Estonian defence minister resigns in €70m EU-funded procurement scandal for Ukraine

Estonia’s Defence Minister Hanno Pevkur announced on Wednesday that he would step down from his political post after it emerged that the government had used European Union funding to purchase artillery shells for Ukraine from companies with no previous track record of producing the weapons.

Estonian public broadcaster ERR reported on Wednesday that the government struck a deal in 2024 to acquire artillery shells for Ukraine, paying €70 million upfront from the EU’s European Peace Facility to fund the purchase.

The companies involved, however, had never previously sold a single artillery shell. Estonia is now disputing the contracts in a case before the European Court of Arbitration in Strasbourg.

Pevkur, who has served as defence minister since 2022, addressed the scandal while announcing his resignation on public broadcaster ETV. He said that, as minister, he must accept responsibility for the entire area under his authority.

“Although the minister does not count socks and ammunition or conduct contract negotiations, the National Audit Office’s criticisms, primarily concerning the activities of the Defence Forces and the Centre for Defence Investments, raise the question of political responsibility,” Pevkur said.

Estonia’s National Audit Office criticised the Baltic country’s defence spending last month, including investments made by its armed forces. It also raised concerns about the Estonian Centre for Defence Investments, the country’s military procurement agency.

Addressing the artillery contracts, Pevkur stressed that he had not read them, saying the defence minister is not traditionally involved in the details of individual procurement deals.

“The defence minister does not conduct contract negotiations. The defence minister does not count socks and ammunition,” Pevkur said, adding: “The defence minister makes the fundamental decision to support Ukraine.”

The European Peace Facility is an EU funding instrument established before Russia’s full-scale invasion of Ukraine in 2022. It aims to strengthen the bloc’s ability to prevent conflicts, build and preserve peace, and reinforce international security and stability. It has increasingly been used to support Ukraine through military assistance and procurement.

European Commission spokesperson Christian Wigand said Brussels was in contact with the Estonian authorities to investigate whether Estonia must pay back the €70 million of European Peace Facility funds.

“There are, of course, safeguards and there are recovery processes in place to make sure that taxpayers' money is well spent," he said, adding that he could not clarify when the talks would take place.

Pevkur’s resignation follows the high-profile departure of Latvia’s Defence Minister Andris Sprūds in May.