00:08Toremy Svalis, Minister for Finance for Lithuania.
00:11Thank you very much for joining us on Euronews.
00:13Thank you for inviting.
00:14We heard the invitation from Ursula von der Leyen,
00:16the President of the European Commission,
00:18to Canada for an associate membership.
00:20What does that mean to you?
00:22Taking into context what we're experiencing now
00:25with the withdrawal from the United States,
00:27from the Transatlantic Partnership,
00:28the U.S. not being the ally it once was, essentially.
00:32I believe, you know, we should be quite patient
00:35with such kind of, let's say, summaries,
00:39because, you know, for us, you know, for Lithuanians,
00:42United States is a core ally.
00:44We still, we live in this Transatlantic cooperation,
00:47and we don't want to have some kind of misunderstanding
00:50in our communication.
00:53And I believe if Canada is willing to have
00:56more 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
01:03Transatlantic 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
01:17as an additional cooperation opportunity
01:19for European Union with North America.
01:22However, we still believe in the European cooperation
01:24with the United States the way we had before.
01:28And as I said, any kind of efforts
01:31to stabilize the current geopolitical situation,
01:35even without the more predictable measures
01:39that 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
01:47by the United States over the past few years?
01:49The withdrawal from really important provisions
01:52within the NATO force model,
01:54bombers, F-16s, F-35s, and so on.
01:57Also, the changes to the force posture.
02:02We've heard that potentially it could be
02:03as much as 25,000 to 40,000 U.S. troops
02:06being removed from NATO territory.
02:08Are you concerned?
02:10Of course we're concerned.
02:11We're very concerned about some signals
02:14that 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
02:25that it's already determined
02:26that there will be a collapse of NATO.
02:28We have no signs for that.
02:30Of course, there are negotiations
02:31on different aspects, on different angles,
02:33but we still believe that NATO is strong.
02:36Do you think, then, the Security Council
02:38that Ursula von der Leyen is proposing,
02:39which would be the European states of NATO
02:42with Ukraine, that that is important
02:45in terms of responding to what we're seeing,
02:48particularly in countries like Lithuania,
02:50the Russian shadow war aggression that we're seeing?
02:53Yeah, I mean, I believe any kind of effort
02:56to make Europe more united is also,
02:59it's already a positive step,
03:02because it's pathetic, you know,
03:04when all this banal thing that, you know,
03:06half a billion nation needs to be begging,
03:11you know, needs to beg, you know,
03:13the 330 million nation to be protected
03:15from 140 million nations.
03:17So it's really pathetic.
03:18You mean Europe looking to be protected by the U.S.
03:21from Russia involving 14 million?
03:22Yeah, exactly.
03:23This is what kind of situation we have.
03:26So it's really, really pathetic.
03:27So I think, you know,
03:29the sort of the good thing that happened
03:31after this full-scale invasion to Ukraine
03:33that Europe has spoken up, you know,
03:37we don't, we're not naive anymore.
03:38We're not showing that, you know,
03:41somebody must protect, you know,
03:43us from the others.
03:44We need to do it ourselves.
03:46And Ukraine, courage has shown a lot
03:49that smaller nation,
03:51even like three and a half times smaller nation,
03:53is capable to do this.
03:54Now you are, you've been well on your way
03:57to 5% of GDP expenditure anyway,
04:00since before the Hague
04:02and the demands by Donald Trump.
04:04They're almost 5.4%.
04:05Can you tell us a little bit about
04:06what that money is being spent on,
04:09particularly, you know, in relation to drones,
04:11because that's the kind of constant.
04:12The air defense is the core priority
04:14at the moment for us.
04:17We realize that the contemporary world
04:19has completely changed, you know,
04:20the rules, the priorities for the defense,
04:23especially what we see nowadays
04:24is not about tanks going from one side to another.
04:27It's only about having some efficient defense system
04:31for the airstrikes mainly.
04:33And obviously our priorities go to the air defense side,
04:38of course, drones, promoting drones,
04:40anti-drone systems.
04:41So this is the core priority for us.
04:44And also we believe that there are some new technologies
04:47emerging that might help, you know,
04:49to deal with this.
04:50because now it's not about how much money you spend.
04:52Now it's about how effective in this expenditure you are
04:57and how smart you're dealing with potential threats.
05:00Because the reason I'm asking you as finance minister
05:02is because you have to spend the money
05:04to invest in all of this
05:05and you have to see return for the money.
05:07I mean, how much is this advancing your economy
05:10in a way in terms of development investment?
05:14One of the initiatives that we had with the agreement
05:16with our president and the Polish president
05:19that we're launching a free economic zone
05:22on the border with Poland.
05:23And this allows us to have a lot of confidence
05:26that our defense industry will have a chance
05:29to grow a lot, much more than we had before.
05:32And we already spoke with the potential
05:35global market leaders about it.
05:37So in surprise, we got a very positive feedback from them.
