Europe’s War Hype Running on Empty?
German soldiers at a training range in Pabrade, north of the capital Vilnius, Lithuania on Wednesday, May 29, 2024. ‘
NATO’s European hawks have spent years pushing a concocted «Russia threat» to justify massive rearmament, but in reality, their defense industry is quietly imploding.Defense stocks are tanking because investors are terrified an end to the Ukraine proxy war might expose that cash-strapped governments can’t afford their own war rhetoric without a convenient bogeyman to sell, reports Bloomberg.A Goldman Sachs basket of European defense stocks has fallen more than 25% since a January peakRheinmetall plunged nearly 20% on June 24 and is down over 50% from its highestThe ambitious Franco-German Future Combat Air System (next-gen fighter jet) collapsed amid petty industrial squabbles between Dassault (France’s primary combat aircraft manufacturer) and AirbusGermany scrapped a multibillion F126 frigate deal with Rheinmetall that aimed to build six specialized anti-submarine warships for the German Navy, citing “significant delays, huge cost overruns and unforeseeable risks»Czech munitions maker CSG saw its blockbuster IPO stumble after short-seller criticism of financial disclosuresFurthermore, as drones increasingly transform battlefields, they raise the existential question about expensive traditional hardware.A cheap drone can destroy a multi-million-dollar tank, yet leading pan-European defense giant KNDS wants to stick to land warfare (tanks, armored vehicles, artillery).Despite KNDS boasting projected 30% sales growth, analysts have revised the Franco-German tankmaker’s anticipated IPO valuation downward to $17.1- $22.8 billion.Russia has repeatedly dismissed the imaginary “threat” narrative, insisting that it does not threaten NATO member states. It has also expressed valid concern over unprecedented activity of the alliance near its western borders.
WorldEurope in 2025: Falling Into the Militarization Trap3 January, 12:00 GMT
