ECAs go to Market

(Finance & Trade Watch and CEE Bankwatch, Dec. 2017) Export credits are big business. Members of the industry’s Berne Union, both state and private, insured approximately USD 1.9 trillion per year between 2012 and 2016, of which USD1 trillion was state ECA insured. That amount far exceeds the total investments of multilateral lenders such as the World Bank and the regional development banks and represents some 11% of world trade Between 2015 and 2017, Finance & Trade Watch and Bankwatch, together with their national partners, researched state export credit agencies (ECAs) in seven countries of the European Union (Austria, Czech Republic, Croatia, Hungary, Poland, Romania and Slovakia). The aim of this research was to assess how the procedures and performance of these institutions comply with the relevant national, European and international regulatory frameworks. These include transparency, accountability, environmental and social standards as reflected in the OECD (Common Approaches), the EU (ECA Regulation) and the UN (Sustainable Development Goals, the Aarhus Convention and the Paris Agreement). Their report finds: a lack of ECA transparency, dubious investements, particularly in fossil fuels, projects contrary to national greenhouse gas commitments under the Paris Agreement, and OECD and EU standards and monitoring which are voluntary and unable to guarantee that prohibited investments are being approved. This has led to their involvement in a number of economically and politically-compromising projects. This first-of-its-kind research examines ECAs in the ‘new’ EU Member States and compares these with an example from the EU 15 – the Austrian ECA OeKB – as well as examples from other EU 15 countries. It shows regulatory gaps and offers a range of policy recommendations. The full report is available here and a summary here.