LONDON —
European defense firms appear set to profit from a massive EU investment in armaments, as the bloc reacts to a U.S. pivot away from Europe’s security under President Donald Trump.
The $860 billion “ReArm Europe Plan” faces opposition, however, from Hungary, which argues the effort to continue arming Ukraine in its war against Russian invaders could bankrupt the EU.
Germany’s Rheinmetall, which makes the widely used Leopard tank, has seen its stock jump almost 90 percent since the start of the year. Shares in British arms maker BAE Systems are up over a third, while Italy’s Leonardo and the French firm Thales have also risen sharply.
Europe is pushing to bolster its own defenses after Washington indicated that European security would no longer be a priority, explained Tim Oechsner, a senior trader at Germany’s Wolfgang Steubing AG bank.
“The stock market has also realized that Europe is more on its own and has to defend itself accordingly — and that the USA has taken a back seat as a reliable partner. In this respect, armaments and defense spending are forecast to be higher and the values are set correspondingly higher,” Oechsner told Reuters.
Several European defense stocks have recorded huge gains in recent weeks, bucking the general nervousness in global markets over a potential trade war triggered by U.S. tariffs.
