Since you have expressed so many concerning messages over the past year, what positives can you take away from this year, aside from being named European of the Year?

Over the past year, I have been able to apply myself in the field of defense, contributing to the development of Estonia's national defense and, in recent months, advancing Estonia's defense industry. I believe it has been a very busy and meaningful year for me.

On June 12, you announced that you were stepping down as permanent secretary of the Ministry of Defense. I'll quote from your interview with Delfi: "The reason is that, since the 2023 Riigikogu elections, Estonia's government policymakers have no longer made the necessary decisions related to national defense." I read all your interviews from that time. You didn't just repeat the same ideas, but even the same sentences. When did you start jotting those sentences down in your notebook?

When I think about my work at the Ministry of Defense – and we recently discussed this with the former commander of the Defense Forces [Gen. Martin Herem] – we had a unique historical opportunity to work during such a transformative time, to be at the forefront of global changes and to contribute significantly. It was very inspiring. However, one thought that never left my mind –and I know it didn't leave the commander's mind either – was that we were always doing too little and too late. That was a very oppressive and paralyzing thought. The weight of such responsibility made the job particularly challenging. You're there, you're working, you see, you know the solutions, and yet it's impossible to implement even the bare minimum in the way it should be done. I think those concerns started to take shape around the time we first began discussing the additional need for ammunition. From there, it just built up. I am glad, though, that some things have improved now.

You centered your departure from the Ministry of Defense around the message that Estonia needs additional ammunition worth at least €1.6 billion. Everyone I've spoken to describes you as a very goal-oriented person. You have a plan; you don't act impulsively. Even back then, I wondered: how did you believe that the resignation of one permanent secretary, along with a few interviews, would push politicians to decide to find those €1.6 billion?

That was something we were unable to achieve, even though we increasingly spoke louder about these sensitive issues, both behind closed doors and eventually quite publicly. If I try to rationalize it now, I'd say that if I had known or had the skills to approach it differently, I would have done so. That was the entire strategy: to draw attention to the issue. And to ensure it wasn't just empty rhetoric, I had to put my own cards on the table as well.

At other political moments, such an issue would have been noted, likely received about a week of attention and then life would have moved on. Yet, you managed to hit a political nerve.

Looking back, you can rationalize all kinds of things. I refuse to believe that any decisions were made based on a single interview. The political demand, the need and the willingness of the Estonian people to accept such expenditures and burdens have always been present, and I think that made it much easier for the new government and the prime minister to make that decision. I am fully convinced that neither the prime minister nor the other coalition partners based their considerations on what I specifically said but rather on what they deemed politically advantageous at that moment. And I believe it was the right step to take in every way.

If the government hadn't changed, would the decision still have been made?

You frame it as though it were some sort of extortion. For me, it was more of a reflection – an acknowledgment that I hadn't succeeded in achieving what I considered important.

So, was it more of a protest than a plan?

I had already submitted my resignation weeks prior. It was more about explaining my own decisions, I think. I didn't have any political agenda behind it.

Defense Minister Hanno Pevkur [Reform] recently told Delfi that he hasn't spoken with you since August.

Now that I think about it, it's true – I haven't had the opportunity to meet with the defense minister since then.

He said in an interview to Delfi that if you had mentioned in even one meeting before your resignation that you would leave if the €1.6 billion didn't materialize, it would have made things much easier for him. How many people did you end up falling out with over this?

Demanding things be done my way or else might have worked in second or third grade, maybe. I doubt it would have been in any way professional or reasonable for an adult to act like that in a work environment. I would say I haven't fallen out with anyone. I acknowledge that some people may have been upset about it, but I comfort myself with the thought that we live in times that require difficult decisions, and we need to rise above individual feelings.

In early autumn, the government decided that between 2025 and 2031, the state would spend an additional €1.6 billion on ammunition. EDF Commander Gen. Andrus Merilo recently mentioned that the military advice was somewhat different, but he is satisfied with the compromise because it allows the Defense Forces to start planning. Are you satisfied?

Well, a decision is a decision. A decision is better than no decision at all. And as far as I know, this decision includes the possibility to enter into contracts over the next four years for that amount and to carry out those procurements. This means the funds are available and can be directed where the commander of the Defense Forces deems necessary. Of course, there are supply issues in the defense market, innovation is ongoing and we need to show creativity and take risks. The longer we delay, the more we diminish the sense of urgency ourselves.

