Latvia approves third Greek bailout but keeps veto in reserve

Latvian politicians approved the country's participation in a third financial bailout for fellow eurozone member Greece Monday.

In two meetings behind closed doors at both the parliament or Saeima and at the Cabinet Office in central Riga, deputies and cabinet members both approved Latvia's participation in the €86bn deal in principle.

Latvia's position specifies that the Greek parliament has to agree to the bailout conditions but also that no Latvian money is used to write off Greek debt.

The news will have come as a relief in Athens as in theory a 'no' from Saeima, where there is strong opposition from most parties to giving Greece more money, could in theory have scuppered the whole deal ad given Latvia a certain amount of explaining to do to its eurozone colleagues.

A sitting of the Saeima's European Affairs Committee failed to reach a decision on August 14, so Monday's session was a continuation of that effort.

Committee chairwoman Lolita Cigane told LSM Monday's session had been "quite dramatic" and that one member of the ruling coalition had abstained from the vote which saw 9 deputies in favour of the deal and 3 against.

However, the committee had also insisted on reserving the right to veto the Greek deal should any attempt be made to use Latvia's contributions to the European Stability Mechanism (ESM) to write off Greek debt - though no such attempts have yet been made, Cigane stressed.

"There was a low level of trust in the Greek government based on their previous track record but... we managed to confirm the position of the government and believe it is sufficiently demanding," Cigane said.

No Latvian vote was required for previous Greek bailouts as when they were agreed Latvia was not yet part of the eurozone, which it joined on January 1, 2014. 

As previously reported by LSM, Latvia is one of the more hawkish countries on Greek aid. Having undergone its own painful austerity drive during 2008-10, many Latvians have little sympathy with what they see as Athens' half-hearted attempts to get its finances back on track.

Following the cabinet meeting the point was made explicitly by Foreign Minister Edgars Rinkevics who tweeted:

 

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