Germany¡¯s pledge to massively boost military spending after years of restraint that¡¯s left significant parts of its armed forces with outdated equipment is set to boost Europe¡¯s defense industry and has already sent stocks higher.
Europe¡¯s largest economy will inject €100 billion (?12.9 trillion) into a fund to modernize the German army, Chancellor Olaf Scholz said Sunday in a speech to the lower house of parliament. By 2024, Germany will spend at least 2% of gross domestic product each year on defense, he added, in line with a NATO target the country has consistently failed to meet.
The move sparked gains of as much as 89% for sensor and radar maker Hensoldt AG in early Frankfurt trading, while Rheinmetall AG, a producer of tanks and personnel carriers, soared 49% to a record. French fighter jet maker Dassault Aviation SA jumped as much as 9.2% while service provider Thales SA gained 16%.
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