FRANKFURT Aug 28 The Ukraine crisis and its
impact on relations between Russia and the West is crimping
German growth and could lead to a rise in manufacturing sector
insolvencies in the second half of this year, credit insurer
Euler Hermes said on Thursday.
Euler Hermes, part of German insurer Allianz, has
trimmed its GDP growth forecast for Germany this year to 1.5
percent from 1.9 percent, with about half of the revision due to
the effect of sanctions imposed by the West and Russia on
one-another, as well as corporate uncertainty over the standoff.
"For Germany in general, the current situation is not
threatening," said Ralf Meurer, chief executive of Euler Hermes'
"However, there are individual companies facing a very
dramatic situation," he said, pointing out that some firms'
strategies were extremely focused on the Russian market.
Meurer declined to give a specific forecast for insolvencies
but said they appeared set to rise in the second half, following
a decline of about 20 percent in January to May period.
German exports to Russia are expected to fall by about one
fifth, with sectors such as machine tools, automotive and
foodstuffs particularly hard hit, he said.
"We are talking weekly with these companies," Meurer said,
with the credit insurer giving and receiving the latest
information on the ground.
Separately, only one in six of the small- or medium-sized
firms that make up the backbone of Germany's economy said the
standoff between Russia and the West over Ukraine was hurting
their business, a survey by consultants EY showed earlier this
"We are still offering cover on Russia, as before," Meurer
told the Frankfurt business journalists club ICFW late on
Wednesday, in remarks released on Thursday.
The price range for credit insurance in general is
"immense," varying from a fraction of a percent to up to 5
percent of the insured value, depending on the type of goods,
industry and risk ratings of the buyer and the countries
involved, Meurer said.
Meurer also welcomed the flotation of French credit insurer
Coface two months ago, saying the listing would make
it easier to compare the two companies' operations.
French bank Natixis sold a 51 percent stake in
Coface as part of a plan to gradually dispose of the credit
insurer to focus on wholesale banking, asset management and
specialised financial services.
(Reporting by Jonathan Gould; Editing by Mark Potter)