Over the weekend, Minister of Finance Arvils Ašeradens participated in the Eurogroup and the Economic and Financial Affairs Council (ECOFIN) meetings of the European Union, held in Warsaw, Poland. The meetings focused on strengthening European defense, economic development, financial market competitiveness, and current geopolitical challenges.
One of the key topics at the ECOFIN meeting was the European Commission’s White Paper on the Future of European Defence, published in March of this year, along with the ReArm Europe plan. These include proposals to activate national escape clauses and establish a new EU instrument — SAFE (Security Action for Europe) — aimed at developing defense capabilities. These measures would allow EU member states to receive loans for defense investments.
“Defense funding must be European priority. We plan to significantly increase defense spending — our goal is to reach 5% of GDP,” emphasized Minister Ašeradens. “Unfortunately, the geopolitical situation cannot be compared to the COVID pandemic — it will not end soon. Therefore, we must think about how to protect Europe while also ensuring fiscal sustainability.”
The minister noted that Latvia intends to use all available financial resources, including activation of the national escape clause, loans from the SAFE instrument, budget reallocations, and other additional sources of funding.
Ašeradens welcomed the idea of creating a European Defense Mechanism, which could act as a holder of strategic capabilities, reduce pressure on member states’ debt levels, and strengthen Europe’s strategic autonomy.
During the meeting, it was emphasized that the EU’s defense industry plays a crucial role in ensuring Europe’s ability to respond to external threats, while also fostering innovation and boosting economic growth potential. The proposals in the White Paper aim to strengthen EU security, contribute to peace in Europe, and provide long-term support for Ukraine.
In addition, other current issues were discussed, including transatlantic trade relations and recent U.S. trade policy decisions, particularly import tariffs that could impact the EU's economic environment.
