Lithuania pleas for EU funds as it bears brunt of Russia’s war

euronews (in English)

Brussels shouldn’t forget its border regions as it revamps its trillion-euro budget, the finance ministry's Mindaugas Liutvinskas told Euronews – as he urges EU counterparts to seize Russian assets and issue eurobonds.

Transcript

00:00cohesion policy has to maintain focus because that's

00:03the one most effective long-term investment instrument that the

00:08European Union has

00:09and over decades it has shown its efficiency and

00:14the value added it brings. So just to give you a few numbers, last year

00:17we stood at virtually zero in terms of real GDP growth which was

00:21not too good but not too bad also given the shocks that we are

00:25facing

00:26and this year we're coming back to growth. We're growing at about

00:292.3% in real terms, this to be strengthened further

00:33next year closer to 3%. So you know the economy is pretty resilient

00:37but doesn't mean that the challenges are not there. Of course we are still

00:41receiving inward FDI but not at the scale

00:44as it could have been without the war so to say. So the trend is a

00:48bit different.

00:49Then you need maybe public instruments to fill the void

00:52and if you look at the macro numbers our exports

00:55nosedived in last year so we had negative export growth

01:00which is not good news for a small open economy as Lithuania

01:03and now the big chunk of that decrease in exports came from

01:07re-exports that is basically taking goods from Western Europe and bringing

01:11them to Eastern markets which were

01:13either lost or sanctioned. I guess the best strategy

01:17how to reassure especially foreign investors is

01:21to treat our own security in a very serious manner which we do

01:24to increase our defense spending to make sure that we are ready to defend

01:28if any need arises because then you have a safe environment

01:32in which the investors can come. There's no question about that. Even when war

01:35ends at some point we will still be living

01:39close to Russian Belarus so that's basically the aggressor country so the

01:41regions will still be bordering them and the problematics will remain in terms of

01:45their hampered economic and social convergence and we need some European

01:48instruments

01:49primarily cohesion policy to actually deal with it. To try to mitigate these

01:53effects to

01:54to help promote investment, to help promote businesses, to ensure

01:58talent attraction so that people could come and stay in those regions

02:01to ensure their economic viability. You have to invest more money

02:04into interconnections, cross-border interconnections between countries so

02:09basically

02:10getting us more integrated by both hard and digital infrastructure

02:13within the single market. You have to invest into

02:16resilience of supply chains and the resilience of value chains which

02:20basically means

02:21getting more deeply involved and integrated into the single market

02:25fostering economic connections with the democratic

02:28trustable governments in Europe and beyond. And then I think

02:32also where European funds and cohesion policy can play a role

02:36is providing additional impetus on innovation financing so that our

02:39economies would move

02:40to higher value added which would then also increase their resilience and

02:44reduce maybe

02:45vulnerabilities to future shocks.

02:48So I guess you know these are big things, structural things

02:52not just easy to fix but I guess this is the direction where cohesion policy

02:55should be going. One of the issues that's been raised by some people is that

02:59there could be new financing revenue generation instruments

03:02in support of EU defence and in support of Ukraine

03:06you know, there's talk of euro bonds for kind of defence capacity and so on.

03:10Do you think that's a plausible outcome? We would be open to explore possibilities

03:15for

03:16ad hoc potential borrowing instruments

03:19at the EU level to help you know find additional resources maybe in a more

03:24timely manner

03:24not to wait just for the next MFF which will take a while to negotiate, take a

03:28while to kick in in practice.

03:29So we're open and we've been raising the issue

03:33in the European formats for some time now.

03:36Let's see how it goes but you know I feel that if there is

03:40a place where countries could and should shift the red lines

03:43that is defence because that's a common thing for all of us. We have

03:46very good economic cooperation with Germany and increasing military

03:50cooperation links so I think it's a matter of dialogue and a bit of

03:54matter of time for them to understand

03:56for all the European partners to understand our complexities and

03:59where we are in the region. I wouldn't support I guess the discussion

04:04going into the direction of making cohesion policy more rigid

04:07less flexible and less adaptive. I guess that's not the way we should go.

04:11We should maintain the flexibility, the adaptability because

04:14that is part of the success of this cohesion policy.

04:17The financing gap for Ukraine is increasing for next year and

04:21Europe has a responsibility to help Ukraine

04:24so that it would have enough funding to keep the economy going, to keep the

04:27military going.

04:28And the element that we find very important is that we need to have G7

04:31partners on board too.

04:32The United States and other G7 partners.

04:36And for them to be on board they have indicated that they need some

04:40additional assurances when it comes to our sanctions regime. So of course

04:43we and the majority of member states around the table

04:47are okay with what has been proposed by the Commission to adapt and enhance the

04:51sanctions regime.

04:52So far we have not been able to reach an agreement

04:55among all of the member states. I hope that we will manage to do so in the

04:59upcoming

05:00weeks because as I said you know time is ticking

05:03and we don't have the luxury of waiting until whatever end of the year to

05:08try to reflect what we can do.

05:10I hope that we will manage to reach some sort of an agreement with the

05:13Hungarian

05:14presidency on how we can enhance the sanctions regime

05:17and I hope that Hungary will see it and we will be able to

05:21find an agreement.

05:22I think that at some point in time we will inevitably have to have

05:25a tougher discussion, potentially as part of

05:29reparations to Ukraine to actually seize the assets that are

05:32now frozen within the EU and provide them as part of the reparation package

05:37to Ukraine. But that's probably a question for the future.

05:40We have the first round of elections, parliamentary elections this Sunday so

05:43pretty soon

05:44we'll see what the results are but

05:47my take is that on the key

05:50strategic and fundamental issues be it security or foreign policy or

05:54outlook towards the EU we should not have

05:57dramatic changes.

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