Exporters warn State support needed urgently

EXPORTERS HAVE urged the Government to conclude rapidly a promised State guarantee scheme to underpin their capacity to secure export credit insurance, warning that up to 12,000 jobs are at risk.

John Whelan, chief executive of the Irish Exporters Association, said hundreds of companies had been hit by the gradual withdrawal of credit insurance from the high-risk export market. A further factor was increasing insurance costs in all sectors as underwriters seek to recoup insolvency losses.

His organisation has assessed that 7,000 jobs may have been lost in the industry due to insurance-related aspects of the credit crisis and believes a further 12,000 jobs are at risk if the State guarantee scheme is not implemented urgently. “The bottom line is that for many exporters, cash flow for supply-chain needs has reached crisis point and jobs are increasingly at risk,” he said.

He had been lobbying since December for the Government to step in and support export businesses who have had credit insurance cover reduced or withdrawn by sector underwriters.

“Assurances have been given that the Government will devise a State guarantee scheme if an affordable mechanism can be developed. However, the process is proving very protracted.”

Mr Whelan said Finland last month became the latest EU member to offer its exporters a state-supported scheme.

“Insurance underwriters are facing a severe crisis as company insolvencies continue to grow. Hence, they are continuing to aggressively reduce cover and increase premiums,” he said. “Furthermore, there is little alternative to credit insurance today, as banks have tightened the conditions to provide credits or guarantees to their clients.”