European leaders are preparing a new defence package to strengthen the continent’s military and support Kyiv. While the details remain unclear, speculation alone has triggered a surge in defence stocks. Politicians from Germany, the UK, Poland, Ukraine, Spain, Denmark, and the Netherlands are meeting in Paris to discuss Ukraine’s status. Many believe the US might exclude the EU from negotiations.
Germany’s foreign minister accidentally revealed plans for a €700 billion weapons package aimed at arming the EU. If approved, this would be an unprecedented move. Annalena Baerbock compared the proposal to COVID-19 relief efforts, but officials have kept details under wraps due to upcoming German parliamentary elections. Since Germany is expected to bear a significant share of the cost, the plan remains undisclosed to avoid political controversy.
Surging European Defence Stocks
With these developments, European defence stocks have skyrocketed.
- Italy’s Leonardo Spa rose 2.16% in a day and 16.86% over the past five days.
- Germany’s Rheinmetall surged 26.99% in five days.
- Hensoldt gained 29.28%, reaching €46.80, marking a 37.49% increase over the past year.
- Sweden’s Saab jumped 31.01% in five days.
Shifting Defence Strategies in Europe
In January, Donald Trump urged NATO members to increase defence spending to at least 5% of their GDP. As US support shifts toward Ukraine, EU member states are taking military matters into their own hands. This shift benefits European arms manufacturers, who are now securing contracts that traditionally went to American suppliers.
If the EU proceeds with the €700 billion defence package, this could mark the beginning of a long-term trend, further boosting European defence stocks.
