EU – Baltic States, Financial Services, Insurance, Latvia

Euler Hermes explained that its actions were due to the economic problems in Latvia and the risk of a devaluation of the lat, informs LETA.

The majority of traders operate with delayed payments for goods; that is, goods are received, but payment is made 30-60 days after delivery. This allows part of the goods to be sold, helping to balance the payment to the supplier. However, this system requires a credit insurer to provide security to the supplier who receives the delayed payment.

The lack of such an insurer means that payment must be made in advance, which has made life difficult for many Latvian companies since the country's credit ratings were lowered.

According to the "Telegraf", Euler Hermes could re-assess Latvia's rating in the near future, meaning that credit insurance could be made available again to many companies, removing the obligation of making payments for goods in advance.

Until now, Latvia has been rated at level D. Euler Hermes will re-evaluate the rating at the end of 2010 or the beginning of 2011, when a new government has been formed in Latvia, the newspaper was told by Euler Hermes representative Raphaele Hamel.

However, according to the "Telegraf", it remains to be seen whether Latvian companies will wish to return to cooperation with Euler Hermes, which caused many problems when it ceased its operations here.