credit granted by export firms, banks, or governments to foreign enterprises or states to enable those enterprises or states to purchase goods in the creditor nation. Under capitalism, export credits promote the export of goods and serve as a means of securing foreign markets and hence of maintaining or accelerating the rate of national economic development.

As a result of the international division of labor and the specialization of production, which have intensified under the influence of the scientific and technological revolution, exports have come to take up an increased share of the gross national product of capitalist countries. In 1975 this share was 21.3 percent in the Federal Republic of Germany, 20.3 percent in Italy, 19.4 percent in Great Britain, 17.6 percent in France, 11.4 percent in Japan, and 7.2 percent in the USA. The stimulation of export sales now plays a major role in the state-monopoly regulation of the economy; the amount of export credits and the terms under which they are granted have become a very important economic lever.

Export credits take two forms: supplier’s credits, or credits granted to the purchaser by the export firm, and purchaser’s credits (also called finance credits), or the credits granted by a credit institution in the exporting country to the foreign purchaser. Suppliers’ credits are generally issued for a short term; payment may be deferred for two to six months or, less often, for nine to 12 months. Such credits, granted at current money-market interest rates, are generally issued for the purchase of raw materials and consumer goods; they constitute the greater share of export credits. Purchaser’s credits, which are for the most part medium-term credits granted for a period of up to five years (in France, up to seven years) or long-term credits, are used to finance trade in machinery and equipment.

In sales involving short-term export credits, the state guarantees credits that turn transferable bills of exchange into the equivalent of gilt-edged securities, which are rediscounted by banks at a low rate (seeDISCOUNTING OF BILLS OF EXCHANGE). When granting medium- and long-term export credits, the state may participate in the issuing of credits necessary for a transaction or in the guaranteeing or insuring of credits; it may also, when granting such credits, bridge the gap between market interest rates and the lower rates charged for export credits.

In most countries, the state covers 90–100 percent of the political risk and 85–90 percent of the economic risk in a given transaction. The worsening currency crisis in France, the Federal Republic of Germany, and Japan between 1971 and 1976 prompted those countries to introduce state financing of currency risks. Since October 1976 the British government has covered the losses of exporters insured in the short-term money market. The state-regulated terms under which export credits are granted have touched off a “credit war” among the leading capitalist countries and have become an important factor in the competitiveness of national goods on the world market, of equal importance with such factors as price, delivery schedule, and product quality.

Export credits granted by socialist countries to other countries (especially developing countries) are designed to assist the latter in developing their national economies. Export credits are granted primarily to the state sector and do not entail any political conditions.