The Munich Security Conference, held from Friday to Sunday, brought together global leaders to address pressing issues, including the ongoing conflict in Ukraine. The event saw a significant shift in narrative regarding Russia's role, largely influenced by US President Donald Trump's call for a swift resolution to the conflict. In light of these discussions, European leaders convened to strategize on regional security and potential support for Ukraine.
On Monday, European defence stocks experienced a notable rally as markets reacted to the conference's outcomes. Italy's Leonardo posted a gain of approximately 5.27% in daily trading, while shares in Germany's Rheinmetall surged by 7.83%. This uptick followed remarks made during the Munich Security Conference, where leaders emphasized the need for enhanced defence measures in response to growing regional tensions.
European leaders are currently crafting a new defence package aimed at bolstering support for Kyiv. While specific details of this package remain undisclosed, Ukrainian President Volodymyr Zelenskyy has been vocal about his desire to establish an "army of Europe." He also stressed that any peace agreement must involve Ukraine in the negotiation process, rejecting any deals made without Ukrainian participation.
Ursula von der Leyen, President of the European Commission, highlighted the current defence expenditure of EU member states, which stands at 2% of their GDP. She proposed that future investments could reach "hundreds of billions of euros" to strengthen the region's military capabilities. Additionally, NATO Secretary General Mark Rutte suggested that the alliance's spending target should exceed 3% of GDP to adequately address emerging threats.
In a related development, US Secretary of State Marco Rubio is set to meet with his Russian counterpart, Sergey Lavrov, in Saudi Arabia this week. This meeting signifies ongoing diplomatic efforts to de-escalate tensions and find a peaceful resolution to the Ukrainian conflict.
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