If until now money from taxpayers' pockets has been flowing to airBaltic either based on the COVID law or on the basis of a parliamentary resolution, tomorrow the parliament will adopt a unique document of its kind - the Law on Measures for the Financial Stabilization of airBaltic! What does this special law provide? Here are excerpts from the main articles of the draft law: Measures for the stabilization of airBaltic's finances (hereinafter referred to as the company - ed.): (1) To stabilize the company's finances, one or more of the following measures shall be implemented in accordance with this Law: 1) amend the contract for the state loan granted to the company in the amount of 3,000,000 euros by extending the repayment period of the unpaid principal amount of the loan, accrued interest, and other obligations arising from the contract; 2) fully or partially capitalize any claim arising from the state loan granted to the company in the amount of 3,000,000 euros; 3) capitalize, convert, or otherwise transform claims arising from the state-owned bonds of the company in an amount not exceeding the actual unpaid principal amount of the state-owned bonds, but not more than 50,000,000 euros, which includes the corresponding amounts of accrued interest and other claims arising from the bonds. 4) participate in providing interim financing to the company by purchasing state youth bonds of the company in an amount not exceeding 3,000,000 euros. And here is what is specifically stated in the annotation to the draft law: The state has several interconnected financial positions in the company: the state is the largest shareholder of the company, a creditor of the state loan, and a holder of bonds issued by the company. The company is undergoing a financial stabilization process, which involves restructuring the company's liabilities and capital structure and attracting new financing. In this process, the state participates alongside private creditors and depositors - international institutional investors, whose decision-making occurs in a commercial environment and within commercial timelines. In contrast, the decision-making of the state as a public entity is determined by a chain of sequential approvals and endorsements by the Cabinet of Ministers and the Saeima in individual cases, as well as the procedures provided for by budgetary and fiscal discipline regulations. This order is justified under normal conditions; however, in a multilateral financial transaction involving private creditors, where decisions on the terms of the transaction are made and approved within days or weeks, it places the country in a structurally unequal position compared to other participants. If the state is unable to confirm its position or join the terms agreed upon by other creditors within the established timeframe, it risks losing the opportunity to participate in the transaction on the same terms available to private creditors, including the possibility of maintaining or improving the priority of its claims. Such inability to act in a timely manner can directly worsen the country's position as a creditor and reduce the recoverable value of state claims and contributions - that is, cause financial losses to the state not due to the content of decisions but solely due to the speed of decision-making. The purpose of the draft law is to create a special execution procedure that allows the state to manage its financial interests in the company promptly, uniformly, and equally with other shareholders and creditors of the company. The draft law does not grant the Cabinet of Ministers independent authority to make decisions on changing the state's financial exposure - the maximum volume and framework of measures are established by Article 2 of the draft law, and it can only be changed by amendments to this law adopted by the Saeima. Within these limits, the draft law delegates the Cabinet of Ministers the authority to make operational decisions regarding the implementation of measures, while the Budget and Finance (Tax) Commission of the Saeima is ensured a supervisory role. Notably, the "promise" to extend the loan repayment period until December 31, 2026, is not recorded in the draft law! It is simply stated that the loan repayment period is extended! Such a trick... At the same time, there is no doubt that the law will be adopted.
