Estonia defense minister resigns

Estonia’s Defense Minister Hanno Pevkur said on September 2 that he would resign after days of pressure over audit findings and a failed ammunition deal tied to support for Ukraine. Pevkur told ETV’s “Aktuaalne kaamera” that he was taking political responsibility for problems identified in the defense sector, even though he said the minister did not personally negotiate contracts or count ammunition. The resignation followed a National Audit Office report on August 28 that found serious weaknesses in financial management and inventory accounting across institutions under the Ministry of Defense. It also followed reporting that Estonia had paid about €70 million in advance to suppliers that had never previously sold a shell. ### Why did Pevkur say he had to go now? Hanno Pevkur said the audit criticisms were serious enough that he should step down. In comments carried by ERR, he said a leader had to have the courage to take political responsibility even without personal responsibility, and said the prime minister would need to find a new defense minister. Pevkur had served in the post since 2022. (news.err.ee) Coalition and opposition politicians had publicly questioned whether he could remain in office. ERR reported that Social Democrat Raimond Kaljulaid urged him to consider resigning, Eesti 200 parliamentary group chair Toomas Uibo said he did not see how Pevkur could stay if the reports were accurate, and Isamaa leader Urmas Reinsalu also called for his resignation. (news.err.ee) ### What exactly was the €70 million shell deal? ERR reported that Estonia sought to buy artillery shells for Ukraine and paid a total of €70 million in advance to Indian suppliers that had never previously sold a single shell. Euractiv identified the company in dispute as Datasel, an Italian-registered company owned by Indian ammunition maker Neco Defence Munitions, and said the payments were linked to a procurement financed from EU windfall profits from immobilized Russian assets. (news.err.ee) Euractiv reported that Estonia moved quickly because Ukraine needed large-caliber shells within a six-to-eight-month window. An Estonian official told reporters, including Euractiv, that the procurements involved greater risks than usual because of the urgency. ### Where did the deal break down? Euractiv reported that the dispute is now in arbitration and that Estonia says the inspected ammunition did not meet required standards. (news.err.ee) ERR separately reported that the Estonian Center for Defense Investments, known as RKIK, has gone to court to protect the state’s rights after the counterparty failed to fulfill its contractual obligations. (euractiv.com) Elmar Vaher, the current RKIK director general, told ERR he would not have entered into a contract of that size or made an advance payment of that scale to a company the agency did not know and that was not itself an ammunition manufacturer. Vaher said the decision had been made by former RKIK director general Magnus-Valdemar Saar. ### What did the audit say beyond this one contract? (euractiv.com) The National Audit Office said on August 28 that serious problems persisted in the Ministry of Defense, the Estonian Defense Forces and RKIK, increasing the risk of misuse of state funds and assets. Auditor General Janar Holm said the shortcomings were not merely technical, and ERR reported that the audit office issued a qualification related to the accuracy of €1.2 billion in inventories held by institutions under the ministry. (news.err.ee) ERR also reported that the Prosecutor’s Office has opened criminal proceedings examining the ministry’s area of administration and the accuracy of inventory balances reported as of December 31, 2024. Prosecutor General Astrid Asi said no separate criminal case had yet been opened solely on the basis of the August 28 audit, but that this year’s findings were being analyzed within proceedings opened in 2025. No suspects have been named. (news.err.ee) ### Who knew about the contracts inside government? ERR reported that Magnus-Valdemar Saar said no major decisions were made without the approval of Defense Ministry leaders. The same report said then-Permanent Secretary Kusti Salm was aware during negotiations on the first contract, and current Secretary General Kaimo Kuusk was later kept informed. (news.err.ee) Prime Minister Kristen Michal now has to name a replacement for Pevkur. At the same time, RKIK’s court action over the shell contract and prosecutors’ accounting investigation remain active, according to ERR and Euractiv. (news.err.ee)