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Hermes Cover: Closer cooperation on German-Russian projects
8 December 2008
- Agreement between German export credit agency and Russia
- Euler Hermes and Vnesheconombank sign cooperation agreement
- Promotion of exports and trade
Euler Hermes Kreditversicherungs-AG, which manages the Federal Government’s export credit guarantee scheme, and the Russian Bank for Development and Foreign Economic Affairs (Vnesheconombank) signed a cooperation agreement today in Moscow. The agreement aims at promoting trade between the Russian Federation and Germany. German exporters can benefit from the agreed exchange of information and the planned support for the economy.
“Russia has been one of our particularly important partners for a long time. The agreement which has now been signed underlines this importance and is a landmark in the current economic environment. Despite the financial crisis export credit guarantees continue to be available unchanged as cover and for the financing of exports to Russia”, stated Dr. Hans Janus, member of the Board of Management of Euler Hermes Kreditversicherungs-AG, on the occasion of the signing of the agreement. Since 2005 Russia has led the field of the ten countries with the highest cover volumes. During the first 11 months of 2008 the Federal Government covered transactions with Russia worth more than EUR 2.3 billion. The total commitment concerning Russia amounts to more than EUR 7.5 billion. “Thus the export credit guarantees of the Federal Republic of Germany prove once again their leading international role”, stated Manfred Bruer, Head of Federal Export Credit Guarantees at PricewaterhouseCoopers AG WPG, which manages the export credit guarantee scheme in a consortium with Euler Hermes.
The closer cooperation on questions of export credit insurance, in particular where joint German-Russian projects in third countries are concerned, is a core element of the agreement. Besides, the agreement provides for an increased exchange of information on possible joint projects as well as a close cooperation within the framework of parallel insurance, coinsurance and reinsurance.
The new agreement supplements the network of bilateral and multilateral cooperation agreements that exist between the Federal Government and 34 other ECAs. These agreements enable German exporters to take advantage of the global flow of commodities and make it easier for them to have e.g. supplies from abroad included in the Hermes cover of their exports. This enhances the German exporters’ competitive position.
Bank for Development and Foreign Economic Affairs (Vnesheconombank) is a state-owned Russian bank and was founded in April 1924 in the Soviet Union as „Foreign Trade Bank of the USSR“. Vnesheconombank is one of the key instruments of the state investment policy and is focused on development of high-tech industry, stimulation of innovations, export of high-tech production as well as support for small- and medium-sized enterprises, thus could be called the counterpart of KfW.
The export credit guarantees (Hermes Cover) have been the most important instrument of the state export promotion scheme in Germany since 1949. The protection from bad debt losses for commercial and political reasons is a central issue especially in connection with supplies to difficult and risky markets.
