By David Isaac
At first glance, geography, climate and culture suggest Estonia and Israel have little in common. One sits on the frosty edge of northeastern Europe, defined by pine forests, Baltic winds and a Nordic culture; the other is a mix of Mediterranean beaches, Semitic languages and biblical traditions.
Look closer, however, and similarities surface: two small countries shaped by security concerns, punching above their weight as technological dynamos.
Israel may hold the startup title, but Estonia is Europe’s tech powerhouse, leading the continent, per capita, in tech “unicorns” (privately held startup companies with $1 billion-plus valuations).
The recent establishment of Israel’s embassy in Tallinn, Estonia’s capital, reflects a strengthening relations. In recent years, there has been significant growth in bilateral trade,” Amit Gil-Bayaz, says Israel’s first ambassador to Estonia.
Over the past five years, Estonian exports to Israel have surged at an annualized rate of 28%, while Israeli exports to Estonia grew at an annualized 22.1%.
MP Eerik-Niiles Kross, chair of the Estonia-Israel Parliamentary Friendship Group, says his group is excited about the opening of the embassy.
There are no anti-Israel parties in Estonia, and most parties in parliament are represented in the friendship group.
Estonians’ affinity for Israel is partly due to their history. “We still remember that under the Soviet Union, Moscow said, ‘Israel bad, [PLO Yasir] Arafat, good.’ For us, that meant, ‘Arafat bad, Israel good.’ As easy as that,” Kross said.
Estonia has not recognized a “State of Palestine.” “We do not follow stupid and tacitly anti-Semitic trends in some Western European countries. We want to make sure that we stay firm in support of Israel,” Kross said.
The Estonia-Israel Friendship Group and the Foreign Affairs Committee (largely the same people), help keep the Foreign Ministry and the government on the straight and narrow regarding Israel, he said.
In September, the friendship group was the target of a petition calling for its disbandment. The Foreign Affairs Committee was required by law to process the petition since it received the required 1,000 signatures within a month’s time. Kross said at the time that the petition had an anti-Semitic undertone and reflected a generational shift.
“We are obviously not immune entirely to the trend in the Western world. Still, the problem isn’t as overwhelming as in many countries in Western Europe.”
Ideas have been floated to increase Israel’s positive image, such as establishing a grassroots group that would organize Jewish cultural festivals and “remind the society that there is a lot more in Israel than the war,” he said.
Kross, who is not Jewish, remembers as a child being influenced by his father, who respected Jewish culture, and said there is much to learn from the Jewish people, particularly its emphasis on education.
With the opening of the Israeli embassy, Kross sees a path to more defense-tech partnerships. He wants Estonia to look to Israel’s model of rapidly translating tech startup ideas into practical military solutions. More than 100 Israeli startups contributed to the Gaza war effort through the Israel’s Defense Ministry’s “Green Lane” program, which cut bureaucracy and streamlined the integration of new ideas.
Air and missile defenses are important to Estonia. In 2023, 73% of Israel’s exports to Estonia were defense related.
The Ukraine war was a shock to all of Europe, but especially to countries bordering Russia.
A prominent figure in the anti-Soviet resistance movement, Kross always viewed Russia as a threat.
Estonia has massively increased defense spending, from 2% of GDP in 2022, at the start of the Ukraine war, to 5.4% of GDP ($3.2 billion). (The other Baltic states have done the same. Lithuania has boosted its defense spending a similar percentage. Latvia plans to follow suit.)
“The war in Ukraine has sharpened for many countries, including Estonia, the importance of security, national resilience and cooperation between democracies,” Ambassador Gil-Bayez said.
“Our cooperation started a while ago,” agreed Mariin Ratnik, Estonia’s undersecretary for economic and development affairs. Estonia has watched and learned from Israel in building its startup nation.
“We see growing opportunities in the defense industry where our capabilities complement each other, be it sensors, lasers, drones or advanced optical elements,” Ratnik said. Estonia’s increased defense spending is a consensus issue. The political opposition wanted to spend even more than 5.4% of GDP.
The Israeli embassy opening will certainly strengthen bilateral ties. Israeli President Isaac Herzog’s visited last. He brought a business delegation with him. Estonia organized a business seminar. Thirty Estonian companies attended.
Israeli Foreign Minister Gideon Sa’ar, during his November visit to open the embassy, also brought a business delegation.
Estonian Foreign Minister Margus Tsahkna told reporters at a press conference with Sa’ar:
“We have 50 different businesses together holding a business seminar on all different levels. I’m not talking about just defense industry cooperation, but also cybersecurity, IT, energy.”
He expressed hope that tourism, which decreased in recent years, would pick up. Ratnik said that there has been talk about starting direct flights between the two countries.
In terms of tech, Estonia is perhaps most famous for its e-governance, something Sa’ar commented on during his visit. He said Israel could learn from Estonia, one of the most digitally advanced countries in Europe.
Virtually every government-related activity is conducted online, from filing taxes to medical prescriptions (100% digital) to voting (51% of Estonia’s voters used i-Voting during the 2023 parliamentary election).
Estonia estimates it saves 2% of GDP from its use of digital signatures, something which caught Sa’ar’s attention given Israel’s hidebound bureaucracy.
Estonia preaches the e-governance gospel to other countries. Key to success is trust. “As soon as there is mistrust that maybe my data is used without my knowing, or misused, it wouldn’t function,” said Ratnik.
