The war in Ukraine provoked a boom in the defense industry of Europe - The Economist

Decades of budget reductions and production lines have ended through the Russo-Ukrainian War. In 2022, the cost of the army worldwide grew to $ 2. 2 trillion. The shares of the largest German manufacturer Rheinmetall since the beginning of a full -scale invasion of the Russian Federation into Ukraine have tripled. As a result of the war, a boom in the defense industry is observed in Europe. About it reports The Economist.

After the Cold War, the European countries have reduced defense budgets for decades. The industry was constantly reducing production lines, but the war in Ukraine changed everything. "Defense budgets are changing with the geopolitical threat," said George Zhao from Bernstein. Last year, the world's defense budgets increased by 3. 7% by $ 2. 2 trillion. The greatest increase was in European countries - 13%.

For example, Finland's military budget increased by 36%, Lithuania - 27%, Sweden - 12%, and Poland - 11%. Similarly, Germany abandons its ten -year stinging on military expenditures. The publication states that the defense boom turns into big businesses that receive billions of contracts. In particular, the European MBDA missile manufacturer has received a $ 2. 4 billion contract for the supply of air defense systems to Poland. French Safran sold Greece UAV.

And RheinMetall received a contract worth almost 6 billion euros for the supply of armored vehicles Germany and the Netherlands. Rheinmetall CEO Papperger already says the year will be the most successful in terms of orders. At the same time, it is predicted that demand will continue to continue, because Europe will update its own armies and replenish its own reserves after assistance to Ukraine.

However, there are several problems that manufacturers are distinguished: in the future the situation should be improved because Germany and France plan to reduce bureaucracy. EU countries also improve weapons development. "The war in Ukraine has marked a sharp turn from decades in Europe. For weapons manufacturers on the continent, which were bored during geopolitical lull, it points to a more profitable future," - summarized in the publication.