The problems with Politico’s report on EU defence reimbursements to Estonia

Politico, the influential policy magazine, reported yesterday that EU diplomats are unhappy with the amount of funds received by Estonia from the EU as part of a joint fund to partially reimburse donations to Ukraine. The claims prompted a strong rebuttal from Estonia with some politicians here describing the claims made to Politico by anonymous sources as a hostile propaganda operation.

Let’s break down what Politico reported and how it compares to the reality.

The context

The EU established the joint fund, known as the European Peace Facility (EPF), to partially reimburse countries donating military equipment to Ukraine so that the funds can be spent towards replenishing stocks of military equipment and maintaining their security readiness.

The fund has established rules for assessing itself which equipment is categorised as a critical need and therefore can be reimbursed at replacement value. That means it can be reimbursed at the value of the replacement equipment, which may be higher than the ‘book price’ of the equipment donated due to the fact that the only suitable replacements might be more expensive modern equipment and the donated equipment may not even be manufactured anymore. All other donated equipment not deemed critical is reimbursed at book price or written off as zero.

The only ambiguity relates to how much of the reimbursement value is claimed. Estonia, like all EU countries, could claim for 100% of the value, but has chosen it at 90%. Other countries have chosen figures both more and less.

Politico’s claim

Yesterday morning, Politico’s morning ‘Brussels Playbook’ segment dropped the claim from anonymous diplomats that there is unhappiness within the EU at the large amounts claimed by some EU countries, singling out Finland, Latvia, and Lithuania, but focusing on Estonia as claiming a high proportion of reimbursement funds for what they described as “scraps”, which are then replaced with modern equipment.

The morning report quoted an anonymous diplomat saying: “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. 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.”

Politicio did clarify, however, that everything has been done entirely within the rules.

The problem with Politico’s claims

There is already a glaring error here.

Estonia did not donate any Strelas to Ukraine and has not sought to acquire any Stingers, nor seek reimbursement to acquire them in future. Estonia had a tiny number of Strelas leftover from the Soviet era but decommissioned them due to quality concerns. Strelas were actually donated to Ukraine by Germany and media reports have explained that they have been plagued with issues.

The wider characterisation of Estonian-donated equipment to Ukraine as “scraps” is also unjustified due to the fact that all the equipment donated by Estonia was actively in use with the Estonian Defence Forces and the Estonian Defence League, not gathered from warehouses where it has been mothballed, as in other countries, and there have been no complaints about quality from the Ukrainian side. In fact, Ukrainian officials even weighed in to defend Estonia against the Politico article.

For example, Estonia donated significant quantities of Javelin anti-tank missiles, which had only recently been acquired by Estonia but which had a key role in the defence of Kyiv.

Estonia became a significant donor to Ukraine before the fund was established and even before Russia launched its full scale invasion of Ukraine. In total, Estonia has so far donated €400 million in military aid to Ukraine and has received €150 million in EU-reimbursements for it based on the rules of the fund that all EU members can access.

Furthermore, it is Estonia that has been openly arguing for all EU countries to donate more to Ukraine and re-invest more in new equipment for the sake of everyone’s collective security. Estonia is one of the few EU countries that meets and surpasses the agreed NATO defence spending goal of 2% of GDP and is planning to raise it to 3%. It also wants NATO member’s to agree to a new 2.5% of GDP defence spending goal while insisting that this should only be considered as the minimum. The fact that defence spending within a collective international arrangement such as the EU is considered to be a collective benefit undermines the premise of the article that re-investing in defence, even with partial reimbursements, is selfish. It is not a coincidence that all the countries noted by Politico for supposedly taking advantage of the fund are all countries that border Russia and have warned the most about its threat. The fund was specifically developed to ensure continued defence readiness. Yet the significance of the countries mentioned is unremarked by Politico.

Furthermore, state military aid is a small fraction of the total aid given, alongside completely re-imbursed humanitarian and financial donations from the state, as well as the large contributions made by the private and voluntary sector, all of which is also disproportionately much greater in Estonia per GDP.

Throughout the day, Politico’s story was strongly rebuked in Estonia, including by the Ministry of Defence. The European Commission itself also clarified that there has been no misuse of the fund.

Politico doubles down

Later in the day yesterday, Politico followed up its morning report with a feature article about the allegations. The reporter behind the story, Jakob Hanke Vela, also responded defiantly on Twitter to a user pointing out the errors in the claims publisher earlier.

Hanke Ela tweeted back: “Nope, the story has been checked and confirmed, and we have followed up with an article here.”

This seems quite disingenuous as the article did not address the issues raised in the tweet that he was responding to, all of which are accurate points.

In fact, the article deleted the key claim in the earlier report about Strelas being swapped for Stingers, used as the only example to characterise Estonian donations as “scraps”. There is no good journalistic reason for essentially tidying up the accusation against Estonia by removing a key claim that proved to be false instead of noting that it was false and that Estonia had refuted it. The fact that an anonymous source behind the article’s claims confidently gave such a wrong explanation should remain part of the story.

Much of Estonia’s other responses are also left out, such as the fact that its substantial military donations to Ukraine started before the fund was established. It notes that Germany has written off as zero the value of old Soviet kit it donated from East German stocks without mentioning that Estonia has also written off kit as zero. In the case of Germany’s Strelas, for example, it would indeed be a scandal were they not written off as zero.

The second article focuses only on substantiating that there are some within the EU unhappy with Estonia’s level of reimbursements, while accepting their premise that they should be unhappy – even though Estonia is communicating that other EU countries should donate more to Ukraine and invest more in new equipment. This would also level out the proportion of reimbursements from the EU, just not in the way the complainants and the journalist have in mind, but in a way that is better for Ukraine, Europe, and the world.

The speculation that the anonymous sources behind the article had been engaged in a hostile information operation can only remain speculation. It is entirely possible that the claims reflect real sentiment, considering that there are EU countries with lower levels of donations and defence investments. That is the real scandal.