Germany lifts restriction on export guarantees for Turkey

DAILY SABAH
ISTANBUL
Published 22.07.2018 20:36
Updated 22.07.2018 20:38

Germany has lifted the restriction on export and investment guarantees for German companies doing business with Turkey, while the country has also softened its travel warning to the country. In September last year, the German government capped the amount of the Hermes export guarantees it provides for trade with Turkey at 1.5 billion euros. According to a report in German newspapers Frankfurter Allgemeine Zeitung (FAZ), the German government has decided not to renew its limit on export guarantees to Turkey. The same information was later confirmed to AFP by Germany's economy ministry.

The Hermes guarantees provide the German government protection for German companies when foreign debtors fail to pay. Despite a crisis in German-Turkish relations last year and several threats to cut government-provided export credits, Germany has financially secured significantly more exports to Turkey. The scope of the Hermes guarantees grew by almost one-third to around 1.46 billion euros, a report by German news agency dpa said in February. Approximately 6,900 German companies operate in Turkey, while bilateral trade volume hovers at around 37 billion euros.

According to the German Economy Ministry, the foreign direct investment (FDI) from Germany to Turkey between 2002 and May 2017 exceeded $9 billion, placing it sixth among the top 20 countries investing in Turkey. The FDI from Germany, which generally invests in energy, insurance and manufacturing sectors, composes at least 6.3 percent of the total FDI in Turkey. In late June last year, German Foreign Minister Sigmar Gabriel said the federal government would review its export guarantees to Turkey following allegations that the Turkish government launched an investigation into German firms operating in Turkey on the grounds of aiding and abetting terrorism. The accusations were rebuffed by Turkish authorities, who ensured the safety and security of the operations of German companies on several occasions.

Germany had issued a warning to its citizens visiting Turkey last July, telling them to take "heightened caution."

In a reciprocal move in September last year, the Foreign Ministry warned Turkish citizens living in or traveling Germany to be cautious. The ministry said Turkish citizens should act responsibly in cases of xenophobia, incidents of racism and verbal attacks. Despite the tightened travel instructions of the German Foreign Affairs Ministry, Turkey has remained a popular holiday destination for German citizens.

Moreover, Norbert Fiebig, the chairman of the German Travel Association (DRV), said the number of German tourists going on holiday to Turkey started approaching the record figures of 2015, when around 5.6 million Germans visited the country. In his statement to the Frankfurter Allgemeine, Fiebig said this year's commercial situation of the German travel agencies seemed good, pointing to an increase in reservations, especially for Turkey, the Greek islands, Bulgaria and Egypt.

He also said German tourists could not find anywhere else in the world the quality service and other financial opportunities that Turkey offers and that those factors play important roles in their decisions to choose Turkey.

Fiebig also noted the stability in Turkey as another reason why German tourists choose the country as their holiday spot.

Moreover, it was previously reported that 2018 will see around a 15 to 20 percent increase in the number of German tourists visiting Turkey according to early bookings.

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