The Irish Exporters Association (IEA) today 23^rd November announced their dismay at the decision communicated to them by the Tanaiste Mary Coughlan, Minister for Enterprise Trade and Employment not to support the indigenous export sector with the much needed State intervention into the Export Credit insurance market.

John Whelan, CEO of the Irish Exporters Association stated:

"Effectively the Tanaiste has decided that it is not worth improving the Export Credit insurance options for Irish exporters on the basis that it covers only a small level of exports and is primarily one sector, the agri–food sector, and in one market, the UK.

This shows a total lack of understanding of the export sector by the Tanaiste, when she chooses to ignore the fact that it is the indigenous sector who primarily use Export Credit insurance.  This sector, though only accounting for €14.3 billion of exports (less than 10% of total exports) employs half of all workers in the export sector.  The fact remains that 43% of all indigenous exports go to the UK, and that two thirds of this is the agri-foods exports, hence the need for credit insurance into this market."

The IEA warned that many indigenous businesses will lose more exports and more jobs, as a result of this lack of vision by the Tanaiste .

The IEA Chief Executive went on to say:

"This decision by the Tanaiste and her officials, which has taken all of twelve months to arrive at, effectively has put the €6 billion worth of indigenous exports to the UK at high risk."

Exporters, particularly in the food and drink sector are facing a real struggle to retain their UK sales as the watch profit margin erosion because of the Sterling depreciation, and increasing cash flow requirements because of withdrawal of credit insurance.  In the third quarter alone, July to September, food exports to the UK are estimated by the industry to be down by 20% on the prior year."

John Whelan concluded by saying:

"The decision also puts Irish exporters out on their own in Europe without a State backed credit insurance scheme.  Most other EU member states have supported their exporters’ retention of sales with credit insurance backing.

This decision, will without a doubt, put Irish exporters at a competitive dis-advantage as they try to increase sales in various other markets internationally where the transition from recession to recovery has commenced.  At this point those who can get export credit insurance will steal the march on those who don't. The demand for credit insurance, and secure cash flow, will increase as exporters try to expand to meet new sales opportunities. Employment subsidies are irrelevant if cannot secure sales.

The negative decision on export credit insurance put’s into question the Government’s understanding of what it will take to ensure an export led recovery."

END

For further information:

Contact: John Whelan

CEO IRISH EXPORTERS ASSOCIATION

MOB 087 9271243

LAND LINE: 01 6612182

E-MAIL: JFWHELAN@IRISHEXPORTERS.IE