Estonia's Hanno Pevkur resigns over a €70 million Ukraine shell contract

Hanno Pevkur resigned as Estonia's defence minister on Wednesday evening, telling a television audience that a leader needs the stature to take responsibility even when he did not negotiate the contract himself. Prime Minister Kristen Michal now has to name a replacement. Pevkur had held the job since July 2022 and was the longest-serving member of the present cabinet.

The trigger was a 2024 deal to buy 155mm artillery shells for Ukraine through the European Peace Facility and related EU routes that let members spend windfall profits from frozen Russian assets. Estonia's Centre for Defence Investments signed with Datasel SRL, an Italian-registered company owned by Neco Defence Munitions of India. Neither firm had a public record of selling artillery ammunition when the first contract was signed.

Estonian public broadcaster ERR reported that the procurement agency paid €15 million in August 2024 and another €10 million in October. The first batch was meant to reach Ukraine in November 2024. Deliveries slipped. When rounds were later inspected in 2025, Estonian reporting said they failed quality checks and none were sent to the front. The European Court of Arbitration now has the dispute after the contracts were terminated. Figures in Estonian and European coverage put the money tied up at between €60 million and €70 million.

Pevkur said ministers do not count shells or sit in contract talks. He also said the National Audit Office's latest report on the defence ministry and the defence forces left him no choice. The auditors had already warned last year about spending and asset records. Last month they used the phrase "serious problems" again. Opposition voices had called for him to go after Eesti Ekspress published the Datasel file.

The Indian parent company has rejected claims of wrongdoing. The legal fight is now about whether Estonia can recover the advances and whether the EU mechanism that financed them will treat the loss as a national error or as a shared one. Tallinn is talking to the European Commission about that recovery.

Estonia has spent the years since 2022 presenting itself as the NATO member that moved first and spent most, relative to size, on Ukraine. A cancelled shell contract paid from EU funds is the opposite of that story. It also lands on a ministry already under audit pressure. Pevkur's resignation is an attempt to separate the political office from the arbitration.

What remains is the ammunition Ukraine did not receive and the money that has not come back. A new minister will inherit both the court file and the audit recommendations. The shells were supposed to be in Ukrainian hands by November 2024. They were not. That date is the fact the next occupant of the office cannot rewrite.