EXECUTIVE SUMMARY
The Baltics have faced increased military activity throughout the summer of 2026, with tensions reaching their highest point over the week of August 17-21. A concentration of NATO military activity has been spotted around Kaliningrad, in unprecedented proximity to Russian military assets in the region. This comes amid reports that Russia is planning a new round of military recruitment in September and, according to Lithuania’s president, intelligence stating that Russia is planning an incursion into NATO territory, most likely into Poland and the Baltics, as early as this year. As security concerns mount in the region, the Baltic countries have bolstered their own defense and deterrence posture. With 2.34B EUR unlocked from Security Action For Europe (SAFE) funds, Estonia is preparing for the possibility of conflict along its borders.
KEY POINTS
- After months of drone incursions and electronic warfare over the Baltics and Finland, jets on a NATO defense mission shot down a drone on August 14th after it entered Latvia’s airspace.
- All procurements from the SAFE funds are expected to be completed by 2030 with Estonia investing in air defense systems, military transport vehicles, artillery shells, and ammunition.
- High Mobility Artillery Rocket System (HIMARS) and National Advanced Surface-to-Air Missile System (NASAMS) missiles are among the most delayed orders in Europe from the US due to stockpile depletion from the ongoing Iran war.
- Estonian unmanned grounded vehicles (UGV) company Milrem Robotics was the subject of an arson attack at one of its factories the night of August 14. Reports suspect this to be a form of Russian hybrid warfare: in 2022, Russia condemned Milrem Robotics’ involvement of its vehicles on the battlefield in Ukraine.
- In August 2026, Estonia launched a new drone surveillance system along its border with Russia. A new site near this “drone wall” will be built to test countermeasures to civilian and military incursions near its border.
- Estonia will keep its defense investments at 5% of GDP.
ANALYSIS
Estonia is particularly vulnerable to electronic warfare and drone incursions into its territory. It is a small nation of 2 million people, and its population is mostly concentrated in two cities, Tallinn and Tartu. More importantly, it lacks an independent military-industrial base, and it shares a practically unimpeded border with Russia, whose 76th Guards Air Assault Division is located in the nearby city of Pskov. By 2007, facing an unprecedented Russian cyber-assault on its digital and telecommunications infrastructure, Estonia began investing in cyberdefense and digital security for its citizens to ensure the continuity of daily life and essential services in the event of a conflict. As such, Estonia has a distinguished cyber/AI startup sector developing under extreme circumstances.
Furthermore, Estonia is one of the more strategically exposed members of the NATO alliance. This is not due to economic weakness, but rather because of the country’s geographic exposure and small population. It has been one of Ukraine’s most steadfast supporters and its Unmanned Aerial Vehicles (UAV) companies have greatly benefitted from close cooperation on the ground with Ukrainian companies. Estonia has also prioritized its transatlantic partnership to reinforce its security against Russia: recently, the country has partnered with US defense giant Lockheed Martin to develop HIMARS systems and a maintenance system in the country. Estonia thus depends on the strength of its NATO partnerships, but it is developing its own security contingency plans in case these alliances weaken.
POLICY IMPLICATIONS
- Estonia and fellow Baltic countries need to pursue a “porcupine” strategy of defense to significantly slow down Russian advancements as NATO partners eventually come to their defense.
- Plans need to be drawn up by Nordic-Baltic nations, and NATO more broadly, for smooth air and sea transportation of logistics in case land-based logistics passing through the Suwalki gap are interrupted.
- Estonia’s increased use and development of UAV technology can unlock a significant force upgrade to the Baltics as they can strengthen deterrence without expending manpower.
- Investing in autonomous technology, such as UAVs and AI-driven targeting, is a net positive for maintaining civilian and troop morale and being able to take out parts of the able-bodied workforce out of the frontlines to maintain Estonia’s operations.
BIBLIOGRAPHY
1). Popilnichenko, K. (2026). NATO High-Tech Aircraft Surge Near Kaliningrad and the Black Sea. [online] UNITED24 Media. Available at: https://united24media.com/world/nato-high-tech-aircraft-surge-near-kaliningrad-and-the-black-sea-21844 [Accessed 31 Aug. 2026].
2). Dapkus, L. and Ciobanu, C. (2026). Lithuanian president warns of Russia’s potential attacks on critical infrastructure. [online] AP News. Available at: https://apnews.com/article/lithuania-baltics-poland-russia-attack-infrastructure-nato-fb3d17fac66f23568cd3cd27264a4c75 [Accessed 31 Aug. 2026].
3). Cohen, C. (2026). Estonia receives first SAFE payment for defence procurement. [online] Euractiv. Available at: https://www.euractiv.com/news/estonia-receives-first-safe-payment-for-defence-procurement/ [Accessed 31 Aug. 2026].
4). Redazione (2026). Drone incursions sow fear, chaos along Nato’s baltic and Finnish borders. [online] Internazionale. Available at: https://www.internazionale.it/ultime-notizie-reuters/2026/08/14/drone-incursions-sow-fear-chaos-along-nato-s-baltic-and-finnish-borders-2 [Accessed 31 Aug. 2026].
5). Alvin, J. (2026). 3 Suspects detained over suspected arson at Milrem Robotics factory in Estonia. [online] ERR. Available at: https://news.err.ee/1610114578/3-suspects-detained-over-suspected-arson-at-milrem-robotics-factory-in-estonia [Accessed 31 Aug. 2026].
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7). Giedre Peseckyte (2026). Estonia and Ukraine sign drone pact to deepen defence industry ties. [online] euronews. Available at: https://www.euronews.com/my-europe/2026/07/07/estonia-and-ukraine-sign-drone-pact-to-deepen-defence-industry-ties [Accessed 31 Aug. 2026].
8). Silver Tambur (2026). Estonia to buy three more HIMARS launchers from Lockheed Martin. [online] Estonian World. Available at: https://estonianworld.com/security/estonia-to-buy-three-more-himars-launchers-from-lockheed-martin/ [Accessed 31 Aug. 2026].