00:08Tore Misvalis, Minister for Finance for Lithuania, thank you very much for joining us on Euronews.
00:13Thank you for inviting me.
00:14We heard the invitation from Ursula von der Leyen, President of the European Commission, to Canada for an associate membership.
00:20What does that mean to you, taking into context what we're experiencing now with the withdrawal from the United States,
00:27from the Transatlantic Partnership, the U.S. not being the ally it once was, essentially?
00:32I believe, you know, we should be quite patient with such kind of, let's say, summaries,
00:39because, you know, for us, you know, for Lithuanians, United States is a core ally.
00:44We still, we live in this transatlantic cooperation and we don't want to have some kind of misunderstanding in our
00:51communication.
00:52and I believe if Canada is willing to have more intensive cooperation with the European Union,
00:58we're also accepting that as well.
01:00So we believe it could be a part of the dual transatlantic cooperation form.
01:06So we don't look at this like with some kind of...
01:12Either or.
01:13Either or.
01:14We're just perhaps, we're going to consider this as an additional cooperation opportunity for the European Union with North America.
01:22However, we still believe in the European cooperation with the United States, the way we had before.
01:28And as I said, any kind of efforts to stabilize the current geopolitical situation,
01:35even without the more predictable measures that we used to have before,
01:41I think they might pay back in the future.
01:44So what do you make then of the decisions by the United States over the past few years?
01:49The withdrawal from really important divisions within the NATO force model, bombers, F-16s, F-35s, and so on.
01:57Also, the changes to the force posture.
02:02We've heard that potentially it could be as much as 25,000 to 40,000 U.S. troops being removed
02:07from NATO territory.
02:08How many are you concerned?
02:09Of course, we're concerned.
02:11We're very concerned about some, you know, signals that we might have less troops in the European Union,
02:17in the European continent, in our region as well.
02:20It's always frustrating at the beginning.
02:22However, we have no right to believe that it's already determined that there will be a collapse of NATO.
02:28We have no signs for that.
02:30Of course, there are negotiations on different aspects, on different angles,
02:33but we still believe that NATO is strong.
02:36Do you think then this Security Council that Ursula von der Leyen is proposing,
02:40which would be the European states of NATO with Ukraine,
02:44that that is important in terms of responding to what we're seeing,
02:48particularly in countries like Lithuania, the Russian shadow war aggression that we're seeing?
02:53Yeah, I mean, I believe any kind of effort to make Europe more united is also,
02:59so it's already a positive step because it's pathetic, you know,
03:04when all this banal thing that, you know, half a billion nation needs to be begging,
03:11you know, it needs to beg, you know, the 330 million nation to be protected from 140 million nations.
03:17So it's really pathetic.
03:18You mean Europe looking to be protected by the U.S. from Russia involving 14 million?
03:22Exactly.
03:23So this is what kind of situation we have.
03:26So it's really, really pathetic.
03:27So I think, you know, the sort of the good thing that happened after this full-scale invasion to Ukraine
03:33that Europe has spoken up, you know, we don't, we're not naive anymore.
03:38We're not showing that, you know, somebody must protect, you know, us from the others.
03:44We need to do it ourselves.
03:46And Ukraine, courage, has shown a lot that smaller nation, even like three and a half times smaller nation,
03:53is capable to do this.
03:55Okay.
03:55Now you are, you've been well on your way to 5% of GDP expenditure anyway,
04:00since before The Hague and the demands by Donald Trump.
04:04They're almost 5 or 4%.
04:05Can you tell us a little bit about what that money is being spent on,
04:09particularly, you know, in relation to drones, because that's the kind of constant.
04:12The air defense is the core priority at the moment for us.
04:16We realize that the contemporary world has completely changed, you know, the rules,
04:21the priorities for the defense, especially what we see nowadays.
04:24It's not about tanks going from one side to another.
04:27It's only about having some efficient defense system for the airstrikes, mainly.
04:33And obviously our priorities go to the air defense side, of course.
04:38Drones, promoting drones, anti-drone systems.
04:41So this is the core priority for us.
04:44And also we believe that there are some new technologies emerging that might help,
04:49you know, to deal with this.
04:50But because now it's not about how much money you spend.
04:52Now it's about how effective in this expenditure you are and how smart you're dealing with potential threats.
05:00Because the reason I'm asking you as finance minister is because you have to spend the money to invest in
05:04all of this
05:05and you have to see a return for the money.
05:07I mean, how much is this advancing your economy in a way in terms of development investment?
05:14One of the initiatives that we had with the agreement with Polish, with our president,
05:18the Polish president, that we're launching a free economic zone on the border with Poland.
05:23And this allows us to have a lot of confidence that our defense industry will have a chance to grow
05:30a lot,
05:31much more than we had before.
05:32And we already spoke with the potential global market leaders about it.
05:37So we, in surprise, we got a very positive feedback from them.
05:41They were all, most of them, whether it was United States company, whether it was Canadian, Israeli,
05:46or Norwegian or French company, they were always, or Turkish company,
05:51they were all willing to be a part of this free economic zone.
