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It's a loan provided by State banks, at commercial conditions - or more precisely at conditions that have been agreed at OECD level in order not to generate a race-to-the-bottom.

In other words, COFACE is obliged to lend at the exact same conditions to Airbus as USEXIM can lend to Boeing for export of planes to a given country.

Also, export credit is only authorised for exports to non-OECD markets (offshore wind is the one exception, as far as I know: my first offshore deal was with the Danish ECA for export to the Netherlands...).

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sat Jan 17th, 2009 at 05:05:11 AM EST
is that if the buyer defaults, in particular for political reasons (government decision) then it becomes a diplomaric issue: so you don't just piss off the seller, but also its home country.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sat Jan 17th, 2009 at 05:06:15 AM EST
[ Parent ]
Thanks for the explanation. Although this is indeed no subsidy, it does show the close interrelation between the state and the market and the degree of reliance of Airbus on the instruments of the state.

I'd think that the increase is caused by Airbus having made many sales outside of the OECD (Middle East, China, India, Singapore), then, and the airlines there no longer being able to finance these as easily.

by nanne (zwaerdenmaecker@gmail.com) on Sat Jan 17th, 2009 at 05:25:38 AM EST
[ Parent ]
Areva and Siemens get Coface support for the EPR in Finland.

Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine
by UnEstranAvecVueSurMer (holopherne ahem gmail) on Wed Jan 21st, 2009 at 09:56:28 PM EST
[ Parent ]

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