Yuri Kobzar16:20, 19.08.24

On average, the decline is around 3.4%, with German companies suffering the most.

Shares of German and some other European defense companies plummeted after news emerged that the German government plans to significantly cut military aid to Ukraine , Bloomberg reports .

Thus, shares of Germany’s largest defense concern Rheinmetall AG fell in price by 5.1%. Hensoldt AG lost 7.6% of its share value at its peak, but then a partial correction occurred. Norwegian Kongsberg Gruppen ASA fell by 4%.

Overall, a basket of European defense-related stocks tracked by Goldman Sachs Group Inc. fell 3.4%, though its overall gain since the start of the year remains an impressive 46%.

A Rheinmetall spokesman declined to comment on the German government’s budget plans, but said the defense company itself would continue its close strategic partnership with Ukraine. Rheinmetall also noted that its clients include other NATO and EU member states, not just the government of Olaf Scholz.

Germany Plans to Sharply Cut Spending on Aid to Ukraine

As UNIAN wrote, the German media recently reported that Olaf Scholz’s government plans to sharply reduce spending on military aid to Ukraine . In particular, next year they will spend half as much on these purposes as they did this year. And in the future, spending will be cut tenfold.

Scholz hopes that the burden of these costs can be shifted to a G7 program that would take money from the proceeds of frozen Russian assets. However, this mechanism has not yet been launched, and it is not clear whether it will be launched.

It is also reported that this year the Scholz government has already stopped paying for additional emergency needs of the Ukrainian Armed Forces, such as equipment repairs. Money is only allocated for what was originally planned.

(C)UNIAN 2024