xml version="1.0" encoding="UTF-8"?


C\_2019401EN.01000301.xml


| | | | |
| --- | --- | --- | --- |
| 27.11.2019 | EN | Official Journal of the European Union | C 401/3 |

---

COMMUNICATION FROM THE COMMISSION

amending the Annex to the Communication from the Commission to the Member States on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to short-term export-credit insurance

(2019/C 401/03)

I.   Introduction

| | | |
| --- | --- | --- |
| | (1) | The Communication from the Commission to the Member States on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to short-term export-credit insurance [(1)](#ntr1-C_2019401EN.01000301-E0001) (‘the Communication’) stipulates in point 13 that State insurers [(2)](#ntr2-C_2019401EN.01000301-E0002) cannot provide short-term export-credit insurance for marketable risks. Marketable risks are defined in point 9 as commercial and political risks with a maximum risk period of less than two years on public and non-public buyers in the countries listed in the Annex to that Communication. |

| | | |
| --- | --- | --- |
| | (2) | Because of the lack of private credit insurance or reinsurance capacity to cover exports to Greece, the Commission amended the Communication by temporarily removing Greece from the list of marketable risk countries in 2013 [(3)](#ntr3-C_2019401EN.01000301-E0003). This modification has been prolonged several times since [(4)](#ntr4-C_2019401EN.01000301-E0004). The last prolongation is due to expire on 31 December 2019. Consequently, as of 1 January 2020, Greece would be considered as a marketable risk country. |

| | | |
| --- | --- | --- |
| | (3) | In accordance with point 36 of the Communication, the Commission started to review the private credit insurance and reinsurance capacity to cover exports to Greece several months before the expiry of the last modification to determine whether the current market conditions justify Greece to be again on the list of marketable risk countries as of 1 January 2020, or whether the market capacity is still insufficient to cover all economically justifiable risks, so that a prolongation of the exemption from the list of marketable risk countries is needed. |

II.   Assessment

| | | |
| --- | --- | --- |
| | (4) | By virtue of section 5.2 of the Communication, the Commission’s assessment is based on the criteria laid down in point 33: private credit insurance capacity, sovereign rating and corporate sector performance (in particular insolvencies). |

| | | |
| --- | --- | --- |
| | (5) | When determining whether the lack of sufficient private capacity to cover all economically justifiable risks justifies the prolongation of the temporary exemption of Greece from the list of marketable risk countries, the Commission consulted and sought information from Member States, private credit insurers and other interested parties. On 23 September 2019, the Commission published an information request on the availability of short-term export-credit insurance for exports to Greece [(5)](#ntr5-C_2019401EN.01000301-E0005). The deadline for replies was 18 October 2019. The Commission received 22 replies from Member States and no replies from other interested parties. |

| | | |
| --- | --- | --- |
| | (6) | The information submitted to the Commission in the context of the public information request did not substantiate that there would be contraction of private credit insurance capacity for exports to Greece. State insurers registered a decrease in the number of credit insurance policies for exports to Greece, which suggests that there is sufficient availability of private insurance. Among the Member States other than Greece, only five explicitly asked for a prolongation of the current exclusion of Greece from the list of marketable risk countries, while three others indicated that Greece should be included back into the list of marketable risk countries. The other 13 replies did not take a firm position on this matter. Most notably, Greece itself expressed the strong wish to be reinserted in the list of marketable risk countries, given that the Greek economy has lately been on a path of steady growth. |

| | | |
| --- | --- | --- |
| | (7) | According to the most recent macroeconomic indicators, Greece is experiencing an economic recovery which is expected to continue in the near future. After almost a decade of contraction and stagnation, the economy started growing again in 2017, with real GDP growth estimated at 1,8 % for 2019 and with labour market conditions continuing to improve. Growth continued in the first half of 2019, while the specific composition of Greek exports has cushioned the economy from the deteriorating situation in its export markets. The ongoing recovery is also mirrored by positive developments in the labour market where unemployment rates continued to decline, reaching 16,7 % in August 2019. These are forecast to decrease further over the next years according to the 2019 Autumn Economic Forecast of the European Commission [(6)](#ntr6-C_2019401EN.01000301-E0006). |

| | | |
| --- | --- | --- |
| | (8) | Regarding public finances, government bond yields have dropped significantly, with 10-year yields declining from around 3,4 % in May to 1,5 % in September 2019, amid a decline in both risk-free rates and country spreads — signalling diminished risk attached to the investment in Greek government bonds. |

