Hanno Pevkur: National defense needs at least a decade's budget framework

In the coming years, new capabilities will require hundreds of additional service members, making a motivating and sustainable pay and benefits system essential. It is time to establish at least a 10-year budget framework for defense planning to ensure stable and lasting development, writes Hanno Pevkur.
In the fall of 1992, President Lennart Meri described Estonia as a country that was "thin and tormented, with many scars, some of which were still bleeding." We had just emerged from occupation and had to put an end to the Soviet past. A great task lay ahead: "to restore a sense of security and establish the rule of law, but also to strengthen the police, border guard and defense forces and to complete the withdrawal of foreign troops."
The Ministry of Defense had only just been created and the Defense League and the Defense Forces had been re-established. We could finally begin building up our state and our independent defense capability. The 1993 defense budget set aside just under 124 million Estonian kroons (€8 million) for this purpose.
Now I can confirm that our defense budget for next year will be more than €2 billion and over €10 billion over the next four years. That is more than 5 percent of our national wealth directed toward strengthening Estonia's independent defense capability. It is 250,000 — let me emphasize: 250,000 — times greater than the first defense budgets of a newly re-independent Estonia.
The Defense Forces, myself as minister of defense and the Ministry of Defense with all of its subordinate agencies understand, without excess emotion, how great a burden this is for the Estonian people, for every family, for every taxpayer. But our shared effort must indeed deliver and create additional capabilities for Estonia — enough for our independent defense, deterrence against an aggressor and a clear signal to all allies that Estonia takes its defense seriously.
To understand how much we lost in developing our defense capability because of occupation, we must go back to the time before World War II. In 1938, Estonia stood almost on equal footing with Finland economically — two small northern nations with similar economic opportunities and dreams. Estonia was nearly equal to Finland, even slightly ahead: our GDP per capita was nearly $3,800, while Finland's was $3,600.
The occupation shattered those dreams and by 1991 Estonia had become one of the poorest countries in Europe. Simply put, we had nothing. According to World Bank data, Estonia's GDP per capita 30 years ago was just over $3,000, while in Finland it was over $26,000 — a gap of more than eightfold. But freedom restored our belief that we could rebuild our country.
In 2025, Estonia leads all post-Soviet economies, with a GDP per capita of more than $32,000 — far ahead of Russia (about $15,000 per capita), Georgia (about $9,000 per capita) and Uzbekistan, where GDP per capita is at the level where we were in 1995, about ten times smaller than our current level. Our wages and living standards have multiplied. That is reality.
Yes, I know the opposition points out that Finland is still richer than we are. That is true. Finland produces about $53,000 per capita, or 1.7 times more than Estonia. But let's remember: 30 years ago, the gap was eightfold. Let us acknowledge that as a nation and through our parliaments and governments, we have made the right choices in the bigger picture and should take more pride in our achievements.
If we can maintain this pace, soon the gap will be negligible and we will finally have reclaimed the wealth once stolen from us by the aggressor. Estonia is not just a survivor but an example, proof that a free people, even a small one, can rise, develop and bear responsibility. Estonia is no longer thin and tormented, but strong and standing tall. Estonia is capable of defending its own freedom, its home and its peace.
Defense spending
We cannot overlook the fact that our eastern neighbor has been waging a bloody war of attrition against the Ukrainian state and people for nearly four years. Russia has not changed its goals, but the fact remains that it controls less Ukrainian territory today than it did in the spring of 2022.
In that time, Russia has achieved limited progress on the battlefield, but at colossal cost — its losses amount to more than a million dead and wounded. Its economy is also shrinking: war spending combined with Western sanctions is driving up the budget deficit and forcing Moscow toward tax hikes and spending cuts, while Ukrainian drone strikes have already knocked out about one-fifth of Russia's oil refining capacity.
Of course, the international community is making efforts for peace, but to believe that peace will come through an agreement with Russia is self-deception. The historical record speaks for itself: the Bases Treaty ended in occupation, the Moscow Peace Treaty in the Continuation War and the Budapest Memorandum in full-scale war — not to mention the Minsk peace agreement, which never became reality.
We all — including our allies — know that Russia understands only strength. Economic and military strength. What is happening in Ukraine only confirms this historical rule. That is why we have only one choice: to provide Ukraine with as much military aid as possible and to keep Russia under constant pressure with every means at our disposal, including sanctions. In the war of attrition launched by Russia, the winner is the one who can maintain the will to win and above all break the adversary's morale and economic resilience.
How does all this affect us? The answers are not hard to find. Russia's destabilizing activities directly undermine our people's sense of security and war news is part of our daily information space. Rising defense spending, economic instability and people's sense of safety are just a few of the key points. Let us admit: the threat from Russia will not disappear. Therefore, we must adapt, stand tall and steadily strengthen our defense capability.
I commend all Estonians, whose firm will and support have carried the strengthening of our national defense. I also acknowledge all parliamentary parties that have placed Estonia's defense above chasing populist points.
