Rimantas Šadžius: NIB needed as a financier for a strong region

The finance minister of Lithuania, Rimantas Šadžius, says that the Nordic Investment Bank is “in just the right place” as a financier to build a strong Nordic-Baltic region. The main task of the Bank is to fill gaps in the financial markets. He encourages NIB to intensify its lending to the SME sector, which has limited access to financing at the moment.

How do you see the economic outlook for the Nordic-Baltic countries?

“One characteristic of this region is that all eight countries are export-driven. Therefore, economic health depends much on developments outside the region, to what extent others are able to buy our goods and services.

Having said that, the countries in the region are in quite different economic situations. The Baltic countries have suffered most from the financial crisis. All three entered a deep recession, but they have also recovered quickly. In the Nordic countries, the growth rates may not have been so impressive, but they have weathered the crisis better.

I believe that the economy of the region is sound.”

What do the owner countries expect from NIB?

“The Nordic Investment Bank is a very important regional financial institution. It is owned by the states, which means that in essence it is a public bank. Its main mission should be to fill the gaps when the private sector fails. NIB can, for example, provide long-term financing for infrastructure projects that cannot easily attract private investment.

In Lithuania, we have quite a large flow of structural assistance funds from the EU for different projects. To implement them efficiently, we need international financial institutions. NIB is mainly active within the fields of environment, energy, communications and innovation.”

Do you have any new ideas how to make NIB’s services even more relevant?

“One area where NIB could do more is in financing small and medium-sized enterprises (SMEs). NIB would first lend to financial intermediaries, who would then disburse financial resources to SMEs. This is an area where financing really is needed and financial engineering can give very good results.”

The Baltic countries and Lithuania have gone through tough fiscal reforms. What lessons have been learned?

“There were moments during the crisis where it was inevitable that fiscal discipline would have to be set as the key priority. We had elections late last year, in which society expressed its preferences for future policies. As a result, we will place more emphasis on growth and jobs. Unemployment is one of our most difficult problems. While doing so, we will continue to follow sound fiscal policies. This is a necessary precondition for stable economic development.”

What place does the Nordic-Baltic region have in Lithuania’s international cooperation?

“Nordic-Baltic co-operation is a very important thing for Lithuania. This has been the case for a very long time. Even during Soviet times, the Nordic countries were a good example for us to follow. In those countries, it seemed to be possible to combine sound economies with a welfare state. Of course, even the Nordic countries have suffered from the crisis, but they have demonstrated how societies can cope with crises and how they can be prevented.

All in all, the Nordic-Baltic countries together may form a very strong region in the world economy. For that to happen, we need common financial institutions. The Nordic Investment Bank is in just the right place to play this crucial role.”

What are the priorities for Lithuania’s EU Presidency?

Lithuania will be an honest broker for good initiatives which are beneficial for all member states. It is a complicated task, but it can be done. The main priorities are in the financial area: banking union, combating tax evasion and building genuine economic and monetary union.”

Mr Šadžius chaired the meeting of the Board of Governors, the highest decision-making body of the Nordic Investment Bank, held on 30 April 2013 in Vilnius, Lithuania, see the press release.