Von der Leyen announces “Rearmament of Europe” plan

2025-03-03 18:07:00, Kosova & Bota CNA

European Commission President Ursula von der Leyen announced a plan today, which she called “Rearming Europe,” which she will present to a meeting of European Union leaders this week. Her comments follow the European Union’s growing efforts for peace between Ukraine and Russia. The announcement sent shares of European arms companies soaring.

European Union Commission President Ursula von der Leyen said today that she will inform member states on Tuesday about plans to strengthen the European defense industry and the EU's military capabilities.

"Tomorrow I will inform member states through a letter about the Rearmament of Europe plan. There is no doubt that we need a massive increase in defense. We want lasting peace, but lasting peace can only be built through strength, which begins 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 caused a rise in shares of arms manufacturing companies in Europe.

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

Europe has faced pressure to spend more on its security after Russia's large-scale attack on Ukraine three years ago, and the need to act has become urgent as Europeans, including Ukraine, have been sidelined in talks between Washington and Moscow.

Reuters news agency reported on Sunday that parties in talks to form Germany's new government are considering the creation of a defense fund.

At midday, shares in the region's largest defense company, BAE Systems, rose by about 15%, while those of the German company Hensoldt, which produces electronic systems for the Eurofighter fighter jet, rose by 22%, reaching a record high.

Shares of Leopard 2 tank manufacturer Rheinmetall rose 12%, those of Italian defense company Leonardo rose 11% and shares of Europe's largest defense technology company Thales rose about 13%.

JPMorgan analysts say the events of the last two weeks have "strengthened" their thesis about a European rearmament cycle.

The European Union believes that 500 billion euros of investment is needed over the next decade. But increasing defense spending to 3% of gross domestic product would require almost 200 billion euros more per year./ VOA