”Increased hopes of an end to the war in Ukraine and a dramatic shift in Europe’s defense policy have led to rising optimism around European growth and strong outperformance of European assets. But with a quick end to the war increasingly in doubt and the rise in European defense spending likely to take a while at best, what this all really means for growth, markets, and the security landscape in Europe and beyond is Top of Mind. We ask Russia watcher Thomas Graham if a quick, enduring end to the war is probable (No), and former NATO Assistant Secretary General for Defense Investment Camille Grand if the recent shift in European defense policy represents a sea change (Yes). We conclude that higher defense spending should eventually boost European growth, and argue that European equities have further to run, but that risks around the Euro and Bunds are more two-sided, especially given tariff risks.”
Morten W. Langer