Has anyone developed or come up with a way to deliver the same amount of explosives as ATACMS does to a distance of 300 kilometers, but at a significantly lower cost?

If you follow the news from Ukraine, there are many such solutions, though most are drone-based rather than ballistic. ATACMS is much faster, which makes it quite accurate. The faster it is, the harder it is to intercept. There are plenty of drone-based solutions and they are all significantly cheaper. I think one of the developments the Russian Federation has introduced to warfare – and which the Ukrainians have also adopted – will heavily influence the future of warfare. Namely, the number of airborne threats will increase hundreds or even thousands of times compared to what it was before the war in Ukraine.

Is the era of €1.5 million missiles coming to an end?

I think the way Russia has chosen to wage war against the West makes a lot of sense from their perspective. If you see that your opponent has high technology that surpasses you in every category and aspect, and you lack both the knowledge and the willingness to compete with it technologically, the only way to overcome it is with sheer mass. This isn't some new revelation they've had in the 21st century; it's a strategy Russia has essentially employed throughout its military history.

What has now happened, though, is that the West is running short of this high technology. This shortage exists because production is very limited and much of it has been supplied to Ukraine. This means that, despite the technology being of very high quality, it's difficult to counter such mass simply because of the sheer volume involved.

What will influence the future of warfare is something called "affordable mass," and I think Estonia should increasingly consider this concept. This is precisely what we are focusing on in Frankenburg today.

When we look at what the Dutch prime minister said after the JEF (Joint Expeditionary Force) meeting in Tallinn – that before talking about 2.5 percent [of GDP on defense spending], we should discuss how we are spending today's money – it leaves me feeling there's not enough urgency. However, there is some truth to it in the sense that if you enter procurement for many things today, deliveries might not arrive for six or seven years. That's not the most effective way to spend money if we want to address a military threat that could confront us much sooner than six or seven years.

In other words, things need to become cheaper and weapons need to start being produced in significantly larger quantities. That's the only way the defense industry can effectively counter the threat.

How can prices be reduced?

What characterizes Western defense industries today is that their weapons are very good and technologically advanced. They are designed to function in all weather conditions and operational environments – from plus 40 degrees in desert heat to minus 30 degrees in our latitudes. Maybe not all of these conditions are necessary. How often do we even experience minus 30 degrees? Perhaps three or four days a year, which is about 1 percent of the time. Maybe that's a risk we can accept if it allows us to make those weapons half as expensive.

I remember a chart. We procured spare parts for artillery and there were items like €100 wrenches. In other words, if something is military-grade, its price is tenfold. Did you encounter this as the head of the Defense Investment Center?

What has happened in the defense market over the past 30 years? After the end of the Cold War, there was a shift towards disarmament, with increasingly less investment in defense. When less money flows into the market, the market starts to shrink. Business models began to change. Previously, revenue was generated by selling armored vehicles, weapons, artillery or other equipment, and the entire lifecycle support was just a side cost that manufacturers had to provide. But now, since hardly any artillery has been purchased for about 30 years...

Take, for example, the famous German Panzerhaubitze self-propelled howitzers. For a period of 15 years before the war, not a single unit was sold, even though the company had to keep itself alive somehow. So, they started charging more for maintenance, spare parts and came up with various rules – like only parts produced by their company could be used or warranties would be void otherwise. This led to a situation where systems became incompatible with each other. When production volumes are very low, prices are driven even higher.

In the U.S., there is a model called "cost-plus pricing" where new capabilities are developed based on a company's proposal estimating development costs. A margin is then added on top and the project begins. This approach removes any incentive to be entrepreneurial or to do things cheaper and faster. The interest lies in making the project as long and as complex as possible to maximize earnings, as every dollar or euro spent comes with an attached margin. This has resulted in overly expensive systems, incompatibility between equipment and, in turn, very limited production volumes with long delivery times.

It's no secret today that during these 1,000 days of war, defense production in the West hasn't significantly increased. Much of it has been postponed. Companies have opted for contracts at double the price, ensuring deliveries by, say, 2032, instead of building three new factories and focusing on selling as much as possible now.

