Growing Internationalisation Creates New Challenges for State Export Guarantees

Trade credit is a regular feature in international trade. Due to longer distances and delivery times trade credit is used in about 80 percent of business transactions. Austria supports domestic exporters by providing public export credit guarantees. In the long run, the export guarantee system is balanced in its operational result. If no new export credit guarantees were granted any more, exports of goods and services would, in the long term, be reduced by 2 percent compared to reference figures; gross domestic output would be down by 0.6 percent, and about 30,000 jobs could be expected to be lost. Underwriting of export credit guarantees is subject to a minimum local content rule. This minimum level is increasingly difficult to observe because Austrian businesses become ever more integrated in international value added chains.