At the end of March, a scandal stirred up Estonia: Politico wrote that the country was updating its weapons at the expense of the European Union, and giving the old ones to Ukraine.
The scheme itself is simple: European countries have agreed to support the attacked Ukraine, including by supplying it with badly needed weapons. Countries make a contribution to the European Peace Facility (EPF) depending on the size of their economy, and then from this fund they can receive partial compensation (84%) for the costs incurred.
Each country calculates the cost of spending differently. Politico sources claim that six countries, including Estonia, did not proceed from the real cost of weapons sent to Ukraine but from the cost of new weapons. Estonia topped the list in absolute terms, saying it sent 160 million euros worth of weapons to Ukraine, of which 134 million were compensated.
Such actions caused discontent among European diplomats, who were outraged that in this way Estonia not only upgrades its arsenal but also looks like the most generous supplier. One of them claimed that Estonia had sent Strelas (Soviet-era surface-to-air missiles) to Ukraine but asked for money like for Stingers.
Estonia: «we did not supply rubbish»
In Estonia, the Politico story caused a storm of emotions at the highest level. Prime Minister Kaja Kallas called the allegations groundless, suggesting that Estonia was simply too active. "In five weeks, we pushed through the joint purchase of missiles. I know some people don't like it when small countries dictate the rules. It is not surprising that they are looking for something where they can put us in our place," Kallas commented.
The Commander of the Defense Forces, Martin Herem, even threatened to sue anyone who dared claim that Estonia sent old trash to Ukraine. "Estonia has never had Strelas or Iglas, and we have never gotten any Stingers; this is a stupid article," he said.
"There were no Strelas in service with Estonia, and this is proof that this is slander. The fact that Estonia supplied Javelins to Ukraine before the start of the war is also not mentioned. According to Politico and the quoted diplomats, is it scrap metal?” — the Estonian MEP Riho Terras was also indignant.
Terras said on social media that the Politico article gave the impression of an information operation, the timing of which is very strange. The MEP noted that the article was published at a time when a joint purchase of a million shells for Ukraine is planned.
"If you look at the list of countries that are accused of misusing the peace fund, you will see Finland, Estonia, Latvia, and Lithuania. These are the border countries of the European Union (and NATO), which have been among the biggest supporters of Ukraine and which, based on their geographical position, best understand the threat from Russia," said Riho Terras.
Jaak Madison, an MEP from the ultra-conservative EKRE party, even stated on the social network that Politico is far from being a neutral analytical publication, but an agent of influence whose activities are beneficial to the Kremlin.
"Obviously this is a malicious ploy, Politico is spreading lies and trying to drive a wedge between allies to slow down support for Ukraine," Defense Ministry Vice Chancellor Kusti Salm told Estonian National Broadcasting. According to him, the logic is that replacing these weapons or buying new ones for Ukraine would cost exactly this amount: "Everything is done according to the rules, and these numbers are so big for Estonia because we sent colossal amounts of aid.”
Salm noted that Estonia was one of the first countries to send Ukraine more than 40,000 anti-tank mines, 100 Javelins, 35,000 automatic rifles, and tens of millions of rounds of ammunition, even before the creation of the European Peace Fund.
Was Estonia a victim of its own self-righteousness?
Not all Estonians were defensive about the allegations. MEP Marina Kaljurand pointed out that the amounts of the requested compensation are so different from other countries that this was bound to raise questions and Estonia should have answered in time. In her opinion, the sluggishness of the reaction caused some damage to the reputation of the Estonian state, but not too significant.
MEP Yana Toom also stood up for Politico, noting on social media that the thesis that Estonia is rearming at the expense of the EU is actually true, although the rules are not violated. At the same time, she saw the reason for European dissatisfaction in the fact that European diplomats were tired of Estonia's constant desire to "set themselves as an example and teach all of Europe how to love their homeland."
"Everything is correct in the scheme — the rules allow, having given away weapons that have been discontinued, to request so much money from the fund to replace them, as if they had given away a new one," Yana Toom told Veridica. At the same time, in her opinion, the scandal is not artificial: it arose not so much because Estonia asked for the most and was going to get more — it was planned to submit applications for 84% of the 400 million, and not for 160 million. The problem arose because Estonia, according to her, behaved quite arrogantly.
According to the member of the European Parliament, this means that irritation has been accumulating for a long time, became Brussels folklore, and eventually got into the media. "So the reasons for the scandal are not a violation of the rules at all, but something worse: ingratitude and arrogance. If, while doing all the same things, we behaved more modestly and did not promote ourselves at the expense of the fund, there would be no scandal. The contribution of Germany is immeasurably greater than ours. And no, I do not think that this is the normal behavior of European officials. Officials do their jobs quietly. This, excuse me, is dizziness from success, and it happened not to officials but to politicians," Toom states.
At the same time, in her opinion, this does not mean that Estonia does little to help Ukraine by supplying it with scrap metal. "Estonia is really doing a lot and very quickly. Both militarily and humanitarianly. And in this regard, there is a broad political consensus in the country — almost all parties, with perhaps one exception, are in favor of continuing in the same spirit. The only thing that went wrong was our self-promotion," says Toom.
However, there are already voices in the EU warning that if all the countries financing the purchase of weapons for Ukraine demand compensation in the same proportion, there will soon be no money left in the fund. Due to this, MEPs from the S&D, Renew, and the Greens are urging the EU to impose standard rules for how much countries can claim from the EPF.
Estonia badly needs to upgrade its army but the funds are scarce
At the same time, the problem of rearmament for Estonia is extremely acute: its military potential is incomparable with that of Germany or France countries that have the further advantages of not bordering the aggressor and were spared of the experience of being Russia’s subject. Not surprisingly, Estonia plans to continue rearming: last year it was decided to increase defense spending by a billion euros, which is planned to be spent in the next couple of years, more than 400 million euros per year to be exact.
Another thing is that there is a catastrophic lack of money in the Estonian state budget. There is no budgetary coverage for such expenses. According to the new economic forecast of the Ministry of Finance published at the beginning of April, in four years the debt of the Estonian public sector will double and amount to 13.4 billion euros, i.e., 30 percent of GDP.
Already this year, the budget deficit will amount to 1.7 billion euros — gigantic figures for a country that has always stood out for its budgetary discipline. Clearly, the new government will have to raise taxes and cut other spending, as it has already warned. The impressive growth rates of the budget deficit were in no small measure caused by the defense spending. The coalition agreement concluded in early April provides for its increase to 3% of GDP, to which will be added the costs associated with hosting allied forces on Estonian soil. In order to cover the budget shortfall, both the personal income tax and the turnover tax will be increased starting next year.
Basically, the Estonian government is going to spend these funds on creating a multi-level air defense system (including protection against drones), strengthening ground forces, increasing indirect fire protection capability, and increasing ammunition stocks. There is no doubt that in the current budgetary conditions, Estonia will look for any opportunity to somehow compensate for the costs, not at the expense of its own citizens.
It is not difficult to assume that this will not meet with approval everywhere. Moreover, in the coalition agreement, the government parties promise to demand an increase in defense spending up to 2.5% throughout NATO, a proposal that would likely be frowned upon by some members of the Alliance, especially those that, unlike the Baltic countries, do not feel a direct military threat.
As for Ukraine, Estonia is going to continue to support it at the economic, political, and military levels. That includes support for Kyiv’s aspirations for NATO and the European Union. It is very likely that such active lobbying of Ukraine's interests by Estonian diplomats will force the Ukrainian authorities to turn a blind eye to the fact that some countries are helping it not without benefit for themselves.