From the company's perspective, the thought process is often, "If I can't be sure they'll still be buying from us in three years, why should I invest now?" When we take a somewhat patronizing view, saying, "Don't you see that there's a war in Ukraine and the security situation is deteriorating?" we miss the point. A company thinks, "If I sell artillery but there aren't new battalions to buy it, then who am I selling to?" And if it looks like there won't be new buyers in the future, they won't make the necessary investments either.

Ultimately, it all boils down to this: if countries don't start investing more in defense, including increasing the size of their armed forces, there's no reason to expect the arms market to grow or adjust to meet those needs.

In mid-December, Tallinn hosted the Joint Expeditionary Force (JEF) summit. Estonia aimed for the leaders of 10 countries to commit to raising defense budgets to 2.5 percent of GDP by the end of the meeting. However, several leaders did not receive a mandate from their capitals to make that commitment. Were you surprised?

This debate has two sides. If I think about what our prime minister might have been considering in that situation, he could have proposed a new goal of 3, 4 or even 5 percent of GDP, simply based on what would be appropriate given the security situation. However, reaching international agreements isn't about who can elevate themselves to the highest pedestal; it's about what can realistically be agreed upon.

As we've seen, even negotiations around 2.5 percent are already quite difficult, and the prime minister must invest their political capital to achieve such an agreement. Fortunately, there wasn't a legitimate expectation that this commitment would be formally adopted at the JEF summit. However, at next year's Hague summit, there will need to be a visible step toward increased defense spending. I don't think there is a single security analyst in the world who believes that former President Trump, should he return, wouldn't come forward with some demand for Europe to start dramatically increasing its financial contributions.

Do you know what might be Trump's silver bullet solution? I've tried to figure it out. During Trump's previous term, Spain increased its defense spending from 0.9 percent to 1 percent – hardly a significant leap. What does he have this time around?

President Trump's greatest weapon is unpredictability. When proposals or political moves come from an angle that's least expected, it often creates just the right amount of irritation to mobilize political will. He'll likely find that pressure point again.

But still, how to get the Italian taxpayer to open their purse strings?

I'm not particularly familiar with the specifics of the Italian case. However, in Estonia, we also need to think increasingly about how we approach these problems in the first instance. The reality is that defense spending ultimately reflects political perceptions, and NATO is, after all, a political organization composed of politicians elected by the people. The fact that defense expenditures are lower in some countries and higher in others reflects how the threat is perceived.

It's entirely logical that the further one is from Russia, the smaller the perceived threat. If we want everyone to start dramatically increasing their spending, our responsibility is to lead by example and do more ourselves. Otherwise, advocating for others to act will ring hollow.

How much more can we realistically do? This is a question being raised by several members of the Riigikogu National Defense Committee as well.

That is the difficult task of politicians – to make that call. For me, the most frightening perspective is the analogy of being hit by a car on a pedestrian crossing. Yes, you had the right of way, but afterward, you're the one sitting in a wheelchair. What good is your right then? Others didn't follow the rules as much as they should have.

During the U.S. presidential election, who were you rooting for? Donald Trump or Kamala Harris, the vice president to a president who said, "We will support Ukraine for as long as it takes," but never said, "as much as it takes"?

I had both a blue Kamala Harris cap and a red Donald Trump cap at home. I would have been equally pleased with either winning.

One has to be a pragmatist in international relations.

In the end, we play with all the cards we're dealt. There's no point in dwelling on who the leaders of our allied countries are – we get along with everyone. And I think, in terms of values, there isn't such a big difference either, at least when it comes to supporting the broader value system based on freedom.

Since September, you've been the CEO of the defense industry company Frankenburg. How does this position differ from your previous role?

As permanent secretary of the Ministry of Defense, I held a strategic-level leadership position where over 5,000 people worked under the ministry's jurisdiction daily. When you factor in the entire reserve force and all associated personnel, nearly 50,000 people were directly or indirectly connected to our work. This meant that daily tasks and decisions operated at a somewhat "cloud level" compared to what I often face today, which is building a small company from the ground up.

What do your workdays look like?

My workdays used to be long and they still stretch quite long now. However, I don't think they differ much from anyone else's workdays. There are many phone calls, video calls and meetings. Some things go well, while other things don't progress as quickly as you'd like. Ultimately, we now have a team in the company that is incredibly motivated, eager to contribute to national defense through the development of our products and, in doing so, help deter Russia and stand up for our freedom. That is both inspiring and motivating for people. For me, I'm inspired by working alongside people who want to make things better.

