After a decade of slashing defense budgets, European leaders are about to start investing significantly more in arms, citing “a challenging geopolitical environment.”
A resurgent Russia on Europe's eastern flank, increased terrorism on the Continent and an incoming U.S. president who has questioned America's commitment to NATO may give some European capitals the jitters. But for Europe's defense companies, fears about the Continent's security means big business.
Just before Christmas, EU leaders agreed to dramatically increase spending on defense research from €25 million now to €500 million beginning in 2021, which would make the EU the fourth largest investor in Europe in defense industry research after the U.K., France and Germany. The investment program needs approval by both the European Parliament and national capitals.