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German industry and banking groups called on the government on Thursday to extend the scope of state export guarantees, known as Hermes guarantees, to reflect the increasingly international make-up of products shipped from Germany. Germany supports exports - a key driver of growth, accounting for about 40 percent of the economy - by offering guarantees for non-payment. Companies are eligible to receive a Hermes guarantee if more than half of a product's components are made locally.
But exporters say they are increasingly having to use parts from abroad to remain competitive and want guarantees to be available for products that include up to 75 percent foreign parts.
"For German industry to remain competitive ... the criteria for Hermes cover must be adapted to better suit the changed international conditions for the export industry and to take account of financial market regulations," said the four groups in a statement.
The four are the BDI industry association, the banking association, the BGA export group and the VDMA engineering association.
Economy Minister Sigmar Gabriel has said the government would look at whether changes can be made in the medium term.
The system was originally introduced in 1949 for cases where firms could find no private insurance and has become a pillar of Germany's export industry. Last year alone some 24.8 billion euros ($27.67 billion) worth of exports were backed by the guarantees.

Copyright Reuters, 2015

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