How do you assemble your team? Do you shape it based on your own vision or perspective?

Well, every leader ultimately shapes their team based on their own vision. However, developing missile systems and running the Ministry of Defense don't have many overlapping roles, unfortunately. There wasn't a rocket science department at the Ministry of Defense, after all. Talent exists all over the world, and it's our job to find it. With our company's mission and enthusiasm for what we do, we've been quite successful in the recruitment market. We've managed to attract very talented people from around the globe.

How many hours or days passed after June 12 before you received your first phone call saying, "Come work with us"?

The first phone calls came within hours. And they kept coming from time to time.

Did all the calls come from companies or did another ministry also see the need for a fresh perspective?

The calls came from companies, from Estonia, from abroad and even from the public sector, but in the end, the scales tipped in favor of Frankenburg.

How many political parties reached out to you?

No political party has called me so far. But my phone number is known to everyone.

What impression do you have of politics? Is it a place where things can get done?

Life is ultimately an adventure and all sorts of interesting opportunities come along. In that sense, I certainly don't plan to close any doors for myself. I think that as a politician, minister or member of the government, you can accomplish a great deal – things that might be very difficult to achieve in some private companies. To say that politics lacks excitement or opportunities for self-fulfillment would definitely be unfair. I believe there's plenty of both in politics.

In the 2027 elections?

Maybe not in 2027 just yet.

You've spoken at length about why you joined Frankenburg. According to you, Taavi Madiberk approached you with a specific job offer only at the end of August. I'm not asking again why you chose to go there, but why did you turn others down? What could they have done differently or how could they have been better to deserve someone like Kusti Salm?

There are many reasons. At Frankenburg, in addition to Taavi Madiberk, who is one of Estonia's most outstanding young entrepreneurs, I also have the opportunity to work with General Veiko-Vello Palm and General Herem, who have been close team members of mine for years. With them, I feel we can combine our energies to achieve great things. And to be honest, it was also important to me that this move would look appropriate. Had I joined a company that already had established ties with the Ministry of Defense, no matter how correct the choice might have been, it could have looked somewhat questionable.

Frankenburg is a startup. At the time, it had no contracts, no procurements and, as far as I know, not even a single meeting with the Ministry of Defense. This gave me the opportunity to build something entirely from scratch. That is a very motivating challenge. I still consider myself a young person and this field is important to me. I see myself as competent and experienced in this area, so having the chance to apply myself here is exciting.

To summarize Frankenburg's goal and objective, you're planning to produce air-defense missiles for shooting down drones made from readily available components, for a fraction of the price of existing alternatives and in 100 times larger quantities. That's a pretty solid plan – why hasn't anyone else done it?

If we look at how the balance between air defense and air offense was structured after World War II, it was based on the principle that missiles were always significantly cheaper than the airborne targets they were designed to hit. Most people are familiar with the Stinger missile, which can cost up to half a million euros – a staggering price. But the Stinger was designed to shoot down helicopters. Even for the Russian Federation, helicopters cost around $20 million. This one-to-forty ratio made shooting down helicopters very cost-effective.

Patriot missiles, costing $4.5 million, were designed to take down fighter jets. A Su-34, for instance, costs approximately $80 million. This created a balance where both sides had roughly the same number of missiles and air attack weapons. During the Cold War, this balance was carefully maintained.

However, after the Cold War, starting in the early 1990s, disarmament began. In the West, no new armaments were produced and what was spent was spent on training. This led to a kind of "brain drain" in the development of short-range air defense missiles. Most of the technology used in missiles today was developed between the early 1970s and late 1980s. These missiles are very expensive and scaling up their production has been physically challenging.

In the second half of 2022 in Ukraine, both sides ran out of artillery ammunition, triggering significant innovation. Explosives began being attached to various aerial vehicles. By the end of 2022, these solutions were improvised, somewhat cobbled together and far less effective than traditional artillery fire. However, a market emerged, with tens of thousands of aerial vehicles being deployed each month. When a market emerges, more producers enter, volumes increase, competition grows and products improve. By 2023, Ukraine and Russia combined were deploying about 100,000 aerial vehicles monthly. This year, across all types, the figure is nearing a million per month. While this heavily skews toward the smallest category – FPV drones – it's still significant.