We are capable of working well together. We were among the first in NATO to raise defense spending to 2 percent, then to 3 percent and starting next year to 5 percent of GDP. This has not been an easy path, since money does not grow on trees or inside ATMs — it is gathered at the expense of all our daily needs and habits. But in doing so, we prove that for Estonians, our country and our freedom outweigh inconveniences such as tax increases.
I also thank former and current heads of government and members of the Riigikogu who have stood united in making these decisions. That is why I call on the Riigikogu to unanimously enshrine the allocation of 5 percent for military defense into the long-term foundations of security policy, which will come before lawmakers in the coming months.
When we talk about defense spending, we are not talking about numbers on paper. Next year, defense spending will exceed €6 million per day. This must be transformed into comprehensive and real military capability — trained soldiers, units, weaponry, ammunition, air defense and more broadly our people's sense of security. This is a great responsibility, but also the knowledge that each day's investment strengthens Estonia's defense and secures our future.
Building defense capability is a strategic and time-intensive process. A weapon does not fight on its own. Military capability is not just missiles, air defense or artillery; it is the ability to generate military effect through an integrated system — from doctrine to manned force structure, from training to armaments, from infrastructure to willpower.
It is crucial to understand that we must view military defense as a whole. If there is no clear vision of the force we are building and decisions are made haphazardly or in a fragmented way, then no combat-ready and sustainable armed forces will emerge.
Defense planning must be coherent and based on shared objectives. More than that, we must view all of this in the context of comprehensive national defense: how what we develop for military defense also strengthens society's non-military resilience and continuity. That is why I am pleased that already this Wednesday, the Riigikogu will hold the first reading of an entirely new framework law for comprehensive national defense — the Civil Crises and National Defense Act.
The military muscle of national defense
As is well known, the national defense development plan sets a ten-year target for the kind of military defense we need and can afford. Unfortunately, the four-year state budget strategy covers only near-term needs, leaving the long-term plan uncertain in terms of resources. That is why I am convinced it is time to create at least a ten-year budgetary framework for defense planning — one that ensures stable development and sustainability.
Such a decision would help guarantee that our combat-ready force is not held hostage to isolated decisions or shifts in budgetary policy, but instead develops systematically and reliably, in line with NATO's deterrence and defense posture as well as our own constitutional obligations. I remind you that NATO itself has only just agreed on a 20-year plan for capability needs.
Let me explain a bit about our military muscle. At present, our wartime structure consists of about 44,000 active service members, reservists, Defense League members and allied troops. Our goal is to grow this number to 55,000 over the next ten years.
The divisional staff serves as the central command level, with the structure built around two mechanized infantry brigades. These are supported by territorial defense with 20,000 fighters, as well as allied units both integrated into our brigades and deployed here as forward elements, such as the United Kingdom's 4th Brigade. This is a comprehensive structure with command capacity, combat support, training, equipment and infrastructure.
Looking at recent steps in developing military capabilities: we mechanized the 2nd Infantry Brigade, moving it onto armored platforms. This significantly increased the brigade's mobility, protection and firepower.
Within the divisional chain of command, we began building an artillery regiment that includes both tracked K9 and wheeled CAESAR platforms, as well as HIMARS multiple launch rocket systems and loitering munitions. These give Estonia, for the first time, the ability to strike enemy assembly, supply and command areas already on enemy territory.
We have also continued developing layered air defense. The creation of medium-range capability is underway, with IRIS-T systems coming into service next year. To strengthen short-range air defense, we have procured additional Mistral launchers and munitions to protect units in their assembly and movement areas. We have also bolstered units' close protection with man-portable Piorun air defense systems. The navy, meanwhile, has gained a strategically significant anti-ship capability with the Blue Spear system, which allows us to effectively cover and defend Estonia's coastline.
With additional resources available through 2029, we will focus above all on those military capabilities that the commander of the Defense Forces deems critical for carrying out his tasks and on which we have jointly agreed with our NATO allies for fulfilling collective defense obligations. These decisions are based on the experience of Ukraine, our international commitments and threat assessments.
It is important to note that our choices are not between what is unnecessary and what is necessary, but between what is necessary and what is also necessary. The issue is not only which capabilities are needed to defend Estonia, but also which ones we can realistically build and sustain with available human resources, financial means and allied support. We must understand that effective defense is built on clear priorities and sustainable, comprehensive solutions — not on trying to fulfill every wish list at once.
Raising defense spending from 3.4 percent to more than 5 percent allows us to take the next significant step in systematically developing air defense capabilities: the creation of an air defense brigade. This unit will bring together various air defense battalions, including existing and developing medium-range and short-range systems. We will also create a mobile short-range air defense unit, which will improve protection for maneuver units and responsiveness in a changing tactical and operational environment.
Within the air defense brigade, we will begin preparations for ballistic missile defense capability, though larger-scale investments in long-range air defense can only be made after 2029. Together, this will give Estonia, for the first time, the ability to intercept drones, cruise missiles and ballistic missiles — greater protection against possible airstrikes and a capability the Estonian people have awaited for years.
