ECAs and emergency COVID-19 budgets

(ECA Watch, Ottawa, 30 May 2020) This month's news is dominated by vast amounts of export credit funding approved to shore up companies facing an international collapse of consumption, production and trade resulting from the world-wide COVID-19 pandemic. How much government support is going to companies vs unemployed workers is difficult to determine as the press tends to report overall corporate welfare budget estimates rather than overall support for workers. The debate on the shape of the future includes the use of continued ECA support for fossil fuels or preparation for the coming climate change crisis. Another element is the increase in short-term (< 2 years) ECA support, normally covered by commercial lenders, which has been mounted by many governments and is not subject to many of the environmental, corruption and social standards of ECAs subscribing to the OECD "Gentlemens' Agreement" designed to level the playing field of corporate subsidies to national exporters.