If we look at what drives this growth, it's the same economic calculation. Both Russia and Ukraine have an interest in continuing to produce these aerial vehicles as long as the missiles used to shoot them down are tens or even fifty times more expensive.

Still, why hasn't anyone else yet created a more affordable solution? Or is there currently a race among various companies in this field?

I'm not exactly sure why others haven't done it yet. I think it's partly due to the market logic of large companies: why create cheaper and smaller solutions when you can sell existing products at a much higher profit margin? Additionally, the innovation culture in very large companies is quite different – there's less entrepreneurial agility. In our company, for example, all our energy is focused on one product, whereas larger companies might have hundreds of products in their portfolio, which makes any innovation cycle much longer and significantly more expensive.

That said, it's not as if no one is addressing the drone threat. There are lasers, for instance, which we've all read about in the news and a lot of energy is being invested in interception drones. These are all impressive solutions and will undoubtedly see more widespread use in the future.

However, at Frankenburg, our perspective is that the long-term solution that ensures scalability will be missile-based, similar to how the entire air defense infrastructure has been missile-based since World War II. The reason for this is quite simple: missiles are precise, relatively straightforward and don't require many operators.

Speaking of innovation, you use artificial intelligence for target interception. What does that mean?

Artificial intelligence means that the computer calculates, identifies targets independently and is then able to guide the missile toward the target. One aspect is building the missiles, another is target detection. Not every country has constant air surveillance coverage, which means the intelligence embedded in missiles or drones needs to become more advanced. And if you expect this intelligence to grow, it has to be equipped with some form of advanced reasoning. Artificial intelligence is what provides that intelligence today.

Have you already seen a missile in flight?

Yes, we've seen it in flight.

Has it hit targets?

We are building the missile so that it can hit targets, and work in that direction is ongoing. I am confident that in the near future, we will be able to inform the public about it.

How far along are you with the prototype? What still needs to be developed? What's ready or nearly ready and what is the most technically challenging aspect?

That's something we prefer not to discuss in detail publicly, because it's not just the general audience listening but also people who might want to replicate it quickly or even those with hostile intentions. Generally speaking, in every language, rocket science is considered one of humanity's highest intellectual achievements. There are many complex aspects involved.

If anyone wants to understand the challenge of making a large, stick-like object fly in the correct direction, try throwing a piece of wood somewhere and see how well it flies precisely where you want it to go. Getting something like that to fly properly is, as a whole, incredibly complex. But we have a very talented team and one that can make it happen.

You've raised funds quite quickly. The company's valuation was recently €50 million. I understand that with the British joining in, the valuation will increase significantly. What is the money being spent on?

That's how business works – investors put their money in, take risks and make significant expenditures upfront with the aim of earning it back later on a larger scale. Currently, our expenses are primarily focused on labor and prototyping.

In recent months, I've heard that production will soon start in Ukraine, then that it will start in Latvia and now you've signed a significant agreement with the British. I read that the company is investing €50 million in the U.K. It seems like production will begin in the U.K. So, where will the first factory be located?

I can confirm today that we will begin production. As for the exact details, we'd prefer to let the factories speak for themselves.

When?

The company's goal is to move as quickly as possible. We're not aiming to create the world's best missile; we're aiming to produce a missile that can be sent to the battlefield in Ukraine as quickly as possible. Again, I believe our actions will speak for themselves and we will announce it when the time is right.

But you will be testing the missile in Ukraine?

No company working in the defense sector can speak credibly about its mission or work if it's not present in Ukraine. We are no different. Where else would we test our missiles if not in Ukraine, where they are needed the most?

How much will the missile cost?

What we can say today is that the missile will be tens of times cheaper compared to current solutions.

Compared to what?

Other short-range missiles.

Could the missile cost around €50,000 per unit? €20,000 per unit? That would already be significantly cheaper than a Shahed drone but certainly not cheaper than smaller drones.

