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Expected armor in Europe

The increasingly tense security policy situation in Europe and the expected military build-up caused defense stocks around the continent to surge.

» Published: February 17 2025

Expected armor in Europe
Photo: Martin Meissner/AP/TT

The rise in stocks occurs after the US's announcement of peace talks in Ukraine and ahead of Monday's crisis meeting in Paris, where French President Emmanuel Macron has called several European leaders to discuss the development of events.

German submarine company Thyssenkrupp has risen 19.8 percent on the Frankfurt Stock Exchange on Monday.

Weapons company Rheinmetall has surged 14 percent. The value of the share has more than doubled in the past year after several major orders – not least from the German state.

German Hensoldt has risen 13.5 percent.

"The goalposts are shifting"

BAE Systems climbed 7.9 percent on the London Stock Exchange, the share's best day in several years.

Swedish Saab was also pulled up and surged 16.2 percent, as did Italian Leonardo, which rose 8.1 percent.

The rise in the industry comes as it becomes increasingly clear after the weekend's security conference that Europe will need to increase its military support to Ukraine.

The goalposts are shifting, and the EU realizes that it can rely less and less on the US to defend its borders, says Aneeka Gupta, head of macro research at asset manager Wisdomtree.

Expected debt increase

The new security policy situation also affected the pricing of government bonds in several European countries. This is because debt is expected to increase as expenditures rise for the buildup and to shoulder the costs of maintaining a lasting peace agreement.

Benjamin Haddad, France's minister for European affairs, raises the controversial issue of joint EU loans to finance defense investments. This is something several EU countries want to see – but so far not, for example, Sweden and Germany.

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TTT
By TTThis article has been altered and translated by Sweden Herald

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