Brussels, 25/11/2008 (Agence Europe) - On Tuesday 25 November, the European Commission approved the emergency support given to finance JSC Parex Banka. The Commission found the aid to be in line with its guidance communication on state aid in this area (EUROPE 9760). On 10 November 2008, the Latvian authorities notified a package of measures aimed at tackling the liquidity problems and possible shortcomings in capital of JSC Parex Banka. The package contained a state deposit to support the bank's immediate liquidity needs and subordinated loans to strengthen its capital base. The maturity for new loans is limited to three years and for subordinated loans to five years. A subordinated loan is one that is not repaid, due to bankruptcy or forced loan recovery, until after the other debts of the borrower have been repaid. The Commission said that it is satisfied with the modalities contained in these measures, particularly the scope and period limited to what is strictly necessary for re-establishing the bank's financial stability. The Commission was also pleased with the suitable level of repayment planned and the precautionary measures aimed to keep any distortion of competition to a minimum. These include a limit on growth in the balance sheet, marketing restrictions relating to state support and restrictions on acquiring businesses or companies while the bank benefits from the aid. The Commission decision covers a period of six months, following which Latvia should terminate the public support to the bank or renotify to the Commission for a new assessment. The non-confidential version of the decision will be published in the state aid register (http: //ec.europa.eu/comm/competition/state_aid/register) under the case number NN 68/2008. (C.D./transl.rh)