IMF)  on  the  reform  of  the  Executive  Board  and  on  the  increase  of 

Hungary’s quota with the International Monetary Fund (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 Magyar Nemzeti Bank (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  On  15  December  2010,  the  IMF  Board  of  Governors  adopted  Resolution  No  66-2  on  the 

‘Fourteenth  General  Review  of  Quotas  and  Reform  of  the  Executive  Board’.  This  Resolution 

covers  two  issues,  which  require  the  consent  of  the  IMF  member  countries:  (i)  increases  in  the 

quotas  of  members,  and  (ii)  an  amendment  to  the  Articles  of  Agreement  on  the  reform  of  the 

Executive Board, which provides that all the Executive Directors on the IMF Executive Board will 

be  elected  by  IMF  member  countries.  The  quota  increase  will  become  effective  only  after  the 

proposed amendment has entered into force. IMF member countries have committed in the same 

Resolution to use their best efforts to complete these steps no later than the Annual Meetings 2012.  

1.2  The  draft  law  will  authorise  Hungary’s  Governor  to  the  IMF,  currently  the  Minister  for  the 
National Economy, to acknowledge the abovementioned amendment’s binding effect2 on Hungary, 

and to adopt the proposed increase in Hungary’s IMF quota by SDR 901.6 million thereby bringing 

Hungary’s quota to a total of SDR 1,940 million. The draft law incorporates the IMF quota increase 

into Hungarian law. 

1  
2  

OJ L 189, 3.7.1998, p. 42.  
Law 50 of 2005 on the procedure related to international agreements (Magyar Kozlony, 2005/8, 2005.6.16) provides for 
the rules on acknowledging the binding effect of an international agreement.  

 
 
 
 
                                                 
ECB-PUBLIC 

Article  5  of  the  draft  law  appoints  MNB  as  paying  agent  with  regard  to  the  quota  increase. 

However,  the  draft  law  is  silent  on  the  specific  scope  of  MNB’s  role  in  the  quota  increase. 

Therefore, the ECB understands that Article 38(1) of the Law on the MNB applies, which means 

that the scope of MNB’s paying agent role with regard to the payment of Hungary’s quota increase 

will be the same as the role that MNB already has with regard to Hungary’s payments of its current 
quota3. 

Under Article 38(4) of the Law on the MNB, the MNB holds, as a depository, the IMF’s foreign 

exchange assets held in Hungary. The payment of the quota increase therefore would result in the 

change of the structure of the MNB’s reserves on the one hand, and in an increase of the MNB’s 

balance sheet assets and liabilities on the other, which would acquire the IMF quota in return for 

the SDR 901.6 million. 

2.  Monetary financing 

Several ECB opinions4 have noted that the tasks performed by a national central bank must comply 

with  the  monetary  financing  prohibition  under  Article  123  of  the Treaty  and  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  Treaty5.  Pursuant  to  Article  7  of 

Regulation  (EC)  No  3603/93,  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 Treaty. Accordingly, any possible payment by the MNB of the proposed increase 

in  Hungary’s  IMF  quota  complies  with  Article  7  of  Regulation  (EC)  No  3603/93  and  does  not 

infringe the monetary financing prohibition.  

3. 

Central bank independence 

The  ECB  understands  that  the  fiscal  agent  functions  entrusted  to  the  MNB  in  connection  with 

Hungary’s IMF membership, pursuant to Article 38 of the Law on the MNB, are without prejudice 

to  MNB’s  management  of  the  SDRs  in  a  fully  independent  manner  in  line  with  the  principle  of 

central bank independence enshrined in Article 130 of the Treaty and Article 7 of the Statute of the 
European Central Bank and of the European System of Central Banks6. 

3  

4  

5  
6  

Pursuant to Article 38 of the Law on the MNB, the MNB is the paying agent for the amounts payable periodically to the 
IMF on behalf of Hungary, from appropriate sources determined by law or in a directly applicable Union legal act, also 
including the payments in connection with the participation in the Special Drawing Rights Department of the IMF. The 
MNB may issue non-negotiable, non-remunerated notes payable to the IMF on demand. In this context, the MNB is the 
authorised body on behalf of Hungary to establish and implement all the operations and transactions that may be carried 
out pursuant to the Articles of Agreement of the IMF, including acting as a beneficiary in its capacity as a fiscal agent 
with respect to any amount transferred or paid to Hungary on the basis of the Articles of Agreement of the IMF. Thus, it 
is incumbent on the MNB to make the payments to the IMF in relation to the increase of Hungary’s IMF quota.  
See  the  most  recent  opinions:  CON/2011/68,  CON/2011/89  and CON/2011/97  and  CON/2011/102.  All  ECB  Opinions 
are available on the ECB’s website at www.ecb.europa.eu. 
OJ L 332, 31.12.1993, p. 1. 
Similarly, see CON/2011/102. 

2 

 
 
 
                                                 
ECB-PUBLIC 

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

Done at Frankfurt am Main, 1 June 2012. 

[signed] 

The Vice-President of the ECB 

Vítor CONSTÂNCIO   

3