On Thursday, 30 January, the Saeima adopted in the final reading the Law on the Treaty Establishing the European Stability Mechanism, thus making Latvia, as a member of the euro area, also a full-fledged member of the European Stability Mechanism.
The parliament also adopted in the final reading regulations on Latvia’s representation at the institutions of the European Stability Mechanism – the Board of Governors and the Board of Directors.
The Treaty stipulates that upon joining the euro area, all member states also become members of the European Stability Mechanism with full rights and obligations.
The aim of the European Stability Mechanism is to provide financial support and stability to member states experiencing or threatened by serious financial difficulties in order to protect the financial stability of the other member states and the euro area as a whole.
It is planned that in the first five years after joining the euro area, Latvia will have to invest EUR 44 million into the European Stability Mechanism each year, but after the end of the 12 year transition period – EUR 130 million.
According to the ratified Treaty, the Cabinet of Ministers will delegate the Minister of Finance to represent Latvia on the Board of Governors, and the alternate Governor will be delegated by the Cabinet of Ministers on the basis of the proposal of the Minister of Finance. Latvia’s representatives on the Board of Directors will be appointed by the Minister of Finance.
Depending on the nature of the decision at hand, the Latvian representative on the Board of Governors will have to obtain the consent of the Saeima, the Budget and Finance (Taxation) Committee of the Saeima or the Cabinet of Ministers.
Saeima Press Service