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.
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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.