The EU should not exclude non-European companies from its internal market solely on the basis of their non-European origin <a target="_blank">(Photo: Author)</a>
The EU should not exclude non-European companies from its internal market solely on the basis of their non-European origin (Photo: Author)

EU and the World

EU arms firms’ shares skyrocket, sovereign bonds rise — here’s why

By Judith Arnal,
Madrid
,

There is a well-known saying that Nato was created to keep the United States in, Russia out, and Germany down.

For decades, the US has provided Europe with a military shield, often referred to as ‘Pax Americana’.

However, this arrangement is becoming increasingly fragile, with Donald Trump having increased pressure on European members to raise their defence spending, while also supporting a potential rise in Nato’s defence spending target from two percent to five percent of GDP.

The situation has become even more critical as Trump has taken a more sceptical stance on support for Ukraine while adopting a more conciliatory approach towards Russia.

This critical situation has prompted urgent action from EU authorities.

On 4 March 2025, European Commission president Ursula von der Leyen unveiled the ReArm Europe initiative, aimed at strengthening the EU’s defence capabilities.

The plan is built on five key pillars:

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The EU should not exclude non-European companies from its internal market solely on the basis of their non-European origin (Photo: Author)

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Author Bio

Judith Arnal Judith Arnal is senior research fellow at Fedea, the leading Spanish think-tank in applied economics. She is also a senior research fellow at CEPS and Real Instituto Elcano. She holds a PhD in economics and finance and is a state economist in Spain.