European defence stocks rise, output not so much

So much for the “peace dividend”. European defence stocks have been climbing steadily since Russia’s invasion of Ukraine in February 2022 and war in the Middle East has given them another boost. Shares in Germany’s Rheinmetall, the UK’s BAE Systems, France’s Thales and Italy’s Leonardo all jumped between 2.3 and 3.8 per cent yesterday. Whether any of them will make Europe more secure is a separate question. A recent investigation found that EU-based ammunition production was “vastly overstated”. Thierry Breton, the former EU internal market commissioner, has claimed the bloc could produce at least 1.3 million Nato-standard 155 mm shells by the end of the year. Analysis of company orders suggests 400,000 is a more realistic figure. Bain & Company estimates Russia will manufacture or refurbish around 4.5 million shells in 2024.