Politico accuses Estonia of gaming the cash for weapons program

Eestlased Eestis | 28 Mar 2023 | EWR

Estonian has sent extensive military aid to Ukraine, including FH-70 towed howitzers that were replaced by K9 self-propelled howitzers - pics/2023/03/60109_001_t.jpg — Estonian has sent extensive military aid to Ukraine, including FH-70 towed howitzers that were replaced by K9 self-propelled howitzers

Politico has accused several EU states, Estonia in particular, of gaming the system that allows member states to recover the cost of their military aid to Ukraine from a joint fund called the European Peace Facility (EPF), to which member nations contribute based on the size of their economies.

Officially, all countries receive the same rate of reimbursement for military aid sent to Ukraine, 84 percent of the price paid. However, the method to calculate that price is open to interpretation. “There are widely different approaches, each country is using their own methodology” to calculate the costs, said one official.

Politico is basing their claim on classified data from the EU’s foreign affairs and defense department (EEAS). According to the data, six countries have calculated their reimbursement claims based on the purchasing price of new materials, rather than the actual current value of what they’ve sent to Ukraine.

Finland has claimed 100 percent of the new purchasing price, Latvia 99 percent, Lithuania 93 percent, Estonia 91 percent, France 71 percent and Sweden 26 percent.

However, Estonia topped the list in absolute figures, claiming more than €160 million for its past donations to Ukraine, for which it was reimbursed €134 million based on the EPF’s rate.

“They are sending their scraps to Ukraine and buying brand new material for themselves, financed with EU money,” said one EU diplomat about Estonia.

A second EU diplomat from a different country confirmed that Estonia’s behavior had raised eyebrows across the EU, as a “particularly blatant case” — even though no one wanted to call Tallinn out to avoid any sign of divisions.

“What the Estonians do is, they send old material, which is no longer in production, and then ask for reimbursement [based on the price of] modern alternatives,” said the second diplomat. To illustrate the point, the diplomat added: “For example, they have sent Strelas [old Soviet shoulder-fired surface-to-air missiles] to Ukraine, but claimed reimbursement for modern Stingers, which of course have more capabilities and command a much higher price. This is also why Estonia’s military support appears to be so much higher per capita than that of other countries in the statistics everybody cites.”

Estonia's defense ministry has rejected the criticism, pointing out that “Estonia has never had Strela-type weapons, nor has Estonia sent them to Ukraine, nor has Estonia owned or acquired Stingers.”

Estonian Defence Ministry has also rejected the allegation about unfair calculations for the cost of equipment. "Estonia has followed EPF rules in determining whether aid given to Ukraine is to be classified as book value or as replacement value. This is to help member states regain their capabilities and replenish stocks quickly, so they are able to reduce their security risk. In addition, every donation is validated by the EUMS clearing house mechanism. These rules apply to every member state equally", said Ministry in their press release.

Eestlased Eestis

Estonia's Nordica to file for bankruptcy after failed privatization efforts