European Parliament meeting 311.
(photo credit: AP Photo/Christian Lutz)
Israeli exporters are starting to feel the pains of the debt crisis in Europe as
exports to Portugal, Ireland, Greece and Spain dropped an accumulated 17.3
percent in dollar terms in the third quarter of 2010 compared with the same
quarter last year, the Israel Export Institute reported Sunday.
sovereign debt crisis in Greece and Ireland is threatening to spread to Portugal
and Spain, Israeli exports of goods to these countries were hit hard in the
third quarter of this year,” Israel Export Institute director Avi Hefetz said.
“The decline in the figures was impacted by reductions in inventories as well as
cautionary measures taken in reaction to the debt crisis in Europe and the
heightened risk to sales in these markets.”
Exports of goods, not
including diamonds, to Portugal, Ireland, Greece and Spain totaled $299 million
in the third quarter, down 17.3% compared with $361m. in the third quarter last
year. During the reported period, the dollar weakened 10% against the euro,
which accelerated the decline in exports to these countries, while overall
exports increased 11%, the Israel Export Institute reported.
Greece dropped 49.8% to $33m. in the third quarter, down from $66m. in the same
quarter last year. Exports to Greece by the chemicals and petroleum-refining
sector plunged 63% to $12.3m.
Exports to Spain totaled $222m., down 8.9%
from $244m. in the third quarter last year. Exports of chemicals to Spain
declined 6% to $76m., while exports of machinery and equipment dropped 40% to
Exports of goods to Portugal fell 12% to $27m., down from $23.8m.
in the third quarter last year. Exports of rubber and plastics dropped 34% to
Exports to Ireland fell 19% to $19.8m., down from $24.4m. in the
third quarter last year. Exports to Ireland by the chemicals and
petroleumrefining sector dropped 48% to $3.6m. Exports of telecommunications
equipment declined 46% to $1.85m., while exports of rubber and plastics dropped
48% to $1.4m.
“The Irish crisis and subsequent bailout have returned
sovereign concerns to the forefront of investors’ minds,” Barclays Capital
economists Simon Samuels and Mike Harrison said in a report to investors
published over the weekend. “In our view, the renewed focus will now be on
Spain, where spring 2011 looks tricky. The challenges facing Spain remain
The question marks over asset quality will likely last far
“By contrast, we are far more sanguine on Italian prospects. The
absence of an asset bubble and limited wholesale funding reliance suggests the
banks pose little incremental risk to the Italian sovereign.”
Capital said any further problems for Spanish banks or the Spanish sovereign
would reverberate loudest in France and Germany.
“Should the tail risk of
a Spanish bailout materialize, it is likely that the [stronger] French and
German economies will bear the brunt of rescuing Spain, and by extension, the
euro zone,” the Barclays Capital report said.