The state will establish a company to support export of enterprises

On Jan.9, the Minister of Economic Affairs and Communications, Juhan Parts sent the draft for the State Export Guarantee Act for interministerial approval, pursuant to which a state company dealing with credit insurance for state export guarantee for enterprises will be established.

Pursuant to the draft, the state will establish a company, where KredEx will obtain a holding and will provide a service on the basis of a management agreement. The establishment of the company enables to provide entrepreneurs more mid- and long-term export guarantees than ever, their necessity became evident from an analysis carried out within the co-operation between KredEx and Ministry of Economic Affairs and Communications. Furthermore, in connection with global economy issues, the interest in short-term export guarantees has strongly grown. So far, too small capital volume of the KredEx Export Guarantee Target Fund and rigid equity capital requirements in providing guarantees have hindered the grant of export guarantees which does not meet the requirements of the established market. Currently the volume of the KredEx Export Guarantee Target Fund is 100 million EEK, enabling to issue the guarantees for a maximum of 800 million EEK. However, the potential demand-based guarantee volume with the annual issuing possibility is over 1 billion EEK. Proceeding from the analysis, the state would receive notable potential benefit from mid- and long-term export guarantees – each export of 100 million EEK, established by virtue of the guarantee scheme, will create over 20 million added value directly EEK. According to prognoses, annual volumes of guaranteed export could reach EEK 1.1—1.5 billion. Hence, the direct added value to be obtained from the guarantee scheme would be approx. 1 billion EEK in total (within 2009-2013).

The company to be established will have a separate management board and supervisory board. According to the plan, the equity capital of the company will consist of 200 million EEK budgetary investment, 100 million EEK will come from the KredEx holding, and 200 million EEK as supplementary loss reserve from the funds of EU Regional Development Fund. Direct state holding in the company will be 66.5% and the holding of the KredEx Foundation will be 33.5%. Financial data of the company will be consolidated or entered in the KredEx report in the form of equity method.

On April 28, 2008, the Cabinet of Ministers assigned the task of the Minister of Economics and Communications to develop the proposals for the amendment of State Export Guarantee Act.

The Draft and explanatory memorandum can be accessed via e-law at


The 1990’s financial crises in Nordic countries

The Bank of Estonia has a report on its website about the financial crises.  Here’s a quote from the start.  Click the link below to see more.

The current financial turmoil has now lasted well over a year. In the postwar period, the current crisis is the 19th in advanced economies and the first one in the 21st century. In a recent paper Carmen Reinhard and Kenneth Rogoff ( 2008 ) divide the 18 crises before the current US subprime crisis into “Big Five” and smaller crises. The Big Five include the crises in Norway, Finland and Sweden that occurred mostly in early 1990’s. The Norwegian crisis started already in late 1980’s but continued into 1990’s.


Nearly all major banks in the Nordic countries got into difficulties and made huge losses, with average loss provisions (expressed as percentage of lending) in the period 1982-93 ranging from 2.1 (in Denmark) to 1.5 percent (in Finland and Norway) of bank lending. In the sub-period 1990-93 loss provisions were 2.9 percent for Denmark, 3.4 percent for Finland, 2.7 percent for Norway, and 4.8 percent in Sweden.1 All of the Nordic countries had to provide public support to their banking systems. In Denmark this support was small whereas in Norway, Sweden and Finland public support was quite significant with increasing importance in the indicated order of countries. The financial crises in Finland, Norway and Sweden became systemic, whereas Denmark avoided a systemic crisis. Thus, the report will not cover the Danish case in any detail.

Read more here