Politicians are trying to tell the public that the main purpose of the amendments to the law is to enable the state to purchase bonds issued by state-controlled companies, the development of Latvia’s capital market will be significantly promoted, and these changes will allow the state to be more actively involved as an investor not only in the financial sector, but also in strategically important companies.
It is more than certain that they are absolute fairy tales for the naive, and it is equally certain that the real addressee of the amendments to the law is only one specific company – the national airline airBaltic. This impression is reinforced by the fact that the drafter of the amendments is the Ministry of Transport, under the supervision of airBalticand also that July of this year, when it ends, is fast approaching airBaltic 200 million euro bonds maturity, so the company is looking for external financing to refinance these bonds. In addition, the company plans to attract additional financing in the amount of around 100 million euros. We can make an assumption – the Minister of Transport Kaspars Briškens has (as he probably thinks) come up with a cunning plan to escape from another scandal related to airBaltic’s financial problems, and the amendments to the law have no apparent connection with the government’s possible plans to engage in “investment” in other in Latvian state capital companies.
I can agree with the opinion that it is valuable for Latvia that we have our own national airline, I also understand that part airBaltic financial problems due to the impact of the Covid-19 pandemic, and perhaps I could even support donating a new portion of taxpayers’ money to save the airline. However, there is one important “but”! In my opinion, before “bailout money” is pumped into the airline again and again, and probably more than once, the replacement of the current management of the company should be seriously considered. Not only should it be considered, but it should be done. Because it doesn’t look like the existing one airBaltic the management would be such high-level professionals, who would still have to pay an inappropriately high salary for the company’s financial situation.
