Why Europe needs to spend big on defence

Europe is reluctantly boosting its military spending now that the peace dividend that followed the Cold War is over. That should create investment opportunities

HMS Queen Elizabeth Leaves Glenmallan For Rosyth
(Image credit: Jeff J Mitchell/Getty Images)

In June this year, the North Atlantic Treaty Organisation (NATO) celebrated its 75th anniversary. A pact that was formed in the aftermath of World War II to counter the threat of the Soviet Union has now outlived its adversary by more than three decades.

In that time, NATO’s role has evolved from the defence of Europe to a much broader purpose, starting with military intervention in the former Yugoslavia in the mid-1990s. Article 5 – the part of the NATO treaty that requires participants to aid any member who is attacked – was evoked for the first (and so far only) time not for a war in Europe, but to deploy troops to Afghanistan after the September 11 attacks on the US. 

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Frederic is an investment analyst. He started his career at JP Morgan in Paris. He has more than ten years of experience investing in private equity and also worked with the 3i debt management team investing in private debt. He is an ACCA member and a CFA charterholder. He graduated from Edhec Business School.