Index for March 2012

Volume 11, Issue 3

  • (Air Transport World, Silver Spring MD, 22 March 2012) The US Senate has voted against re-authorization of the Export-Import Bank, casting more uncertainty about the future of the federal credit agency that will soon reach its $100 billion cap. A large proportion of Ex-Im Bank’s portfolio is loans and guarantees to ensure financing for sales of new US aircraft to foreign airlines. The agency is sometimes colloquially referred to as “Boeing’s bank.” [As we noted in last month's What's New, Ex-Im has become the subject of a heated political debate in the USA, dividing Republicans and Democrats as well as the airline industry.]
  • (Halifax Initiative, Ottawa, 15 March 2012) In 2010, Barrick Gold requested financing for the Pascua Lama mine from a public financing agency in the United States (Ex-Im Bank) and months later, from Export Development Canada (EDC). Communities affected by the gold megaproject sent information to both public institutions regarding the company’s operations and requested that the financing be denied. Two years later, Barrick has withdrawn its requests.
  • Australia's Productivity Commission hearing puts spotlight on Australia's Export Credit Agency

    (Jubilee Australia, Sydney, 20 March 2012) Australia’s Export Finance and Insurance Corporation needs urgent reforms to address the agency’s legislative exclusion from the Freedom of Information Act and lack of transparency, says Australian civil society organisation, Jubilee Australia in a 4 page brief to the Commission.
  • (Eyes on the Forest, Sumatra, 27 March 2012) Asia Pulp & Paper (APP) has been accused of a “double default” on international creditors, after an investigation revealed that the company has decimated tropical forests it promised to conserve under “legally binding” debt restructuring agreements with export credit agencies. The 2004 agreements covered the restructuring of $6 billion in debt to the taxpayer-backed export credit agencies of Germany, Japan, France, Austria, Sweden, Finland, Italy, Spain and Denmark.
  • (International Law Office, London, Until recently, Norwegian credit institution Eksportfinans ASA administered the official export credit scheme. Eksportfinans is jointly owned by a consortium of banks (85%) and government (15%). On November 18 2011, following a public debate regarding a possible permanent exemption from the new EU Capital Requirements Directive regulations for Eksportfinans, the government announced it will establish a public entity to assume responsibility for the scheme offering subsidised interest (CIRR) loans. During and after this debate, Eksportfinans was downgraded several times by international credit rating agencies.
  • (Vancouverdesi, Vancouver, 2 March 2012) Berlin is pressuring the incoming boss of European aerospace giant EADS, Tom Enders, to better defend German interests in the company, the business daily Handelsblatt reported on Friday... The German government’s coordinator for aerospace has written a letter to Enders, expressing “great concern” over an apparent decision to make Toulouse in France the group’s main centre of gravity... Ever since EADS was set up in 2000 out of a combination of the aerospace and defence interests in Germany, France and Spain, Berlin and Paris have always jealously sought to maintain the delicate balance of power in the company...  The Financial Times reports that the German government has sparked a furious row by calling on EADS to put more Germans in top posts at aircraft subsidiary Airbus or risk losing Berlin's development aid and export-credit guarantees.
  • (The National, Abu Dhabai, 19 March 2012) Japan's export credit agency JBIC is proposing an increase in its budget as it seeks to secure the fossil fuels vital to the country's economy amid a nuclear shutdown.
  • (Reuters, London, 8 March 2012) - Clean energy projects in Europe are increasingly turning to export credits to plug a financing gap, a valuable sticking plaster as some banks desert the sector due to the global economic crisis... Government export credit agencies (ECAs) boost deals either through direct project lending or loan insurance, and supplied new business worth over $800 billion last year, according to the Berne Union trade association... They traditionally back big-ticket exports to emerging economies which banks view as too risky, sometimes earning a bad press for supporting deals including aircraft and weapon sales to countries with uncertain human rights.
  • (Globe & Mail, Toronto, 13 March 2012) Worried that credit markets remain fragile and underserved, the Harper government is poised to extend Export Development Canada’s emergency domestic lending powers for another year. The decision, expected Tuesday, means EDC, a Crown export credit agency, will continue to be able to provide loans and insurance to companies for their Canadian operations... The extension has raised concerns that EDC may be crowding out private lenders and causing some confusion with the activities of its sister agency, the Business Development Bank of Canada. Experts said there could eventually be trade implications because the EDC has used the powers to help Montreal-based Bombardier Inc. sell aircraft to domestic carriers, such as Toronto-based Porter Airlines Inc.