Finance Minister Dr. Yuval Steinitz has contacted the Knesset Finance Committee for approval on the framework of guarantees for Israeli exporters.
Steinitz's program is intended to expand Israeli export activities, which he regards as an important engine of growth for Israel's economy. Totaling approximately 2.75 billion, the program will expand financing solutions for exporters and increase the basket of services offered by the governmental insurance company.
The program has two phases, which will to expand the availability of medium-and long-term credit for Israeli exporters:
Phase 1: "Top Up 2"
Previously, under the "Top Up" plan, Israel's government dealt with the global banking crisis by guaranteeing short-term export transactions totaling about NIS 1.8 billion. Under the Ministry of Finance's new "Top Up 2" plan, Israel's government will guarantee medium and long term export transactions (over one year to five years), through the government's cooperation with export credit insurance companies. The program hopes to foster competition, improve the profits made by Israeli exporters, and leverage state funds to grow the economy and Israel's international market share.
Top Up 2 will alter the distribution of risk between the private sector and the state, allowing the private sector to more thoroughly integrate itself in the export field. The program will be offered a volume of NIS 1 billion to institutionalize the private sector's activities in the field.
Phase 2: Expanding "Ashrai"
"Ashrai" (Credit) is a government corporation engaged in credit insurance for exporters in countries where there is market failure, or for long-term credit transactions. Due to increased competition in global trade and demand for long credit terms for major financial transactions, the Finance Ministry will work to improve Israeli competitiveness by expanding the basket that provides services to exporters. To meet demand from exporters, as well as the planned expansion of services, the quota of guarantees granted exporters will be increased from $ 1.25 billion to 1.75 billion.
"We continue to support exporters," Steinitz said. "We did so at the height of the crisis and now we're developing new and creative programs. The government's first entry into the medium-term insurance market is designed to strengthen exporters who face complex and global market pressures. The Ministry of Finance will continue to review and promote export industry assistance programs. "
Accountant General Shuki Oren said, "One of the factors critical to the success of new export markets in particular is readily available financing. Promotion of export transactions and insurance is real leverage for Israeli industry's penetration of new markets. Uncertainty in large parts of the world increases the credit risk for purchasers and we see the government's role as reducing this risk to increase exports. "