05:54So for us, it's a good sign that it's not going to be just expenditure.
05:59This determination regarding this amount of money allows us to have a chance to be a regional leader
06:06in the defense industry and to attract investments to our country, to create jobs, and to be more resilient.
06:13Instead of considering this as some kind of loss or just an expenditure,
06:19we converted this approach into new opportunities for our economy.
06:22And we believe that this resilient approach is going to be very, very profitable in full scale.
06:30There are concerns from, I suppose, civil society groups that the constant focus on security and defense,
06:36while important, maybe funds too much weapons manufacturers and keeps that going to a little bit lucratively.
06:46What's your own sort of feeling about that, that balance that is required?
06:49Well, you know, when you have a pure threat next to your door, you think differently.
06:55You realize that perhaps the biggest motivation and courage for the aggressor was that we, as a regional,
07:04we didn't make enough efforts in order to stop them or demotivate them, you know, to keep on moving.
07:09I keep saying that, you know, 18 years ago, we had a very, very almost identical situation when Georgia lost
07:1715% of their territories.
07:19And just right after, you know, we, as Europe, we didn't make enough efforts to support them.
07:27What we have now today, Georgia is completely back in Russian arms.
07:30What we have now with Ukraine is 10 times larger.
07:34We don't want this scenario to repeat in the Ukrainian side because it's 10 times bigger and it's even closer
07:41to our heart of Europe.
07:43And one thing that's really on the agenda at this ECOFIN meeting is the windfall tax for energy companies
07:49that have had extraordinary profits made as a consequence of the chaos that we're seeing in the Middle East.
07:56But in addition to that, European taxpayers are suffering.
08:00Some people can't fill their cars.
08:01They can't pay their heating.
08:02We're coming into winter.
08:03Do you support a European tax on windfall profits?
08:09Well, you know, as a minister of finance, now I have my own lessons learned, you know, to be quite
08:14cautious regarding, you know, new taxation.
08:16And, of course, it depends on the brighter vision, you know, how these additional taxes, you know, could be spent.
08:24In case if we're very determined and very confident about our expenditure plan and our action plan, why we're doing
08:33this, there's one way.
08:34But I believe that any kind of taxation should evaluate potential growth scenario, potential ability to be competitive globally.
08:45Because if we increase taxes to our market players, you know, some of the regions like BRICS countries, like other
08:53areas,
08:54like Mercosur countries that we started cooperation with as European Union, they might, you know, use a chance, you know,
09:01to take additional market share.
09:04So, global market share.
09:05So, we should be as careful as possible.
09:07But then what you say to the disparity there.
09:09I mean, there's a clear disparity that these companies are, they're making so much money out of misery and other
09:15taxpayers are, you know.
09:17So, there has to be a responsibility for Europeans and governments like yourselves to intervene in some way to make
09:24some fairness adjustment.
09:26I agree.
09:26And what would that look then?
09:28Well, we'll see.
09:29We just started our negotiations.
09:30So, we'll see, you know, what's going to be the feedback after, like, all countries, they share their points of
09:35views.
09:36And I think now it's a bit too early to see, like, what's going to be the decision about it.
09:42Okay.
09:43And just finally, we've got this negotiation for the next round of sanctions against Russia.
09:49The French and the Slovakians, but mainly the French, are insisting that the name of Omanerov is removed from the
09:56sanctions list.
09:57The presidency, the Irish presidency of the European Council is saying that, you know, we can't allow this because we
10:03thought we saw the end to removing names of sanction lists when Victor Orban was unelected.
10:09And what's the Lithuanian position on that?
10:12For the sake of getting the next sanctions package across the line, would you be willing to give in to
10:18the French?
10:18They say it's an issue of national security.
10:22Well, regarding any release of sanctions, we're very skeptical because the war is not over.
10:27We believe that any kind of effort to minimize sanctions for Russia before we have a peace deal, I believe
10:39that the Russian side could consider it as our weakness.
10:42So we're always very skeptical at this stage regarding any kind of decrease of sanctions regarding Russia.
10:51So for us, it's a red line, and we don't support any kind of lighter approach before we're having break
10:59-even regarding the peace deal.
11:01So what if the sanctions are held up?
11:05Because remember, this sanctions package relates to 3,000 individuals and companies, so it's a big one if it's not
11:12allowed to pass.
11:13I know, I know, but we are very skeptical regarding this kind of scenario because we believe it's too early.
11:22We believe that Russia should understand that we are united.
11:27We see Ukraine as a part of our enlargement process and any kind of efforts to occupy more or just
11:37make more damage to Ukraine, even like in the future, it's completely unacceptable.
11:43And we just fully support even like providing more sanctions to Russia.
11:49Yeah.
11:50Tarim Asfalis, Minister for Finance for Lithuania, thank you very much for joining us on Euronews.
11:54Thank you very much.
11:56Thank you.
11:57Thank you.
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