| | | |
| --- | --- | --- |
| | (9) | The situation regarding Greek sovereign ratings has improved substantially since the crisis and the outlook is considered stable or positive by the rating agencies. Nevertheless, Greek sovereign bonds are still rated below investment grade. There have been no negative developments regarding credit ratings of the sovereign sector in Greece in the past 6 months. Ratings are generally expected to improve further as economic growth continues. |

| | | |
| --- | --- | --- |
| | (10) | The corporate sector performance has not deteriorated in the past 6 months. The share of non-performing business loans (‘business NPLs’) has been declining since 2017 but remains high at 42,6 % in Q2 2019 due to the high starting level and the general loan contraction. The total amount of business NPLs is decreasing faster (-16 % in Q2 2019 compared to same quarter of previous year) and is expected to decrease further due to the NPL securitisation scheme ‘Hercules’ that was approved by the Commission in October 2019. Credit standards for the corporate sector remained unchanged in the first quarter of 2019 and are expected to remain unchanged in Q2 according to the bank lending survey. |

| | | |
| --- | --- | --- |
| | (11) | Against this background, taking into account the outcome of the public consultation and, in particular, the contribution of Greece, as well as overall signs of improvement in the Greek economy and positive forecasts, the Commission decides to include Greece back into the list of marketable risk countries as of 1 January 2020. |

AMENDMENT TO THE COMMUNICATION

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | (12) | The following amendment to the Communication from the Commission to the Member States on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to short-term export-credit insurance will apply from 1 January 2020: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | — | the Annex is replaced by the following: ‘List of marketable risk countries: | | | | | --- | --- | --- | | Belgium | Cyprus | Slovakia | | Bulgaria | Latvia | Finland | | Czechia | Lithuania | Sweden | | Denmark | Luxembourg | United Kingdom | | Germany | Hungary | Australia | | Estonia | Malta | Canada | | Ireland | Netherlands | Iceland | | Greece | Austria | Japan | | Spain | Poland | New Zealand | | France | Portugal | Norway | | Croatia | Romania | Switzerland | | Italy | Slovenia | United States of America’. | | |

---

[(1)](#ntc1-C_2019401EN.01000301-E0001)  [OJ C 392, 19.12.2012, p. 1](http://publications.europa.eu/resource/oj/JOC_2012_392_R_TOC).

[(2)](#ntc2-C_2019401EN.01000301-E0002)  A State insurer is defined by the Communication as a company or other organisation that provides export-credit insurance with the support of, or on behalf of, a Member State, or a Member State that provides export-credit insurance.

[(3)](#ntc3-C_2019401EN.01000301-E0003)  [OJ C 398, 22.12.2012, p. 6](http://publications.europa.eu/resource/oj/JOC_2012_398_R_TOC).

[(4)](#ntc4-C_2019401EN.01000301-E0004)  In 2013, [OJ C 372, 19.12.2013, p. 1](http://publications.europa.eu/resource/oj/JOC_2013_372_R_TOC), in the beginning of 2015, [OJ C 28, 28.1.2015, p. 1](http://publications.europa.eu/resource/oj/JOC_2015_028_R_TOC), in June 2015, [OJ C 215, 1.7.2015, p. 1](http://publications.europa.eu/resource/oj/JOC_2015_215_R_TOC), in June 2016, [OJ C 244, 5.7.2016, p. 1](http://publications.europa.eu/resource/oj/JOC_2016_244_R_TOC), in June 2017, [OJ C 206, 30.6.2017, p. 1](http://publications.europa.eu/resource/oj/JOC_2017_206_R_TOC), in June 2018, [OJ C 225, 28.6.2018, p. 1](http://publications.europa.eu/resource/oj/JOC_2018_225_R_TOC) and most recently in December 2018, [OJ C 457, 19.12.2018, p. 9](http://publications.europa.eu/resource/oj/JOC_2018_457_R_TOC).

[(5)](#ntc5-C_2019401EN.01000301-E0005)  https://ec.europa.eu/competition/consultations/2019\_export\_greece/index\_en.html

[(6)](#ntc6-C_2019401EN.01000301-E0006)  https://ec.europa.eu/info/sites/info/files/economy-finance/ip115\_en\_0.pdf

---