Government approves €600 million defense funding package

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Mistral surface-to-air missile being fired in Rutja.
Mistral surface-to-air missile being fired in Rutja. Source: Ministry of Defense

Talks between the ruling Reform Party and Center Party have culminated in a €600 million defense and internal security funding package that includes initial development of medium-range air defense, which capacity should be created by 2025 at the latest.

Estonia will have medium-range air defense capacity by 2025 at the latest, with the cost estimate at €350 million. The Ministry of Defense has been tasked with drawing up a detailed tender plan by July at the latest, Center Party whip Jaanus Karilaid said, adding that dealing directly with another state cannot be ruled out should it lead to faster deliveries.

"Medium-range air defense is a crucial element of civil protection, looking at the inhumane way the Putin regime wages war. Air defense 'bubbles' will help secure the mobilization of Estonian Defense Forces (EDF) reserve units and the arrival of allied reinforcements at ports and airports," he said.

Estonia needs to prioritize developing independent and broad-based national defense. The war in Ukraine has shown what types of arms are the most effective, Karilaid suggested.

The cabinet on Thursday approved an additional defense spending package that includes development of short-range air defense, procuring additional anti-tank weapons, boosting indirect fire capacity, improved situational awareness and infrastructure for hosting more allied troops," Reform Party whip Mart Võrklaev said.

He added that the package includes the agreement to develop medium-range air defense by 2025 at the latest.

"We primarily hope to do it in cooperation with allies, with the exact time frame and sums to be reviewed in the state budget strategy. We should know more in terms of how much of it we can do with allies by then," he said.

The package comes on top of €380 million in defense spending the government signed off on in January. "No necessary decision will go unmade on the path to national security," Võrklaev said.

"What have today is a principled decision that these processes will be launched, while relevant expenses will be made in the coming years," the Reform MP said, adding that much of it will likely be covered using loan money.

"We have added sums for strengthening broad-based national defense to the budgets of the defense and internal affairs ministries," Minister of Public Administration Jaak Aab said, stepping in for the PM.

Spending on defense will grow by €476.8 million this year and over the next three. The Ministry of Internal Affairs was allocated €86 million part of which will be used for internal security activities associated with the Ukraine war. The sums will be used to pay for the processing of temporary protection applications and partially restoring border control between Estonia and Latvia.

Aab added that he hopes the Ministry of Defense will be able to put forward a tender and investments plan for medium-range air defense in four months. "There are no exact sums here as we need to develop this capacity in cooperation with allies, " he offered.

Finnish NASAMS battery on exercise in Estonia. Source: ERR

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Editor: Marcus Turovski

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