Estonia's incoming economy minister: talk of Russian threat makes investors more cautious

Estonia's Reform Party appointed Liina Vahtras, former head of the national e-residency program, as the new Minister of Economic Affairs and Communications on Tuesday. In an interview, she acknowledged that frequent discussion of the Russian threat has made foreign investors considering Estonia more cautious.

According to Vahtras, the Estonian Business and Innovation Agency has observed that the decision-making period for foreign investors has lengthened. Still, she stressed that transparency about the danger has overall helped Estonia earn greater international trust, and that such discussion had been necessary.

Vahtras said the state's core message should be one of preparedness and capability, noting that security matters largely fall under the remit of Defense Minister Martin Herem. Her role, she said, is to explain why Estonia remains a trustworthy and protected place for investment.

Future of traditional industry

On traditional industrial sectors, which have been hit by wage-price inflation partly driven by tax increases, the minister said businesses need to take bigger strides toward automation, digitization and artificial intelligence. She noted strong interest in this shift — the agency's innovation loan program and an AI grant both drew such high demand that applications for the grant had to be closed within less than an hour after more than 200 submissions came in.

Asked what cuts she might make to her ministry's budget, Vahtras said she has not yet familiarized herself with the budget and could not give a precise answer, though she noted that significant cuts have already been made to the Ministry of Economic Affairs and Communications in previous years.

The minister also acknowledged that her post is not widely known to the public, but said she intends to do her best in the role and will seek a mandate from voters in the 2027 elections.