OREANDA-NEWS. November 03, 2009. The Estonian parliament passed with 88 votes the government-initiated law on state export guarantees which makes it possible to give medium- and long-term export guarantees.

Under the law state export guarantees will be issued by a credit insurance company to be set up with the state's participation.

The changes arising from the newly-adopted law, increased equity of the future insurance company and creation of an additional reinsurance deposit allow the ceiling of export guarantees to be raised to three billion kroons (EUR 191.7 mln) from the present one billion kroons.

This broadens the opportunities for giving state export guarantees above all to extensive transactions and those with a long credit period.

The government too addressed the issue on Thursday, giving the minister of economy and communications powers to set up the credit insurance company AS Kredex Krediidikindlustus.

The minister, Juhan Parts, said the present situation requires intervention by the government. The market is not functioning and Estonian companies' export insurance is weak.

"To breathe new life into the Estonian economy it is imperative to increase export. A study has shown that the existing insurance market does not correspond to the needs of exporting companies and there exists demand for a new, state-backed insurance company," Parts said.