Initially, we need to focus on taking down the more complex threats like the Shahed, Lancet or Orlan drones, as they operate with longer ranges. Considering that the Shahed is a weapon with a range of 2,500 kilometers and observing how Russia uses them in Ukraine, it would be naive to think that this weapon was developed solely for use in Ukraine. Especially since their launch platforms have so far been positioned no more than 100 kilometers from the front lines. This is the threat closest to us and the one we need to address first.

Donald Trump's chosen special envoy for Ukraine and Russia, Keith Kellogg, said just a day before our interview that, in his opinion, both Kyiv and Moscow are ready for peace negotiations, as both are exhausted and now need a mediator to "divorce" them. This is quite a cautionary message – that he does not see the United States as the one to bring Russia to its knees, but rather as an arbiter. What do you think will happen after January 20th? When listening to European leaders, their messages about unity seem very far apart.

I've been reading international newspapers with great concern in recent weeks and months. It reminds me of Ostap Bender's idea that if you intend to rob someone of all their money, you have to start getting them accustomed to the idea early. This talk about peace feels somewhat similar. At first, it was discussed in negative terms, then in a conditional sense and now it suddenly appears in texts in all sorts of forms. People speak about it without any hesitation.

Of course, everyone ultimately wants peace – the question is whether peace comes on terms where Ukraine wins, or at least appears to win, or if it looks like Russia wins. If we were to draw a line today, I don't think anyone could convince a single Ukrainian that they have won this war. And I suspect there are very few people in Estonia who believe Ukraine would win under such circumstances.

This is the outcome that all Estonian leaders, military officials and defense experts have most strongly warned against: if Russia walks away from this knowing that, despite paying a very high price in terms of human lives, the economy and more, attacking other countries, occupying them, killing and raping their people, ultimately brings political gains, then we all know what happens next.

This is why this moment is critical. If such messages come from the United States, Europe must take them as a signal to take a deep breath and pull itself together. Europe needs to take a leading role in ensuring Ukraine emerges from this war victorious. If Ukraine loses this war, it will mark a turning point in world history – and not for the better.

Do you think Europe will take that deep breath and step up?

It often seems to work out that the final, reasonable solution is reached only after all other options have been exhausted – and there always seem to be more of those "other options" to try first. However, history has shown that eventually, leaders emerge who step a few levels above day-to-day politics and take responsibility. I am genuinely convinced that such people exist in Europe, and there are certainly plenty of them among Estonia's politicians as well.

But I suppose you'd only need the fingers on two hands to count the capitals that speak the same language as Tallinn?

I've thought about it this way: the European Union has 27 countries, each with presidents and prime ministers. In most cases, those leaders have only made it into a small paragraph in their country's social studies textbooks – not even a full page. And when these leaders realize that their paragraph might simply state that they did nothing when they had the chance, I think no one would want that to define their legacy.

That's why all these historical comparisons to Churchill and Chamberlain are so effective – they highlight the moral polarization of the situation. A similar instinct, I believe, will ultimately guide us down the path to victory. Because everyone knows what the alternative is, and no one wants to be remembered as the one who paved that road.

You're quite optimistic.

It's always darkest before the dawn.

Listen, you first said that 1,000 days ago.

I remember saying something along the lines of things will get worse before they get better some time in spring.

Or was it your friend Jonatan Vseviov (secretary general of the Ministry of Foreign Affairs – ed.) who said it?

Jonatan has definitely said the words.

But before things get better, they tend to get worse, then even worse, then worse still and finally completely crazy – only then does it slowly start to improve. It's hard to predict in advance when things will actually hit that "completely crazy" point.

If you walk around Estonia every day, stroll the streets in the evenings, visit restaurants or watch TV at home, I don't think anyone would describe the situation as having reached that point yet. To assume that everything is completely on fire everywhere doesn't seem entirely accurate either.

I'm not sure if that was an optimistic or pessimistic note to end the year on.

Well, pessimistic people will see pessimism everywhere and optimists will see optimism just the same.

Is it still possible to be hopeful about next year?

I've defined it for myself like this: the time when we could compensate for a lack of action with words has long passed. This applies to national leaders, but it equally applies to ordinary people. When there's great anxiety, it needs to be alleviated with action – with channeling energy into what helps prepare us, as a country and as individuals, for crises.

I believe that the resolve and courage that emerge from this are truly inspiring. Ultimately, standing up for values and freedoms is what gives all of us that spine-tingling feeling of purpose and determination.

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