Von der Leyen announces plan to “rearm Europe”

The President of the European Commission, Ursula von der Leyen, today announced a plan entitled “Rearming Europe”, which she will present at a meeting of European Union heads of state and government this week. Her comments follow the European Union’s growing efforts to bring peace between Ukraine and Russia. The announcement led to a rise in the share prices of European defense companies.

European Commission President Ursula von der Leyen said today she would brief member states on Tuesday on plans to strengthen the European defense industry and the EU’s military capabilities.

“Tomorrow I will inform the member states in a letter about the plan to rearm Europe. There is no doubt that we need to massively strengthen defense. “We want lasting peace, but lasting peace can only be achieved through strength, and this starts with strengthening ourselves,” she said.

European Union leaders will hold urgent talks on Thursday to provide military support to Kiev and prepare a peacekeeping force for possible deployment in Ukraine.

Announcements of increased defense spending led to a rise in the shares of defense manufacturing companies in Europe.

The European currency, the euro, strengthened, marking a rise in the foreign exchange market against the dollar, while investors flocked to European stock markets, where the index of aerospace and defense companies “.SXPARO” reached record levels.

Europe is under pressure to spend more on its security following Russia’s large-scale attack on Ukraine three years ago. And as Europeans, including Ukrainians, have been left out of the talks between Washington and Moscow, the need for action has become urgent.

The Reuters news agency reported on Sunday that the parties are considering setting up a defense fund during talks to form the new German government.

At lunchtime, shares in the region’s largest defense contractor, BAE Systems, were up around 15 percent, while shares in German company Hensoldt, which makes electronic systems for the Eurofighter fighter jet, were up 22 percent, hitting a record high.

Shares in Leopard 2 tank manufacturer Rheinmetall rose by 12%, those of Italian defense contractor Leonardo by 11% and shares in Europe’s largest defense contractor Thales rose by around 13%.

Analysts at JPMorgan say the events of the last two weeks have “reinforced” their thesis of a European rearmament cycle.

The European Union expects to need to invest 500 billion euros over the next decade. But an increase in defense spending to three percent of gross domestic product would mean an additional expenditure of almost 200 billion euros per year./VOA/