Estonian Defense Minister Resigns Following Faulty Ammunition Deal

Estonian Defense Minister Hanno Pevkur announced his resignation on September 2 following a scandal involving a 70 million euro deal for artillery shells intended for Ukraine. The procurement, funded by the European Union's European Peace Facility, involved the Italian registered company Datasel S.R.L. which is owned by the Indian firm Neco Defense Munitions. Reports indicate that the company had no prior history of selling shells before the contract was signed.

According to the National Audit Office, the defense ministry's procurement processes have been criticized in recent reports. While shipments were delayed for months, the ammunition that eventually arrived in 2025 was reported to be faulty and useless. Elmar Vaher, the current Director General of Estonia's Center for Defense Investments, stated that the contract should never have been signed because the company lacked a track record of building such products.

Pevkur stated that he was not personally aware of the specific problems with the deal but resigned to take political responsibility for the defense field. Prime Minister Kristen Michal has called a cabinet meeting for September 3 to discuss the resignation and audit findings. Additionally, the nation's Prosecutor's Office has opened a criminal investigation into issues highlighted in reports from 2025 and 2026.

The incident occurs amid a period of sharply rising defense spending in Estonia. Expenditures grew from 2 percent of GDP in 2022 to 3.4 percent in 2025, with a planned increase to 5.4 percent in 2026. The National Audit Office has warned that the 70 million euro loss may need to be covered by the Estonian state budget, potentially impacting other planned expenditures.