Finland’s export credit agency (ECA), Finnvera, has been granted permission to insure short-term exports to EU countries to fill a private sector market gap.

Until December 31, 2015, the ECA will be able to guarantee export transactions with a credit period of under two years for all EU member states except Greece, as well as Australia, Canada, Iceland, Japan, New Zealand Norway, Switzerland and the US.

However, the transactions have to meet certain requirements: The applicant must be SME with a total annual export turnover of at most €2mn, and the single export transaction must have a risk period of between 181 days and two years.

Eeva-Maija Pietikäinen, head of trade finance at Finnvera, tells GTR: “In the area where Finland received the permission from the [European] commission to cover marketable risks, it has been demonstrated that there is a market gap here in Finland. The commission can grant such permission only in case a market gap exists.”

Finnvera adds that it can only insure transactions in cases where a private insurer has denied cover.

The permission does not apply to Greece, where due to general market failure Finnvera can insure exports even when the conditions of the temporary permission are not fulfilled. The ECA does not know whether conditions will be changed for Cyprus as well on the back of the recent bailout.

According to Pietikäinen, other EU countries could potentially come up with similar initiatives in the near future.