As always, let's start with the pros of the government bailing out (nationalizing*) Parex bank, and just in general, bailing out businesses.
First, this is the only way that the bank can be kept alive. Since this was the largest nationally owned bank (one that is not a nordic immigrant bank), it would wreck the already weak Latvian economy, leaving irreversible effects on the Latvian, as well as possibly neighboring countries’ economies. This can be confirmed by a Moody’s report, saying that, "Latvia and Hungary were stabilizing but that their economies remained fragile. The problem is high debt levels, which is restraining consumer spending.” This means that if the Latvian government hadn’t bailed out the bank, and returned some money into circulation to cover debts, it would probably have left the Latvian economy in something far worse than the already present crisis, with the PPF* decreasing even more than it already had decreased.
Another positive thing about bailing out Pa
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