ECB prepares for potential Russian military aggression, calling for increased cash reserves and resilient payment systems. In an interview with Reuters, Gediminas Simkus, a member of the ECB Governing Council and governor of the Bank of Lithuania, said the Central Bank must be ready for new shocks, including a possible Russian attack on the eastern border of the European Union. He noted that the ECB has successfully met its inflation target last year despite high food prices, US tariff uncertainty, Chinese dumping and the Ukraine war. Simkus stressed that a heightened military risk would create a scramble for cash, so the ECB must maintain sufficient liquidity and flexible monetary policy. He added that the next policy meeting on 4 February will likely leave rates unchanged, as inflation remains near the 2 % target, but that the ECB must monitor broader economic trends for any shift. The governor also highlighted the need for banks to prepare for climate change risks. The ECB’s stance reflects a broader concern among Baltic states-Lithuania, Estonia, Latvia-that Russia could pose a military threat through cyber‑attacks, disinformation and drone or aircraft incursions.

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