05:41Most of them, whether it was a United States company,
05:45whether it was Canadian, Israeli,
05:47or Norwegian, or French company,
05:49they were always, or Turkish company,
05:51they were all willing to be a part
05:53of this free economic zone.
05:54So for us, it's a good sign
05:56that it's not going to be just expenditure.
05:59This determination regarding this amount of money
06:02allows us to have a chance
06:04to be a regional leader in the defense industry
06:07and to attract investments to our country,
06:09to create jobs, and to be more resilient.
06:13Instead of considering this as some kind of loss
06:16or just an expenditure,
06:18we converted this approach into new opportunities
06:21for our economy.
06:22And we believe that this resilient approach
06:25is going to be very, very profitable in full scale.
06:30There are concerns from, I suppose,
06:31civil society groups that the constant focus
06:35on security and defense, while important,
06:38maybe funds too much weapons manufacturers
06:41and keeps that going a little bit lucratively.
06:46What's your own sort of feeling about that,
06:47that balance that is required?
06:49Well, you know, when you have a pure threat
06:53next to your door, you think differently.
06:55You realize that perhaps the biggest motivation
06:59and courage for the aggressor was that
07:02we, as a regional, we didn't make enough efforts
07:05in order to stop them or demotivate them,
07:08you know, to keep on moving.
07:09I keep saying that, you know, 18 years ago,
07:12we had a very, very almost identical situation
07:16when Georgia lost 15% of their territories.
07:19And just right after, you know, we, as Europe,
07:25we didn't make enough efforts to support them.
07:27What we have now today, Georgia,
07:28is 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
07:37in the Ukrainian side because it's 10 times bigger
07:39and it's even closer to our heart of Europe.
07:43And one thing that's really on the agenda
07:45at this ECOFIN meeting is the windfall tax
07:48for energy companies that have had
07:50extraordinary profits made as a consequence
07:53of the chaos that we're seeing in the Middle East.
07:55but 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,
08:11now I have my own lessons learned, you know,
08:13to be quite cautious regarding, you know, new taxation.
08:16And then, of course, it depends on the brighter vision,
08:20and how these additional taxes, you know, could be spent.
08:24In case if we're very determined and very confident
08:28about our expenditure plan and our action plan,
08:32why we're doing this, there's one way.
08:34But I believe that any kind of taxation
08:37should evaluate potential growth scenario,
08:42potential ability to be competitive globally.
08:45because if we increase taxes to our market players,
08:49you know, some of the regions like BRICS countries,
08:52like other areas, like Mercosur countries
08:56that we started cooperation with as European Union,
08:59they 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 do you say to the disparity there?
09:09I mean, there's a clear disparity that these companies are,
09:12they're making so much money out of misery
09:15and other taxpayers are, you know,
09:17so there has to be a responsibility for Europeans
09:20and governments like yourselves
09:22to intervene in some way to make some 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
09:32after, like, all countries, they share their points of views.
09:36And I think now it's a bit too early
09:39to see, like, what's going to be the decision about it.
09:42Okay.
09:43And just finally, we've got this negotiation
09:46for the next round of sanctions against Russia.
09:49The French and the Slovakians,
09:50but mainly the French,
09:51are insisting that the name of Omanerov
09:55is removed from the sanctions list.
09:57The presidency, the Irish presidency
09:59of the European Council is saying that,
10:01you know, we can't allow this
10:02because we thought we saw the end
10:04to removing names of sanctions lists
10:06when Victor Orban was unelected.
10:10What's the Lithuanian position on that?
10:12For the sake of getting the next sanctions package
10:14across the line,
10:16would you be willing to give in to the French?
10:18They say it's an issue of national security.
10:22Well, regarding any release of sanctions,
10:25we're very skeptical
10:25because the war is not over.
10:27We believe that any kind of effort
10:34to minimize sanctions for Russia
10:36before we have a peace deal,
10:38I believe that the Russian side
10:40could consider it as our weakness.
10:42So we're always very skeptical
10:44at this stage regarding any kind of
10:49decrease of sanctions regarding Russia.
10:51So for us, it's a red line.
10:53And we don't support any kind of lighter approach
10:57before we're having break-even
10:59regarding the peace deal.
11:01So what if the sanctions are held up?
11:05Because remember,
11:06this sanctions package
11:06relates to 3,000 individuals and companies.
11:10So it's a big one
11:11if it's not allowed to pass.
11:13I know, I know.
11:14But we are very skeptical
11:16regarding this kind of scenario
11:20because we believe it's too early.
11:22We believe that Russia should understand
11:24that we are united.
11:28We see Ukraine as a part
11:30of our enlargement process
11:32and any kind of efforts
11:34to occupy more
11:36or just make more damage to Ukraine,
11:40even like in the future,
11:42it's completely unacceptable.
11:43And we just fully support
11:45even like providing
11:48more sanctions to Russia.
11:49Yeah.
11:50Tarim Asfalis,
11:51Minister for Finance for Lithuania,
11:52thank you very much
11:53for joining us on Euronews.
11:54Thank you very much.
11:55Thank you.
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