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Through changing times

Export Credit Guarantees of the Federal Republic of Germany from 1949 - 2022

History of the Federal Government’s Export Credit Guarantees

For more than 70 years, the Export Credit Guarantees of the Federal Republic of Germany have supported and assisted German Exporters and the banks that fund their business in their foreign activities. Over the past years and decades, the so-called Hermes Cover has become a central instrument of German foreign trade promotion. Whether during the Asian or the Russian crisis, the debt crisis in Latin America or the financial crisis the Export Credit Guarantees have always been a reliable partner of the German export industry. And they are still alive and kicking. Always geared to the needs and interests of German export industry, they flexibly adapt to the constantly changing political, economic and regulatory changes. At the same time, they remain loyal to their guiding principle: Protect Germany exporters and export finance institutions against bad debt losses for political and commercial reasons. Thus, they make an important contribution to growth, prosperity and employment in Germany.

70 years Export Credit Guarantees – this is 70 years of foreign trade promotion at its best.

The 1905s

1949	“Gesetz über die Übernahme von Sicherheitsleistungen und Gewährleistungen im Auslandsgeschäft” (Act on the provision of cover in export business) passed. The Federal Government commissions a private consortium with the management. 9 November: First meeting of the Interministerial Committee (IMA) in Frankfurt-Hoechst
1952	Wholeturnover Policies (APG) launched.
1957	The first rescheduling agreement with Argentina leads to the founding of the Paris Club.

Export transactions and financing operations covered under Export Credit Guarantees of the Federal Government

The projects presented here are representative for export transactions realised during the past 70 years. The focus is on the particular eligibility for support in connection with coverage of the export transactions and financing operations taking into account the following key issues:

OUTSTANDING FINANZING OPERATIONS

DEVELOPING COUNTRIES

INFRASTRUCTURE PORJECTS

SMALL AND MEDIUM-SIZED EXPORTERS (SME)

SUSTAINABILITY

The 1960s

1960	Integration of the statutory cover limit for Export Credit Guarantees in the annual Budget Law of the Federal Republic. Introduction of cover for buyer credits introduced.
1963	First comprehensive reduction of the uninsured percentages.
1964	First coinsurance agreement with the Swiss export credit agency ERG, the precursor of today’s SERV.

The 1970s

1972	Introduction of cover for exchange rate risks.
1973	Establishment of cover facilities for leasing transactions.
1975	Airbus delivery covered for the first time.
1976	Another reduction of the uninsured percentages. Introduction of the 5 per cent alternative for buyer credits with concurrent reduction of the waiting period in the event of a loss.
1977	The Statutory Cover Limit exceeds 100 billion German mark.
1978	Arrangement on Guidelines for Officially Supported Export Credits (OECD Consensus) adopted.
1979	Securitisation Guarantees, i.e. the possibility to assign claims under buyer credit cover, introduced. Today, this product is experiencing a renaissance.

The 1980s

1980	Major revision of the Wholeturnover Policies (APG); the risk of protracted default with regard to private-sector buyers included.
1981	The debt crisis commences. First rescheduling of Poland’s debts in the Paris Club. In 1983, it is followed by Mexico, Brazil and African countries.
1984	Revision of the “Guidelines for the Issuance of Export Credit Guarantees”. The risk of protracted default included in medium-term single transaction cover for private-sector buyers (Ausfuhrgarantien).
1985	Cover for project finance provided for the first time. The Statutory Cover Limit amounts to 100 billion euros.
1986	So-called trust model introduced, i.e. the possibility of providing buyer credit cover in favour of foreign banks via a German trustee. At the same time, “assignment models” and progress payment are introduced. Major reform of the terms of cover through a revision of the General Terms and Conditions for the main products of Export Credit Guarantees: supplier credit, buyer credit and manufacturing risk cover.
1987	Important IMC decisions on the cover policy and its practical implementation published in the ECA-Report.

