Latvia goes along with Greek bailout - for now

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Latvian Finance Minister Janis Reirs joined his European colleagues in backing a new €86 billion bailout for Greece August 14 but immediately warned the cash was dependent upon Athens instigating real reforms. 

"It is very important that the funds allocated to Greece be divided into several installments to be granted only in line with the agreed implementation schedule after specific steps have been implemented."

Greek banks and shareholders rather than Europe's taxpayers should foot the bill for a banking rescue, Reirs added.

However, official sources have confirmed to LSM that Latvian backing for the deal will depend upon a vote of the parliamentary European Affairs Committee, which is due to reconvene on August 17 after a hot-tempered meeting on August 17 failed to reach agreement.

In order to reach a quorum, at least 9 of the committee's 17 members need to participate in a vote, with the result depending upon a simple majority.

Failure to back the deal would potentially not merely scupper Latvian participation in the bailout but the whole bailout itself, as unanimous agreement is required from all eurozone member states for the deal.

In addition, the Latvian cabinet will need to approve the deal insofar as it affects Latvia's participation in the European Stability Mechanism (ESM).

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