In developing the division, we will focus in the coming years on long-range precision strike capability, command capacity and improving unit protection. We will establish a reconnaissance and fire control battalion that integrates reconnaissance, observation, targeting and fire coordination capabilities, enabling us to detect and engage the enemy in depth. To ensure divisional freedom of action and mobility, we will also create a pioneer battalion tasked with supporting unit movement and improving protection against obstacles, minefields and other enemy measures.
To boost firepower, brigades and territorial defense units will receive unmanned aerial strike teams and we will procure additional attack drones. Unmanned aerial systems will be integrated into existing units to improve real-time situational awareness and enhance independent firepower. In parallel, we are developing counter-drone and electronic warfare capabilities to increase protection against enemy unmanned and electronic attacks.
We will also create missile defense batteries and begin establishing counter-rocket, artillery and mortar (C-RAM) systems to protect units and critical infrastructure from rockets, artillery shells and mortar fire.
Given Estonia's vast maritime area, we must acknowledge that our needs clearly exceed our resources. But with increased defense spending, we will be able to modernize existing naval vessels and begin replacing the first patrol ship.
All of these developments naturally require extensive investments in infrastructure — from training areas, firing ranges and training facilities to dispersed command posts and the Baltic Defense Line. These are necessary for both our own units and our allies.
Equally important are investments in command and communications capabilities; without them, no order or intelligence reaches commanders and units in time. Alongside this, ensuring the long-term presence of allies in Estonia is crucial and this requires our preparedness and logistical support.
And, of course, no combat-ready unit can function without ammunition. Between 2022 and 2029, we have procured, are procuring and have allocated roughly €5 billion to build up and replenish ammunition stocks — because, just like in the kitchen, even the best chef with the finest equipment is helpless if the pantry is empty.
Defense industry
The domestic defense industry and its development are a natural and inevitable part of our national defense. In the newly approved defense industry policy framework, adopted a few months ago together with Estonian defense industry companies, we have set the goal of growing from today's €500 million turnover sector into a €2 billion industry by 2030. To achieve this, we are increasingly viewing the economy, innovation and security as a single whole, because economic prosperity and innovative thinking directly strengthen our security as well.
The government has made it clear that as many defense investments as possible should remain in Estonia and support the growth of our defense industry. It is worth noting that, as one of our latest decisions, we have chosen to establish a Future Capabilities and Innovation Command within the Defense Forces to introduce new technologies.
Work is also underway to establish a defense industry park and we have launched a drone training program in schools. This will help young people acquire basic skills in a field that is becoming ever more central to the warfare of the future.
Finally
All of the above is necessary to safeguard Estonia's freedom. But that freedom can only be preserved if we, as a nation, remain united and understand that the backbone of our defense capability is, through national willpower, our people: trained active service members, conscripts and reservists. Their preparation takes years and maintaining their combat readiness requires continuous training, motivation and support from society. For this reason, we are increasing allowances for conscripts and reservists and raising salaries for active service members — to keep experienced people in service and encourage new recruits to join.
In the coming years, new capabilities will mean the need for hundreds of additional active service members. To ensure this, the salary and benefits system must be motivating and sustainable in the long term. Equally important is that our will to defend carries forward into the will to win — the readiness not just to endure, but to prevail. The will to win is not about war or peace; it is a mindset: "Yes, we can!" That is what gives our defense capability its true credibility. Put even more simply, our attitude must be: "Estonia will win, because we want to win."
That is why I struggle to understand those who fiercely oppose training areas or a defense industry park and pop champagne corks when a court rules that there is supposedly enough time to develop national defense.
Have we really already forgotten that for 50 years we lived under oppression and occupation, unable to leave Estonia, needing special permits even to travel to Saaremaa, with the sea closed off to free sailing? That from Raadi or Kiltsi airfields, Russian fighter jets took off daily, rattling the windows of Tartu and Haapsalu residents, while at Nursi explosions far outnumbered the few dozen days of artillery fire planned in the Defense Forces' future training schedules? Let me remind you that in Soviet Estonia, there were nearly 1,565 military sites spread across some 800 locations, with a combined area of almost 90,000 hectares.
Let me state clearly and without hesitation: as minister of defense, I do not intend to sit on my hands and wait for a Russian boot to step onto Estonian soil. We must act swiftly and decisively. We must continue strengthening Estonia's national defense and building our capabilities at an accelerated pace through planned actions.
Our greatest treasure is our freedom and our belief in our country. That belief and dedication have carried us through hardships and made Estonia a confident and resilient nation. Just as Lennart Meri affirmed in his first speech as president: "Estonia, you stand at the threshold of a hopeful future!" That thought still holds true today, because we have freedom — and the future of that freedom depends on us.
The commentary is based on the defense minister's address in the Riigikogu on the implementation of the long-term national development strategy "Estonia 2035."
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Editor: Marcus Turovski