The 1990s

1990	Hermes Cover provided in favour of companies in the new federal states in former East Germany.
1992	Cover facilities for transactions based on countertrade deals (so-called barter or compensation trade) with CIS countries made available.
1993	Existing Soviet debt rescheduled in the Paris Club for the first time.
1994	Revision of the OECD Consensus. German premium system providing for a uniform premium to be paid replaced by variable premiums based on five country risk categories.
1996	Uninsured percentage for the risk of protracted default reduced. Largest rescheduling in the Paris Club agreed with Russia.
1997	The Federal Government ends providing cover for short-term transactions with private-sector buyers in EU countries. Website for the Export Credit Guarantees launched on the Internet.
1998	Uniform OECD-wide premium system for political risks (“Knaepen Package”) introduced First reinsurance treaties concluded with the export credit agencies ECGD (United Kingdom), OeKB (Austria) and COFACE (France).
1999	Euler Hermes and PwC are named the “World’s Best Export Credit Agency” by the readers of the UK-based Trade Finance Magazine for the first time. On 7 October, the 1188^th IMA meeting is the first to be held in the new capital Berlin. 50^th anniversary of the Export Credit Guarantees celebrated in November.

The 2000s

2000	A Prognos study demonstrates that the Export Credit Guarantees safeguard about 216,000 jobs in Germany. Framework credit cover introduced.
2001	Introduction of the OECD Environmental Guidelines (Common Approaches). APG-Online-Service makes reporting of turnover via the Internet possible. Project information published on the Internet.
2002	OECD Sector Understanding on Export Credits for Ships adopted. Possibility that the Federal Government assumes a share in the legal cost incurred in the claims management introduced.
2003	Wholeturnover Policy Light (APG-light) introduced. Export guarantee products are renamed “Export Credit Guarantees of the Federal Republic of Germany”.
2004	www.agaportal.de website launched together with the Investment Guarantees and the Untied Loan Guarantees as central web page for the Federal Government’s foreign trade and investment promotion schemes. The event series “Exportkreditgarantien des Bundes im Dialog mit der Wirtschaft“ („Federal Export Credit Guarantees in dialog with industry“) starts at the Federal Ministry of Economic Affairs and Climate Action in May.
2006	Introduction of the Counter-Guarantee. New, risk-adjusted system of buyer surcharges introduced for the calculation of the premium. Russia repays outstanding debts under the rescheduling agreement ahead of schedule.
2007	OECD Sector Understanding on Export Credits for Civilian Aircraft (ASU) adopted.
2008	Introduction of Revolving buyer credit cover. Greater flexibility in the inclusion of foreign deliveries and local costs in the cover. Reinsurance treaty with US EXIMBANK signed; this brings the number of bilateral agreements with other export credit agencies to 22.
2009	60^th anniversary of the Export Credit Guarantees of the Federal Republic of Germany celebrated on 15 December. Option to reduce the uninsured percentage to 5 per cent against a premium surcharge introduced as part of a package of measures in support of the economy during the financial and economic crisis.

