The aim is to enhance the competitiveness of the defense sector, which in turn should serve to stimulate the economy.

Prime Minister Michal said developing the defense industry represents one of the government's priorities.

This will help to ensure Estonia's security and to promote entrepreneurship, bringing new momentum to the economy.

He said: "The defense industry is a crucial part of national defense and security, as well as of the economy. On forming this government, we agreed on specific steps to make sure that the defense industry benefits not only our defense capabilities, but also our economy."

"We aim to create better conditions in order to boost the turnover of the defense industry and support cooperation between Estonian and Ukrainian firms, including in the reconstruction of Ukraine," the prime minister continued, via a press release.

"The state plans to accelerate the development of the defense industrial park, to provide suitable conditions for product development. We also aim to increase the volume of support for the defense industry, and to establish a special commission to address developments in the field," the prime minister added.

The meeting agreed on the next steps, including specific tasks and formats for moving forward with the collaboration.

According to Taavi Veskimägi, board chair at the Estonian Defence and Aerospace Industry Association, the new government's coalition agreement sends out a long-awaited signal that Estonia's defense capability cannot be discussed without involving the local defense industry.

Veskimägi said: "This is a strong start, but to advance Estonia's defense industry, it is important to elevate this principle to the National Defense Act, linking local industry with the development of national defense capabilities and involving us in the defense needs planning process."

Veskimägi said that Estonia's defense industry has grown over the past 15 years to a level where ten its firms produce various solutions which help Ukraine resist Russian aggression on a daily basis.

He said: "This demonstrates that we can develop world-class technologies and tools for our own country and our defense forces, create high-value-added new jobs, significantly increase export turnover, and ultimately stimulate Estonia's economy."

He added that defense industry companies require certainty and long-term state partnership in order to promote this further.

Under the leadership of the Ministry of Defense, the entire defense industry policy is being updated.

Via state support, a defense industrial park is planned for Ämari, home of a NATO air base and where ammunition production could start as early as next year.

This spring, the government approved the creation of a defense industry fund to a total volume of €50 million.

The fund will invest directly and via private funds in companies developing defense or dual-use technologies.

Thanks to the fund's support, Estonian defense industry companies will get the opportunity to develop and bring innovative products to market. The fund is perpetual, while returning funds will be reinvested.

Founded in 2009, the Estonian Defence and Aerospace Industry Association represents Estonia's leading defense and security industry companies.

The association includes 142 firms as of today.

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