On Wednesday afternoon, it seems that Prime Minister Evika Silina ('New Unity') herself believed that her government would soon collapse.
The head of government came to this conclusion after all her attempts to convince partners from the 'Green Farmers' to vote for the provision of a 30 million loan to airBaltic failed. Moreover, all hopes of securing support from at least part of the right opposition collapsed.
The President Comes to the Rescue
As it later turned out, the desperate Silina was helped by her former party mate, President of Latvia Edgars Rinkēvičs — his office staff called leaders of the right opposition to find out if they were ready to support the loan for the national airline under certain conditions.
But the president and his team faced disappointment: the opposition members flatly refused. It is understandable: why would they save the government and the ruling coalition five months before the elections by voting for an extremely unpopular decision!
In any case, out of frustration, Evika Silina announced on Wednesday that she was "ready to break the coalition" just to get support from the 'Green Farmers' for the loan for airBaltic.
In this statement, the prime minister also revealed the conditions (read — ultimatum) of the 'Green Farmers' under which they would be willing to vote for the loan for the airline:
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First condition — the company provides a clear plan for overcoming the crisis;
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Second condition — the prime minister dismisses Atis Švinklis from the post of Minister of Transport.
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Third condition — the prime minister herself takes political responsibility for the loan repayment.
Already on Wednesday evening, live on Latvian TV, in the program "Kas notiek Latvijā?" Evika Silina explained what she meant by "the decision to break the coalition": "I am ready, if that is the price for voting on the allocation of the loan, to dismiss the Minister of Transport, and perhaps also the minister from the Union of Greens and Farmers."
Very 'Warm' Relations!
The government crisis was already looming on the horizon, and to put it bluntly — the government has de facto long had "limited capacity" due to constant disputes and conflicts between the 'Progressives' and the 'Green Farmers'.
The level of hatred between representatives of these two parties is reflected in the comment of Riga Mayor Viesturs Kleinbergs ('Progressives') on social media: "The Green Farmers are clowns. They have corrupted the country, and instead of participating in stimulating economic growth, they are trying to blackmail the government. Meanwhile, Atis Švinklis and I are meeting in Hamburg, Lübeck, and Rostock with entrepreneurs, investors, and at the Baltic Sea business summit we are fulfilling the duties of the Minister of Economy."
Economy Minister Viktors Valainis (Union of Greens and Farmers) did not remain silent and soon responded to the capital's mayor: "I read this tweet and a very simple question arises: do you drink at the state's expense on business trips or do you pay for it yourself?"
Silina Scared Partners and They… Gave In
Already yesterday morning, the leaders of the Union of Greens and Farmers, referred to as "clowns" by Kleinbergs, after an extraordinary coalition meeting… gave in and agreed to support the issuance of the loan to airBaltic.
According to rumors, the prime minister warned the 'Green Farmers' behind closed doors that if they effectively blocked the provision of urgent financial assistance to the airline, then all responsibility for canceling flights and, in the worst-case scenario, for the airline's demise would fall on the 'Green Farmers'.
Later that same day, Silina, speaking from the podium of the Saeima, talked about the importance of this airline for the national economy and society as a whole: more than 2,500 people work at airBaltic, the company pays millions in taxes, and provides direct air connections with dozens of countries around the world…
In any case, the 'Green Farmers' gave the green light for the loan, taking from the prime minister a promise to force Minister of Transport Švinklis to reorganize his ministry. If this is not done, Silina promised to dismiss the minister. She confirmed this while speaking at the subsequent plenary session of the Saeima.
From the moment the 'Green Farmers' agreed to support the loan issuance, the other actions were already a "matter of technique": first, the loan issuance was approved by the Saeima's budget and finance committee, and then the decision project to provide the airline with the loan was urgently included in the agenda of the plenary session.
After an hour and a half of debates, the parliamentarians voted for the project that the prime minister and the airline needed. Forty-nine deputies voted "for" the loan provision, twenty-three parliamentarians voted "against", one member of parliament abstained, and several deputies — mainly from the National Alliance — did not participate in the voting at all.
And What Now?
So, the decision has been made. What’s next? Evika Silina assures that the 30 million will not be transferred to the airline's account all at once. It will be a credit line, and an inter-agency group created at the end of last year will monitor the use of the funds or, more precisely, will ensure that the money is spent exclusively on purchasing aviation fuel, which has tripled in price, and related logistics.
By the end of May, the management of airBaltic must present a restructuring plan for the company. The loan with interest must be repaid by the airline by August 31 of this year.
The opposition unanimously assured today that the money will not be returned on time. And in general, the loan was issued only so that the airline could at least last until the elections, that is, until October 3…
However, both the opposition and the ruling deputies believe that closer to autumn, the state will again have to subsidize the airline — considering the total debt exceeding 1 billion euros and the enormous losses. Politicians mention possible investments from the state treasury — from 100 to 150 million euros. It is worth recalling that the company, under the previous management, issued bonds, effectively taking a loan at exorbitant interest rates — 14.5%! Now it has to pay up.
