JOURNALIST: Minister, the Ministry of Foreign Affairs draft law for modernization of the Export Credit Insurance Organization (ECIO) has just been adopted by Parliament. Could you please tell us briefly what this Organization is and why it is important for the Greek economy and extroversion?
K. FRAGOGIANNIS: The role of Export Credit Organizations, in general, is to provide domestic companies with financing, guarantees and insurance, in order to facilitate their activity in international markets. The critical role of these Organizations in serving national goals regarding the extroversion of the economy is therefore obvious.
What ECIO practically does –and from now the Hellenic Export Credit Company- is to insure the export credits provided by Greek exporters to foreign customers for the sale of products, services or even construction of technical works against commercial and political risks of non-payment.
I would like to emphasize the importance of this organization for small and medium-sized enterprises – which constitute the majority of enterprises in our country. The reason is simple. For large multinational companies, things are easy as there is a lot of experience, capital adequacy and know-how on the required procedures. This is not at all simple or even understandable for a Greek agricultural producer, for example, who wants to expand his activities abroad.
JOURNALIST: Tell us a little, Minister, about the operation of the Organization until today and what is the expediency of this reform?
K. FRAGOGIANNIS: The Organization has existed since 1966; since 1988, it has been operating as an independent Legal Entity under Private Law as ECIO. Greek economic reality in combination with the study of the respective international experience led to the conclusion that the present institutional framework for the insurance of export credits presented key shortcomings in successfully meeting the requirements of our country’s export activity. The new Law therefore addresses the need to modernize this body and meet the standards of the equivalent European organizations.
Let me clarify at this point that the body – both ECIO and its successor, the new Export Credit Company – has its own funds; it is not a body of the General Government, does not burden the state budget or the Public Investment Program and is not subsidized by the state.
JOURNALIST: What are the key points of the reform?
K. FRAGOGIANNIS: The main weakness of the Organization in its previous form was the inadequate range of offered services. The Hellenic Export Credit Company will offer 10 new products in the field of guarantees, insurance and financing, covering the needs of both Greek export companies and financial institutions involved in international trade.
In addition, from now on, consulting and support services will be provided to export companies, aiming at their business development. In other words, the Company will operate as a one-stop shop for companies active in international markets. Our goal is to stand by the small and medium-sized exporter, by not only providing them with products they will come to know and seek, but also by training them in how they should operate regarding insurance of their export credit risks.
JOURNALIST: What is your response to the criticism expressed that it was not necessary to convert the Organization into a Limited Liability Company?
K. FRAGOGIANNIS: What the Limited Liability Company offers compared to the Legal Entity under Private Law is firstly that the body is subject to corporate governance rules. In other words, it operates strictly according to the rules of the private sector, without the restrictions that apply to public enterprises limiting the degrees of freedom and therefore adaptation to market requirements. Secondly, it becomes easier to adopt best practices of the European Union and thirdly, it is possible to set up subsidiaries both domestically and abroad. As a result, the entity acquires the necessary degree of flexibility.
In simple terms, by becoming a public limited company, the entity can adapt more quickly to the changes required by the global economy, harmonize with the operating framework of capital companies worldwide and more easily expand its product portfolio. At the same time, a full range of auditing the company and its activities is being established at four levels: a) at the level of management of the Limited Liability Company, both by the General Meeting of the Company and by the Board of Directors, b) by the Internal Service Audit being established, c) by certified auditors for the observance of all legal conditions and procedures and d) by the Bank of Greece.
JOURNALIST: What are the goals you have set regarding the operation of the new Export Credit Company and its expected results?
K. FRAGOGIANNIS: It is estimated that the new Hellenic Export Credit Company will have supported exports of 8.7 billion euros in total in the next five years. These exports are estimated to generate a product of € 21.6 billion and an added value to GDP of € 8.1 billion, considering the effects of the employment required to make these exports.
In conclusion, I would like to point out that the new Hellenic Export Credit Company – internationally called Export Credit Greece – is a modern and flexible Greek business support service which is client-oriented, if I may say so, designed and tailored to the needs of exporters. This is also confirmed by the universal support of the reform by the Greek business world and its institutional representatives.