With Greece on the brink of default, an Israeli insurer said on Sunday that the Israeli government is not at risk, Globes reported.
“The Israeli government has no credit exposure to Greece, and is expected to suffer no direct damage following the halt in European Central Bank aid to Greek banks,” Israel Foreign Trade Risks Insurance Company (ASHRA) CEO Tzahi Malah said.
However, that doesn’t mean Israel will not feel any effects from the Greek crisis. As Malah warned, “Greece’s bankruptcy will have consequences for the global economy, and is liable to harm Israeli exports indirectly, while increasing the risk in global markets.”
“ASHRA has assigned Greece the highest credit risk rating — 7 — for several years. Following further worsening in the country, however, at this stage, we are calling Greece unrated, and recommending against insuring export deals to it until new information is obtained enabling us to raise its rating. If Greece defaults, ASHRA will continue supporting Israeli exports, and will also consider insuring credit risks in export deals with countries liable to be affected by the crisis in Greece, while taking the necessary precautionary steps,” Malah stated.
The insurer gave no assurance concerning private Israeli companies, however. Short-term deals — less than a year — could suffer exposure.
Greece is 28th among Israel’s trading partners, but that doesn’t mean nobody could get hurt. According to the Israel Export and International Cooperation Institute, the value of bilateral trade between Israel and Greece totaled $677 million in 2014, more than 50% up on the $455 million total in 2013. Bilateral trade totaled $257 million in January-June 2015, down 4%, compared with the corresponding period last year.