"A lot has been said about restoring an Estonian-flagged merchant fleet — now it is time to do it," Kõuts said on Friday at a maritime affairs conference in Tallinn. "Then we could see 30-35 cargo ships flying the Estonian flag five years from now."

Kõuts, a former commander of the Estonian Defence Forces, said that a cargo fleet sailing under the Estonian flag would serve to make Estonia bigger and more visible.

Speaking in a panel at the same conference, Minister of Economic Affairs and Infrastructure Kadri Simson said that Estonia has historically been a maritime nation and that in order to uphold and reinforce this image, an Estonian-flagged merchant fleet must definitely be restored. The new government has taken made the restoration of a cargo fleet under the Estonian flag a top priority, Simson said.

Kõuts explained that his vision of an Estonian-flagged merchant fleet was not simply speculation but rather a realistic expectation, judging by neighbors' experiences.

"Based on Latvia's experience, we know that after the relevant prerequisites had been completed, they had 20 vessels in their merchant fleet in two yeare," he noted.

On March 2, the government supported Simson's proposals aimed at creating an Estonian-flagged merchant fleet and provided instructions for working out the necessary regulations with the cooperation of ministries.

"Cargo ships which used to fly the Estonian flag have switched to other countries' flags by now, which does not advance the development of the shipping sector and founding of new maritime enterprises in Estonia," said the minister. "As a maritime nation, Estonia should have a merchant fleet under its own flag, but the Estonian taxation system is currently not competitive on the scale of international shipping."

Proposals for bringing cargo ships under the Estonian flag include changes in the shipping sector-related tax and economic environment which concern opportunities for altering crew members' income tax, social tax and unemployment insurance tax rates as well as the introduction of a tonnage tax as an alternative to income tax for shipping companies.