Latvian Parliament Approves State Aid for AirBaltic Stabilization

Latvia's parliament has approved a law enabling state intervention to stabilize the national airline, airBaltic. The legislation, passed as urgent, allows the government to participate in the airline's financial recovery by potentially purchasing new bonds worth up to 30 million euros and capitalizing existing bonds amounting to 50 million euros.

The bill faced some opposition, with the Union of Greens and Farmers (ZZS) proposing to remove the financial stabilization clause. However, a ZZS-backed amendment designated the Prime Minister as responsible for coordinating these measures within the cabinet, ensuring inter-ministerial cooperation.

The law aims to empower the state, as airBaltic's shareholder, creditor, and bondholder, to act swiftly and protect its financial interests. It provides the possibility to extend loan repayment terms, capitalize claims from state loans and bonds, and participate in bridging finance if necessary. Specific financial stabilization decisions will be made by the Cabinet of Ministers.

Parliamentary oversight is also established, requiring the Cabinet to report on the progress of stabilization measures at least quarterly to the Saeima's Budget and Finance Committee. The law passed with 54 votes in favor, supported by the "United List," National Alliance, "New Unity," and "Progressives" factions, while 21 members voted against it.