Estonia and fellow Baltic states Lithuania and Latvia -- all bordering Russia -- fear they could be next in Moscow's crosshairs were it to win its war against Ukraine.

"Russia has not changed its goals and imperialistic ambitions. This is a real threat to both Europe and NATO," Michal said on X.

Announcing Estonia's government decision to increase defence spending to "at least five percent of our GDP from next year", Michal said: "Our aim is clear -- to make any aggression against us unfeasible."

Defence Minister Hanno Pevkur said the move was "historic" for the country of 1.3 million people.

"Such a fundamental decision on raising defence spending has never been made before," Pevkur said.

Estonia's military expenditure earmarked for this year is 3.3 percent of gross domestic product.

"To go in one year from three to five percent of GDP in the defence budget is a highly important step for Estonia and Estonian people, so that Estonia can be securely defended," Pevkur said.

In January, Lithuania announced plans to spend an annual five to six percent of its GDP on defence from 2026 to 2030.

Russia's war in Ukraine has jolted NATO to strengthen its eastern flank and ramp up spending, and US President Donald Trump has demanded alliance members increase defence expenditure to five percent of GDP.

The transatlantic alliance's current minimum level for defence spending is two percent but some members already spend more.

Poland plans to spend 4.7 percent of its annual economic output on defence in 2025.