From July 28 to 29, Finance Minister Arvils Ašeradens participated in a meeting of German and Baltic finance ministers in Vilnius. The ministers discussed several strategically important issues, including the European Commission's (EC) proposal for the European Union's (EU) long-term budget, or Multiannual Financial Framework for 2028-2034, competitiveness challenges and the development of the Savings and Investment Union, the commitment of countries to strengthen their defense capabilities and the related financing needs. During the meeting, all countries reaffirmed their support for Ukraine and its fight against the aggressor, emphasizing the importance of this support not only for Ukraine's security, but also for the security of Europe as a whole. At the end of the visit, the Baltic finance ministers signed a joint letter to the European Bank for Reconstruction and Development (EBRD), calling for continued and expanded cooperation to strengthen the regional capital market.
"The Baltic States and Germany are united in their call for a flexible and forward-looking EU budget that strengthens European security, competitiveness and solidarity. Like Latvia, all countries are currently analyzing the EC's proposal for the EU's multiannual budget in detail, and it is clear that further discussions to reach a joint decision by all EU Member States will not be easy. At the same time, we reaffirmed the close relations between the Baltic States and Germany and our common goal of strengthening Europe, its economy, capital markets and defense capabilities," said Finance Minister Arvils Ašeradens.
Along with discussions on the future of the regional capital market, the finance ministers of the Baltic States and Germany discussed the EC's proposal for the EU's long-term budget, or Multiannual Financial Framework, for 2028-2034. The Latvian finance minister emphasized the need to ensure a simpler and more flexible EU budget that would simultaneously maintain sufficient funding for cohesion and agricultural policies and provide targeted support to countries that border aggressor countries and are experiencing a major socio-economic impact due to the war in Ukraine. Countries have different priorities, and finance ministers acknowledged that further discussions to reach a joint decision by all EU Member States will not be easy.
After World War II, the first German brigade-level unit outside the country's territory was deployed in Lithuania, and approximately 700 German soldiers are currently serving in Lithuania. By 2027 Germany plans to expand its presence to 5,000 Bundeswehr personnel. The German finance minister emphasized that Germany and the Baltic states are close allies and reliable partners in strengthening security on Europe's eastern flank. The finance ministers also discussed options for increasing defense spending in national budgets as well as the need to provide long-term financial support to Ukraine, including the creation of a new EU instrument and legal solutions for the transfer of frozen Russian central bank assets for the reconstruction of Ukraine.
During the meeting, the parties agreed to meet again in Riga next year, and Latvian Finance Minister Arvils Ašeradens invited the Estonian and Lithuanian ministers to participate in the Baltic Capital Markets Conference, which will take place in Riga on November 27 this year. The conference will be devoted to discussions on the development opportunities for capital markets in the region, highlighting their importance in ensuring sustainable financing, especially in relation to growing defense needs and budget deficit challenges. An important role in the discussions will also be given to promoting private sector involvement and strengthening the integration of Baltic capital markets.
At the end of the visit, the finance ministers of Latvia, Lithuania and Estonia signed a joint letter to the EBRD, calling on the EBRD to give new impetus to existing cooperation and to work together on improving market infrastructure and regulation, expanding the availability of financial instruments, promoting the attraction of institutional investors, and improving financial literacy among entrepreneurs and investors. The letter also calls for the renewal of the memorandum of cooperation and the organization of a special session on the development of the Baltic capital market at the EBRD's annual meeting, which will take place in Riga on June 5-7, 2026. This would demonstrate the unity of the Baltic states and the investment potential of the region to the international community.
A strong Baltic capital market is an essential tool for the region's economic growth. It would not only provide broader financing opportunities for businesses, but also promote investment flows and improve the competitiveness of the Baltic states. To date, the EBRD has been an important partner in the development of the Baltic capital markets and is highly valued for its contribution to the creation of a regional and functional capital market.
In order to maintain the pace of development, it is essential to strengthen the competitiveness and visibility of the Baltic region, especially in view of geopolitical challenges, climate goals and digitalization needs. A stable and developed regional capital market will also serve as a basis for savings and investment.