The 2010s

2010	Export credit cover for service providers introduced. Total cover provided reaches a record 32.5 billion euros in 2010.
2011	Introduction of the Buyer Credit Guarantees “express” (FKD-express), which provides cover for buyer credits within four bank working days. General Terms and Conditions of Cover for transactions with private-sector buyers and public-sector buyers unified. The German terms “Garantie” and “Bürgschaft” are replaced by the uniform term “Deckung”. Minimum premium rates for commercial risks involved in transactions with credit periods of more than two years introduced within the framework of the OECD premium system.
2012	Revised version of the Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (“Common Approaches”) adopted; the social impact assessment is explicitly included in its title (Environmental and Social Due Diligence). New wording of the OECD Consensus becomes effective. The main new element is the Sector Understanding on Export Credits for Renewable Energy, climate Change Mitigation and Adaptation, and Water Projects which includes climate protection.
2014	The OECD Sector Understanding on Export Credits for Rail Infrastructure with longer credit periods for officially supported export finance takes effect. The Federal Government broadens the availability of cover for selected sub-Saharan countries to make also medium and long-term transactions with public buyers possible. Dr. Hans Janus, long-standing member of the board of management of Euler Hermes Aktiengesellschaft responsible for the state export credit guarantees, retires in December.
2015	As of 01 January, Ms Edna Schöne succeeds Dr. Janus as member of the company’s board of management. Image in motion: Explanatory film about the Export Credit Guarantees. A study of the ifo Institute shows that the Export Credit Guarantees safeguarded and/or newly created about 200,000 jobs in Germany in 2012. To these about 100.000 jobs abroad have to be added.
2016	The Chinese state export credit agency Sinosure and Euler Hermes Aktiengesellschaft sign a bilateral reinsurance treaty. It is the first agreement of this type with a state export credit agency of a non-OECD country. New “49 PLUS” system for foreign deliveries differentiates only between export transactions with foreign content amounting to up to 49 per cent and exceeding 49 per cent in connection with single transaction cover. This makes applying for an Export Credit Guarantee easier. The Federal Government adopts the strategy paper “Neue Impulse für den internationalen Wettbewerb um strategische Großprojekte – Chance für Deutschland verbessern” (New impetus for international competition for large-scale strategic projects – improving the opportunities for Germany). First reinsurance framework agreement with a multilateral Islamic Institution, the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), signed. The Federal Government adopts the National Action Plan for Business and Human Rights (NAP) to implement the corresponding guiding principles of the United Nations on a national level.
2017	Hermes goes digital: The myAGA customer portal offers exporters and banks the possibility of submitting applications for cover and managing them online. The Export Credit guarantees open their own YouTube channel and inform interested parties on LinkedIn. An information and liaison office for the Export Credit Guarantees opened in Dubai as a pilot project. The new Covered Bond Guarantee as supplementary cover complementing Buyer Credit Guarantees facilitates refinancing for banks via their own “Pfandbriefgeschäft” (covered bond business).
2018	The Federal Government facilitates exports to Africa and adopts measures to support SMEs. Digital Supplier Credit Guarantee Hermes Cover click&cover export introduced for standardised business of SMEs. Applications for buyer credit cover or manufacturing risk cover can solely be submitted online. Bilateral reinsurance framework agreement between the Russian export credit agency EXIAR and Euler Hermes signed.
2019	Introduction of the digital product Hermes Cover click&cover BANK for standardised small-ticket finance (up to 5 million euros). Digital interface provides a direct link from the customer portal myAGA to the IT systems of financing partners. Euler Hermes, OeKB (Austria) and SERV (Switzerland) decide to intensify their cooperation in the area of state export credit guarantees to support exporters from the German-speaking “D-A-CH” region and SMEs in international competition. The Federal Government establishes competence centres with financing experts at the German foreign Chambers of Industry and Commerce at Dubai, Singapore and Nairobi. The IMC marks the 70^th anniversary of the Export Credit Guarantees.

The 2020s

2020	Coronavirus crisis The Federal Government adopts a package of measures to support the German export industry during the crisis caused by the COVID-19 pandemic, e.g. facilitating financing and refinancing and to improve their liquidity during the Corona crisis. The Federal Government, France, Finland, Italy and Norway agree on a temporary debt moratorium for ECA-financed cruise ships. Based on an EU Commission’s decision, the Federal Government extends cover facilities to include so-called marketable risks. Introduction of Shopping-Line-Cover as special form of a Buyer Credit Guarantee intended to facilitate access for German exporters to solvent foreign buyers’ procurement programmes. As part of the climate strategy for the Export Credit Guarantees, the Special Renewable Energies Initiative expands cover facilities for renewable energies transactions. At the same time, cover for certain climate-damaging transactions is restricted.
2021	As part of the modernisation of the OECD Consensus, the limit on cover for local costs raised to 40 per cent of the export order value in the case of buyers from OECD high income countries and 50 per cent for all other buyers.
2022	Debt moratorium for ECA-financed cruise ships and EU exemption for marketable risks end as planned on 31 March. The temporary measures in support of the German export industry during the coronavirus crisis end on 30 June 2022.