Latvian and German finance ministers discuss need to prioritize defense in national budgets

  • 2023-11-02
  • LETA/TBT Staff

RIGA - On Thursday, Latvian Finance Minister Arvils Aseradens (New Unity) met with German Finance Minister Christian Lindner, during which the two sides discussed the need to restructure national budgets, prioritizing the strengthening of national defense.

The Latvian Finance Minister said that it was essential to bring the national deficit below 3 percent of gross domestic product (GDP). "It is important that fiscal rules allow for an increase in defense funding and that there are clear numerical frameworks to ensure a deficit management system in Europe," said Aseradens.

At the same time, Aseradens said that as a country on NATO's eastern flank, it was important for Latvia to discuss support for Ukraine. The Minister also stressed that Latvia was one of the countries that had supported Ukraine from day one. During the meeting, the ministers discussed how to continue supporting Ukraine with international partners.

Lindner pointed out that Latvia and Germany are on Ukraine's side. "We are trying to support Ukraine and we understand that Putin must not achieve his war objectives," Lindner said.

The ministers also discussed economic governance reform, and Aseradens pointed out that Latvia is also a fiscally responsible country, which has a relatively small budget deficit and a small and well-managed public debt. "We have always looked at everything with caution, so that the situation remains stable," he said.

At the same time, the ministers discussed common current issues in the European Council, including what to expect with fiscal regulations in the future.

"The new fiscal rules must be realistic, but also achieve sound public finances in Europe and reduce debt," Lindner said.

The German finance minister admitted that it is necessary to be prepared for future crises as well, and countries should accumulate financial fiscal reserves.