About EKF

2012 negotiations aim at giving Danish export companies better terms

In 2012, EKF who has just taken over the Danish EU Presidency in the field of export credits shall promote a number of important issues for Denmark and Europe. One of the key issues is to enable companies to obtain short-term export credits; another is to improve the export credit options for companies exporting energy-efficient solutions.
​Today Danish and European export companies find it very difficult to insure their business transactions within the EU if the credit they are extending to their customer is longer than six months but shorter than two years. This means that the companies themselves have to take the risk of not being paid or losing the order because they cannot finance and insure the credit. State-owned export credit agencies like EKF are not allowed to compete with the private credit insurance market and thus, as a rule, EKF cannot insure business transactions with credits under two years. The private market, however, rarely insures transactions with credit terms of more than six months. This means there is a gap in the market inhibiting Danish and European companies’ international business opportunities.

Denmark to promote revision of short-term credit insurance rules
A top priority for EKF during the EU Presidency is to change the EU rules regulating the short-term credit insurance market. The European Commission sets the rules that are to be revised this year but they are set based on input from EU Member States and from business organisations as well as exporters. The Danish Presidency will work on a common ground for the Member States in connection with the pending revision. Consequently, Denmark may have to set our own interests aside in order to reach a compromise. Even so the Danish Presidency sees it as an opportunity to set the agenda and include items that are important to Denmark.

Conclusion on long-awaited climate sector understanding
Another important issue for Denmark is the conclusion of an agreement on export credits to the climate sector. Denmark has strong competencies in renewable energy and energy efficiency and would like to see these industries included in the OECD climate sector understanding enabling the industries to utilise export credits to a greater extent. Renewable energies are already included in the OECD climate sector understanding, i.a., on Danish initiative. Now several years of work is about to result in the inclusion of companies exporting energy efficiency technologies.

Cleantech companies often find it more difficult to secure financing for their business transactions as the technologies involved are new and untried. For this reason they may be in need of longer credit terms and more flexible repayment terms. It looks like they will have both.  Negotiations in the OECD on the climate sector understanding are expected to be concluded at the end of January 2012 and as EU Presidency Denmark will be responsible for the incorporation of the understanding into EU law.  

Same rules for everyone – also for China
The third area of focus for the Danish Presidency is outreach activities towards China and other countries not participating in the international export credit agreements. Western economies are already experiencing strong competition from the world’s emerging markets and low-wage countries. Add to this very little regulation of export credits in these countries and Danish and Western companies are facing serious challenges in the global competition for orders. Hope is that over time all countries will commit to a common set of rules for export credits and thereby create equal terms for all companies. 

Read the European Parliament’s report on China's export finance activities (September 2011)

EKF holds the EU Presidency for the whole year of 2012
EKF holds the Presidency on export credits all year. Cyprus, who will take over the EU Presidency in July 2012, has asked Denmark to handle the Presidency on their behalf as Cyprus does not have an export credit agency. Denmark’s work on a common approach by the EU Member States to the EU rules regulating short-term credit insurance, the implementation of the climate sector understanding and the relationship to China and other countries will therefore extend over a whole year. The negotiations will take place in meetings in Copenhagen and Brussels throughout the year.

Read more about the Danish EU Presidency at www.eu2012.dk
 
Index for robots