The United States Congress has approved a temporary nine-month extension to the US Export-Import Bank’s operating authority.
The export credit agency’s current charter was due to expire at the end of September but will now run until 30 June…
The United States Congress has approved a temporary nine-month extension to the US Export-Import Bank’s operating authority.
The export credit agency’s current charter was due to expire at the end of September but will now run until 30 June 2015.
The measure was part of the wider continuing appropriations resolution that provides FY2015 appropriations to federal agencies at the current annual rate until 11 December 2014. It also included additional funding to respond to the outbreak of the Ebola virus in Africa, as well as an amendment authorising the DoD to train and equip appropriately vetted elements of the Syrian opposition.
The bill was passed 319-108 in the House of Representatives and 78-22 in the Senate.
There had been a last minute motion by House Democrats to extend Ex-Im Bank’s authorisation by seven years to 30 September 2021, but this was rejected 199 – 228.
Following the vote, aerospace giant Boeing, the largest beneficiary of Ex-Im Bank support, issued the following statement: “Congress has left thousands of small, medium and large US exporters and their workers in limbo until the middle of next year and this will likely negatively impact US sales to foreign customers. We will continue to press Congress for a multi-year reauthorisation of Ex-Im.”
Boeing group received around US$8.3bn in financial assistance from the export credit agency in FY2013.
Commenting on the temporary extension, Ex-Im Bank chairman and president Fred Hochberg said: “I look forward to working with Congress on the passage of a long-term reauthorisation of the Export-Import Bank in order to bring certainty to the hundreds of thousands of Americans whose jobs depend on a level playing field for US goods and services.
“Businesses don’t pursue overseas sales, invest in their operations, or hire new employees on a month-to-month basis. Similarly, quality American goods shouldn’t lose out to aggressive foreign competitors because of the Export-Import Bank’s still-uncertain future. Overwhelmingly bipartisan majorities in Congress have extended our charter 16 times, and I’m confident that together we can again find a long-term solution.”
Telesat chief rails against ECA assistance
The president and chief executive officer of Canadian satellite operator Telesat, Dan Goldberg, has claimed that export credit agencies should not be serving the satellite sector as they wholly distort the market.
Speaking at the World Satellite Business Week in Paris, Goldberg argued: “I’d like to make a point about government financing, such as Ex-Im and Coface. I regard this as complete market distortion and believe that the capital markets are very sophisticated, they understand this sector, they understand the technology, they understand the market. There is no reason why we need governments, particularly governments in a constrained fiscal environment in Western Europe and the United States, underwriting satellite expansion programmes that the private market won’t fund. It doesn’t make any sense.
“I don’t think that the tax payers have been very well served by a lot of these investments. Right now, the US Congress is debating whether to renew the charter of the Ex-Im Bank and while I won’t weigh in on that, I will say that I don’t think it is a net positive at all for the satellite services industry.”
When the point was put to Goldberg that many of today’s large commercial satellite operators have received substantial government support in the past, he replied: “It is a fair point but the market has evolved dramatically since that time. The capital markets are open and operating efficiently in this area. There is no reason for it any more.
“If some governments have felt left out of the space age and want to do it, I can sort of get my head around that, I don’t love it but I can understand it. But there is no reason on earth that governments in Western Europe or the US should be subsidising these activities. It just doesn’t make sense.”
