The peace talks that took place in Berlin last weekend attracted the attention of the world's media.
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US President Donald Trump's special envoy, Steve Witkoff, and his son-in-law, Jared Kushner, participated in the negotiations. During the meeting, Ukrainian President Volodymyr Zelensky signaled that Kiev is ready to give up its ambition to join NATO, which would speed up the end of the conflict.
US officials said a peace agreement was at hand, and Trump himself described the situation as “the closest we have ever come to ending a war.”
Success is not in the hands of the arms industry. The industry is starting to lose
Despite the positive signals coming from the peace talks, representatives of the defense sector warn against an overly optimistic approach. A spokesman for the German company Hensoldt noted that although peace for Ukraine is desirable, the threat to Europe from Russia does not disappear.
“The cessation of hostilities would give Russia the opportunity to rebuild its military potential. From a European security perspective, this threat still exists and may even intensify“- he emphasized.
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Such rhetoric should not be surprising. The peace agreement will have a negative impact on companies that have benefited greatly from the ongoing conflict in recent years. Now this is changing, which is clearly visible by the change in sentiment on the stock exchange, where the prices of defense industry companies have been falling significantly in recent days.
Quotations of defense industry companies in red
The Stoxx Aerospace and Defense Index fell 1.8% on the day. Shares of Swedish Saab recorded a 4.8% increase. decrease. German Rheinmetall and Italian Leonardo also ended the day in the red – by 4.5%, respectively. and 3.9 percent..
Hensoldt, whose involvement in Ukraine accounts for a small part of its revenues, saw its share value decline by 3.6%.
A company spokesman pointed out that its main programs in Germany and Europe are of a long-term nature, and many of them will be implemented even beyond 2026. “Our growth trajectory is based on multi-year contracts, such as equipping German reconnaissance vehicles with advanced technologies as part of the European Sky Shield Initiative,” he explained.
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Renk shares, which had surged an impressive 194% year to date, ended Tuesday down 4.3%.
Despite market difficulties, representatives of the defense sector emphasize that their activities are based on long-term projects that are of key importance for Europe's security.
