07-12-2023

Vice-Minister of Finance M. Liutvinskas: "It is necessary to make faster progress in the negotiations on the use of frozen russian assets for Ukraine's needs"

On 7-8 December, Vice-Minister of Finance Mindaugas Liutvinskas will participate in the meetings of the Eurogroup (EG) and the Council of Finance Ministers of the European Union (EU) (ECOFIN) in Brussels, which will focus on the economic and financial situation of Ukraine and the review of EU fiscal rules. The 2024 draft budgetary plans of the euro area member states will also be discussed.

At the ECOFIN meeting, the ministers will exchange views on the economic and financial impact of russia's aggression against Ukraine. Recently, discussions at the EU level have focused on the need to ensure sufficient and continuous provision of EU financial support to Ukraine after 2023 and to take steps towards the use of frozen Russian assets for Ukraine's needs.

"It is necessary to ensure sufficient further EU financial support for Ukraine. For this, an agreement on EUR 50 billion financial instrument, which would cover the period of 2024-2027, should be reached in the near future. We also should be courageous to move forward with the decisions that would allow us to channel frozen russian assets to Ukraine's needs. The "contingent contribution" model, where the profits from the frozen russian assets of the EU financial institutions would be channelled to the needs of Ukraine, would be a good first step in mobilizing funds for the reconstruction of the country, which should be followed by other decisions that allow the use of the assets frozen due to sanctions," said M. Lutvinskas.

At the ECOFIN meeting, the discussions will be also held in order to reach a consensus on the review of the EU's economic governance (fiscal rules). The remaining critical open questions include aspects such as debt and deficit-reductionsafeguards, fiscal space for investment and reforms, and proper enforcement. In the negotiations, Lithuania consistently raises the provision that the updated EU fiscal rules must provide for certain flexibility for countries' investments in strengthening defence capabilities.

At the ECOFIN, there will be a discussion on the approval of the updated Economic Recovery and Resilience Facility (RRF) plans of 12 countries – Belgium, Latvia, Romania, Bulgaria, Cyprus, Poland, Germany, Greece, Finland, Croatia, Italy, and Ireland – based on a positive assessment by the EC.

The meeting will also present progress reports on the introduction of the new EU own resources and the Single Currency Package, which includes a legal proposal for the digital euro as legal tender.

At the EG meeting, there will be an exchange of opinions on the assessments of the 2024 draft budgetary plans of the euro area countries presented by the EC on 21 November this year, and the joint statement of the euro area ministers on this issue will be approved. According to the EC assessment, Lithuania's 2024 draft budgetary plan is in line with the Council's fiscal recommendation.

Also, the EG meeting will continue discussions on the deepening of the Capital Markets Union in order to outline the strategic direction and priorities for the next EU institutional cycle.

Moreover, at the meeting, the EC will present the recommendations on the economic policy of the euro area in 2024-2025.