On Thursday, heads of state at the European Council meeting in Brussels will discuss using Russia's frozen assets to fund a loan for Ukraine.  

"Europe must, in any case, move forward with putting those frozen assets to use. And fortunately, it is doing so," Michal told Vikerraadio's "Stuudios on peaminister" on Monday.

"There are several different aspects to this. First, Ukraine's activities over the coming years have to be funded from somewhere. Ukraine needs to know that Europe is capable of making decisions and that it also has the means. An alternative is taking out a joint loan, this is also an option. Or each country contributes based on an agreed-upon formula," he said.

The prime minister stressed that the goal is to make decisions this week.

Michal also said EU member states, including Estonia, are prepared to act as guarantors for Belgium in the event the assets must be repaid.

"This is where that obligation would come from. The estimated amount is roughly between €450 million and €500 million. A mechanism is also under discussion in Europe, where the first few years would be guaranteed by member states, and later it could be backed centrally by the EU budget," he said.

"This is still a preliminary outline. First, we reach a political agreement to use the frozen assets, then finance ministries and financial experts work out the details, then we go to parliament and seek support for it," Michal explained.

U.S. security strategy should not come as a surprise

Speaking about the U.S. security strategy, Michal said that for those who have followed U.S. politics, there were no major shocks.

"That same security strategy conveys the same message Trump delivered during his first term. The message is that Europe is one of the wealthiest regions—if not the wealthiest—in the world, with a very high level of freedom, and if you want to preserve that, to maintain your way of life, then you have to contribute to its defense," he told he show.

"That is, in fact, the subtext. And it's no secret that from Estonia's point of view, from the Baltic perspective, from the Nordic view, it makes sense, especially if you know your neighbor next door, that we contribute to it. It all makes sense," Michal said.

Budget deficit vs defense spending

Last Wednesday, Social Democrat Riina Sikkut asked Annely Akkermann (Reform), chair of the Riigikogu Finance Committee, when Estonia would return to meeting its budget rules.

Akkermann responded: "A new situation will indeed arise starting in 2029. I did in fact say that once Russia's war machine is stopped and we can reduce defense spending back to the NATO-agreed level of 2 percent, then our position will begin to improve."

Michal said the prime minister does not coordinate statements with the head of the finance committee, but the government does follow the budget rules.

"We comply with the budget rules, which means the deficit remains within limits and is decreasing over the years. For it to decrease further, various steps need to be taken regarding which services the state provides, to what extent, and how we use our money," he said.

"I do not know why this should be tied to defense spending. My forecast today is rather that prosperity, democracy, and a love of peace will not reach Russia for years to come, not anytime soon," the prime minister added.

Michal stressed that security and defense spending will likely need to remain high for the foreseeable future to fulfill the necessary defense investments.

However, he said the deficit is improving and is "already on a downward trend".

"Let me remind you that in 2024, the deficit was expected to be 3 percent, but it was around 1.5 percent. This year we passed a budget with a 3 percent deficit, and a few months ago it was at 0.8. It will probably land somewhere around 1 percent. In both years, we have already operated up to €900 million more frugally. Hopefully, we can continue doing so in the coming years as well," Michal outlined.

President's Kazakhstan visit is a storm in a teacup

Michal was also asked about President Alar Karis's visit to Kazakhstan, which the media say has created confusion about Estonia's foreign policy messaging when support for Ukraine was removed from a speech.

Michal said there have been no further discussions on the topic, neither with the government nor with the president. Estonia's foreign policy line has not changed.

"The fact that Estonia stands behind Ukraine as its rear support, that Russia must bear the costs and take responsibility, that's pretty clear in our case, that's our position. And in my cooperation and interactions with the president, it is quite evident that the president pursues this same line and foreign policy of the Republic of Estonia. This search for contradiction feels like a bit of a storm in a teacup," the prime minister commented.

The Ministry of Foreign Affairs announced that Estonia's Ambassador to Kazakhstan Jaap Ora had resigned after the trip.

Michal said that an ambassador's role is to explain the local situation. "A lot of important nuances and details come from the ground. Ambassadors are not just sitting around – they are doing important work for the Republic of Estonia and providing valuable input," Michal said.

Speaker chooses their own tone

"The speaker always chooses their own tone. Whatever tone they choose, that's the one they choose. And often, in addition to public events, there are private meetings where people are much more direct than they can usually be in public speeches," said Michal.

The presenters asked if the words were removed to benefit the Estonian business delegation traveling with the president.

"Well, Estonia's state policy does not change based on the tone of someone's speech. I dare say that even if someone does not mention it at a given moment, anyone who bothers to open up the messages of the Estonian state and its foreign policy will see them clearly," Michal said.

"We are very, very strong when it comes to pursuing shadow fleets, holding Russia accountable, using frozen Russian assets, and restricting the movement of Russian diplomats and tourists. I think there should not be much doubt about what kind of country Estonia is. Even if someone does not say it every five minutes," Michal added.

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