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Vol 23 (2026) - Issue 2
Article preview
Will Defence Investments Fire up a European Growth Engine?
Minna Kuusisto, Chief Economist, Danske Bank Finland, and Marjo Koivisto, Head of Alternative Investments, Aktia Bank, Helsinki, FinlandSynopsis
Europe is undergoing a historic shift in its security and economic priorities. Defence spending is rising fast, driven by geopolitical instability and a reassessment of Europe’s strategic vulnerabilities. Yet whether this surge can meaningfully boost long-term growth depends on how effectively Europe mobilises capital, allocates it, and aligns defence efforts with broader productivity-enhancing reforms.
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