90% of exporters want to stay in euro

Wed, Nov 24, 2010, 00:00

MORE THAN 90 per cent of exporters want Ireland to remain in the euro zone, according to a survey conducted for the Irish Exporters Association.

Approximately 45 per cent of the exporters who responded said they dealt in euro while 30 per cent dealt in dollars and just 12 per cent in sterling.

The survey found that Irish exporters remain very positive, with almost two-thirds of firms expecting exports to increase in 2010. More than 80 per cent of respondents said they were planning new research and development investment in the short to medium term.

The survey found that 65 per cent of respondents were targeting new markets with a diverse range of countries being involved.

Trade finance, banking and the cost of doing business were major concerns for almost half of respondents, with labour costs, energy costs and local authority costs being prime concerns.

More than one-third of exporters experienced difficulties in obtaining trade finance in 2009. The figure has increased substantially since the 2008 survey, when 3 per cent of exporters experienced difficulties in getting trade finance from their bank. Changes in banks’ relationship teams, the failure of banks to understand their business and lack of security were among the reasons cited.

However, when asked about the Credit Review Office, approximately 30 per cent of respondents said they were not aware of it. The office allows for a review of decisions by participating banks to refuse credit.

The association’s chief executive John Whelan said access to bank finance could be improved if the Government took some of the credit risk issues off the back of the banks.

“The banks traditionally were able to back up their risk exposure with credit insurance, and many OECD countries have seen their governments enter the export credit insurance market to stabilise the banking sector,” he said.

Use of export credit insurance has decreased from nearly one in four firms in 2008 to 15 per cent in 2010. Patrick Burke, a partner at Grant Thornton, which sponsored the survey, said exporting businesses were “crying out” for a Government-backed export credit insurance guarantee scheme. He said exporters would be absolutely vital to Ireland’s recovery in the coming years.