We are now just a few days away from the States General for exports, and it seems that the proposals of the various working tables for the relaunch of exports and the internationalization of our companies are ready and only to be defined in the final details. At least that's what the new Deputy Minister Catia Polidori says in one of her press releases.
Waiting to see if the Roman event of 28 and 29 October will produce good results or if it will be just a useless parade of good intentions, let's take stock of the situation from our observatory.
First of all, before reaching the legislative and technical instruments, it is good to ask ourselves what are the basic objectives of an internationalization support system and how they should be pursued in a country, and in a historical moment in which, as we all know available funds are necessarily scarce.
It is easy to define the basic objectives, because, at least these, have not changed for years, namely:
1. Have an efficient and coordinated structure for the promotion of the Italian system abroad;
2. Support exports with a series of interventions at least in line with those in force in other industrially advanced countries;
3. Support the FDI (foreign direct investment) of our companies, now indispensable for their permanence in international markets.
As regards the first point, there is no need to add a word more than what was published today on our pages by Ugo Calzoni on the (supposed) reform of the former Ice, in his provocative but excellent article "Ice looks like a phoenix: 10 points to really move on and create an export agency”. It must also be said that a large part of foreign promotion would in theory be entrusted to the Regions since 1997, but in reality the regional agencies have so far produced very little results, or even have not yet been born.
For the other two points, however, we must start from a premise: the structure of the Ossola Law, which has still governed the regulatory framework for exports since 1977, and of Law 100 of 1990 (which established Simest) which instead coordinates support for The idea of our companies (summarized in legislative decree 143/98), is largely overcome by the Copernican revolution that took place in international markets. It has changed not because of the basic objectives, but because of its conception: today it is no longer a matter of financially supporting, with contributions and subsidized loans, companies that export or invest abroad. How many contributions and funding would be needed to support all the internationalization processes of our companies? Who would give us the necessary money?
The part to be saved is the support for export credits with extensions of two years or more, which remains valid, so much so that many companies still use it, through its three typical forms (buyer's credit, forfaiting, non-recourse discount with transfer of Sace policy): why should it be saved? Because they are operations that manage to combine the elimination of the credit risk on the foreign debtor with easier access to credit. This is precisely the problem of the other operations: companies that export with short-term settlement (90% of exporters apply the normal commercial extensions, from 90 to 180 days, depending on the goods) and companies that invest abroad have need not of contributions, but of credit, of financing for investments in fixed and working capital, which in recent years have come with a dropper from a banking system in difficulty.
This revolution in the nature of support for companies operating abroad has so far been accomplished only by Sace, whose interventions are in fact essentially aimed at "facilitating access to credit", as it defined it in its interview with FIRST online its CEO Alessandro Castellano. As demonstrated by the fact that the country to which Sace is most exposed is Italy: a good 8,3 billion euros out of a total of 34,8 billion in insurance commitments in mid-2011 (almost 24%). For the rest, everything is at a standstill.
And Simest? Let's say that it does what it can, divided between an investment support activity still stuck to the tools of 20 years ago (another world) and an agency activity for the disbursement of contributions for internationalization (increasingly scarce) , moreover with very little share capital and equity that does not reach 400 million euros. Simest's problem, in supporting the FDI of our companies, is that it fails to be the point of reference for a flywheel of credit flows for the substantial financing that our companies need when they invest abroad.
Starting from these premises, I believe that the beginning of a process of re-founding the internationalization support system must start from some fundamental points:
1. Having a single regulation, a Consolidated Text that we have been waiting since 2003 at least, which brings together all the laws and regulations on export and internationalization. The new TU should obviously contain all the new provisions which must stimulate the growth of the presence of our companies on foreign markets.
2. Reorder entities which govern these matters:
· suppress the now useless entities, such as Buonitalia (promotion of Italian food abroad), Invitalia (promotion of foreign investments in Italy) and Enit (promotion of foreign tourism in Italy). The case of the latter institution is emblblood: according to the words of the time Vice Minister Urso, "Enit's responsibilities have been transferred to the regions, but it maintains 24 branches abroad, 200 employees and as many as 19 executives. He no longer spends a single euro on promotion, it only serves to keep himself alive”. Their residual activities can be transferred to the regions or to the new Export Agency, while the foreign network can be dismantled and transferred to the Embassies. The premises can be sold or put to use, and these funds can be used for the purposes I will discuss below;
· permanently transfer Finest and Informest to the Triveneto regions;
· recapitalize Simest and increase the types of intervention.
In this way, only the three bodies that deal with the three pillars of support would remain: the Export Agency (promotion), Sace (insurance aspect), Simest (financial aspect).
3. Expand support interventions of investments, which for now are - dramatically - stuck to those of law 100, which is from 1990, through:
· the use of part of the funds deriving from the Simest capital increase (in the order of € 300 million) to promote the establishment of a real venture capital fund, on the model of the one being organized for investments in Mediterranean countries (see the article “The Mediterranean SME Fund is the right way forward” of 22.9 on FIRST online). The major Italian banks should participate in the Fund, to reach a minimum initial amount of 1 billion. The assets of the Fund should be diversified: venture capital (ie entry into the capital of young high-tech companies in foreign countries to accompany their growth); guarantees to facilitate access to bank credit for foreign investee companies; funding aimed at SMEs in the countries where the investment is made; assistance and advice. The Fund (which should start within no more than 6 months) would operate at market levels, without incentives, but it would be a new and much more agile intervention than the traditional participation envisaged by law 100/90;
· verification of the possibility of extending the interest contribution provided for by art. 4 of law 100/90, in addition to the loans that the Italian company receives from the banking system to carry out the capital injection in the foreign subsidiary, also the medium-term loans necessary to make the investment.
4. As for the exportsmust be divided between:
· exports with medium-term settlement (from 2 years upwards): as mentioned above, the current instruments are sufficient. However, Simest must update the matrix of appropriate rates (i.e. of the reference rates, country by country, on which the interest rate envisaged for export credits in forfaiting transactions is based), stuck in February 2008, i.e. before the crisis, when country risks were much less onerous and non-recourse discounts less expensive;
· exports with short-term settlement (up to 2 years): it is necessary to find new instruments which allow companies to improve the approach to short-term credit, and which better link insurance policies to bank advances on export credits. ABI and the main credit risk insurance companies (Euler Hermes Siac, Coface Viscontea, Atradius Sic, Sace BT) need to agree on a framework contract which sets out the terms of reference for financing operations or discounts without recourse connected to the transfer of the policies to cover short-term credit risks (as was done years ago with Sace for similar medium-term transactions). This would bring two advantages: it would push companies to cover the credit risk, with all the associated benefits; it would relieve companies of short-term financing lines, useful for other purposes.
How much would these measures cost? Very little, considering that there would be some cost savings, thanks to the suppression of some institutions. Probably no more than 250 million. But the return, in terms of increased exports, higher turnover of our companies, higher employment and, ultimately, higher tax revenues would by far repay the cost of the reform.
