Ministers of Finance of the Baltic states addressed the EBRD on strengthening the regional capital market
Today, in Vilnius, Minister of Finance of Lithuania Rimantas Šadžius, Minister of Finance of Latvia Arvils Ašeradens and Minister of Finance of Estonia Jürgen Ligi signed a joint statement to the European Bank for Reconstruction and Development (EBRD) on strengthening a pan-Baltic capital market.
In appreciation of the continuous engagement and active cooperation with the Baltic states, the Ministers addressed the EBRD with their intension to renew the Memorandum of Understanding signed by three states in 2017 which has so far led to the development of a pan-Baltic capital market. The Ministers see this as an impetus for enhanced cooperation that would strengthen the competitiveness of the Baltic region.
Strengthening the Baltic capital market would contribute to the EU Savings and Investments Union initiative presented by the European Commission in March this year aimed at increasing the participation of EU citizens in capital markets by promoting the channelling of savings towards the most productive investments. The implementation of this initiative is expected to pave the way for further deepening of the capital market, to provide more investment opportunities, to secure financing for small and medium-sized enterprises (SMEs) and to contribute to reducing cross-border barriers and increasing access to capital.
“We highly value the EBRD as a strong partner in the development of the Baltic capital market, but it is essential to maintain momentum and further increase the visibility and competitiveness of the Baltic region. Enhancing competitiveness and ensuring economic security in the region are particularly important in the light of the current geopolitical situation, climate goals and digitalisation needs”, Minister of Finance R. Šadžius said.
The statement addressed to the EBRD identifies areas and possible actions that could contribute to a more active development of regional capital markets. First, this includes markets and infrastructure. The key objective is to find the most appropriate ways to encourage more companies, including unicorns, SMEs, etc., to raise capital through the Baltic trading venues (covering both traditional and double listings), and to explore possible ways to improve interaction with other securities depositories. Second, promoting the participation of institutional investors. A third step could be the implementation of solutions that would ensure a greater variety and supply of financial instruments and other types of investment opportunities for investors.
The statement also draws attention to legal convergence to identify substantial legal divergences hampering cross-border investment, and the importance of financial education and investor confidence, which could be enhanced by establishing a fiduciary institution, in parallel, ensuring investor rights in bond issues and transparency in the market.
The renewed Memorandum of Understanding is expected to be signed by the Baltic states on 5–7 June 2026 during the EBRD annual meeting in Riga. This would demonstrate a strong Baltic cooperation to the international community, including potential investors, common strengths and investment potential of the Baltic region.
Additional information:
On 7 November 2017, in Brussels, the Ministers of Finance of the Baltic states and the European Commission (EC) signed a Memorandum of Understanding to create a pan-Baltic capital market.
The aim of the agreement is to attract investment by creating a common capital market combining the advantages of the three Baltic states and overcoming the constraints they often face as small countries. The three Baltic states agreed to work together on the development and implementation of the necessary tools, including the development and improvement of the legal framework, the introduction of new tools and the development of the infrastructure needed for the market.
Projects implemented in the context of the agreement:
- Harmonisation of the regulatory treatment of covered bonds: following the adoption of the Republic of Lithuania Law on Securitisation and Covered Bonds on 30 June 2022, which was aligned with the analogous Latvian and Estonian regulation, the development of a common framework for covered bonds in the Baltic states was completed;
- Regional commercial paper market: on 4 November 2020, the central banks of the Baltic states and the EBRD signed a Memorandum of Understanding (MoU) by which they agreed to cooperate on the development of a stronger and more efficient regional commercial paper market;
- MSCI Baltic index: in August 2023, MSCI Baltic Index was assigned to the Baltic markets by the international index compiler MSCI;
- Baltic Capital Market Accelerator Fund (increasing access to finance for SMEs): in 2020, the Ministry of Finance, together with the Ministries of Finance of Latvia and Estonia and the EBRD, launched the Regional Capital Markets Development Accelerator Fund. Its objective is to invest in small and medium-sized enterprises (SMEs) and mid-cap companies listed on the stock exchange;
- Harmonization of the regulatory environment. The Baltic states have agreed on the harmonisation of national public offering requirements, which will create a level playing field for Baltic companies to offer securities to the public.
Last updated: 01-08-2025
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