The "Zapad 2017" exercise which Russia will hold from next week in Belarus and its western exclave of Kaliningrad has caused alarm in the Baltic states and Poland and drawn criticism from the US and NATO for a lack of transparency.
Parly, speaking at a gathering of EU foreign ministers in Tallinn, said it was clear Moscow was pursuing a "deliberate, intentional" strategy of showing off its military might.
"It is particularly important in this context that we reaffirm our presence in the face of this expression and this demonstration the Russians are making which is a strategy of intimidation -- we must not hide that fact," she said.
German Defence Minister Ursula von der Leyen said it was clear that Zapad was in fact about showing off Russian force.
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"It is undisputed that we see a demonstration of capabilities and power of the Russians. Anyone who doubts that only has to look at the high numbers of the participating forces in the Zapad exercise: more than 100,000."
To counter growing Russian assertiveness in recent years, particularly since the annexation of Crimea from Ukraine in 2014, NATO has stationed about 4,000 troops in the three Baltic countries and Poland.