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Moscow, 8th December 2008

Export Credit Agencies – Reliable Partners in economically challenging times Круглый стол «Страхование экспортных кредитов в Россиии и за рубежом: перспективы и проблемы развития» Dr. Hans Janus, Member of the Board of Management of Euler Hermes Kreditversicherungs-AG.

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Moscow, 8th December 2008

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  1. Export Credit Agencies– Reliable Partners in economically challenging timesКруглый стол «Страхованиеэкспортных кредитов в Россиии и за рубежом: перспективы и проблемы развития»Dr. Hans Janus, Member of the Board of Management of Euler Hermes Kreditversicherungs-AG Moscow, 8th December 2008

  2. General reasons for Governments to offer state export credit insurance • supporting national export industry on global markets • offering coverfacilities in areas where the private market is not (sufficiently) present • being complementary to the private market and playing a countercyclical role • creating a global level playing field for state supported export activities • making long term financing available for capital goods exports • transfer of risks from the exporters’ balance sheet to the balance sheet of the financing bank and ultimately to the state budget

  3. „Classic role“ of Export Credit Agencies (ECA) during financial crises ►act countercyclically to the general economic development ►make insurance capacity available to make export business happen ►stabilize global trade flows ►co-ordinate and combine efforts with other ECAs in order to multiply effects of concerted actions ►however: sound underwriting principles must not be abandoned

  4. Major challenges for maintaining or further increasing ECA business during economic crises ►rapidly deteriorating economic and financial situation of foreign buyers ►unpredictable changes of commodity prices, exchange rates, global demand etc. ►weakening or unavailability of security for credit (bank or parent company guarantees, pledges of assets etc.) ►investment decisions being postponed or cancelled

  5. Direct impacts of the current economic environment on ECA activities • increasing commercial risk due to economic downturn in many countries • increasing political risk as financial situation of many countries deteriorates • drying-up of liquidity: unavailability of medium and long- term financing in the banking market • strongly increasing demand for Export Credit Guarantees

  6. Appropriate reactions of ECAs under these circumstances • keep the relevant insurance programs open • intensify marketing efforts and advise for exporters, in particular for SME • continue underwriting applying increased level of caution • credit analysis on the basis of the latest financial information • maintaining price for cover on a reasonable level • Preliminary conclusions ► we are in the middle of an extremely difficult situation ► we are needed more than ever

  7. Most recent development of Euler Hermes ECA business in 2008 • Increase of business: 25% up compared to 2007 • 17 bn EUR of German exports covered until 10/2008 • Russia top priority market (No. 1 in 2007 and 2008) • claims (still) on a comparatively low level • EH elected „Best Export Credit Agency“ for the 4th time • Federal Minister of Economics and Technology Michael Glos: „The ceiling in the federal budget for Hermes Cover is by far not exhausted yet. The Federal Government is in the position to provide significantly higher cover than in previous years, in particular in order to support exports to the emerging markets“ (25th November 2008)

  8. Euler Hermes ECA business in Russia 2008 • Russia again market No. 1 in 2008 • Total exposure exceeding 7.5 bn. EUR • More than 2.0 bn EUR new export credit cover (10/2008) • Offers for cover 2.1 bn EUR (10/2008) • thereof 1.10 bn EUR (57%) based on corporate risk • thereof 0.90 bn EUR (43%) based on commercial bank risk (more than 40 banks) ► ST 900 mln EUR, MLT 1.100 mln EUR ► More than 5 bn EUR cover for German direct investment in Russia

  9. The German Government and its agents Euler Hermes and PricewaterhouseCoopers as ECA Consortium are determined to remain Russia’s leading partners in ECA supported trade, export and investment business. Thank you very much for your attention! Большое спасибо за Ваше внимание !

  10. Thank you for your attention! • Dr. Hans Janus,Manfred Bruer • Further information is provided under: • Hotline: +49 (0) 40/88 34-90 00 • www.agaportal.deinfo@exportkreditgarantien.de

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