European Leaders Pledge €800 Billion for Military Spending, Ferragamo Plunged 15%

Bridgette Randall
07 Mar, 2025
London

Market sentiment on European bourses was weak amid persistent geopolitical uncertainty, and the euro booked its best weekly gain in 16 years. 

Benchmark indexes in Frankfurt and Paris fell more than 1%, and they in Milan and London declined 0.5%, as ongoing uncertainty surrounding U.S. trade policy weighed.

European leaders reaffirmed their military and financial support for Ukraine in an emergency meeting on Thursday. 

A coalition of 27 nations, led by France and the UK, announced their commitment to provide multi-billion euros in military assistance over the coming months. 

A summit of the European Council approved the ReArm Europe plan with an expected investment of €800 billion.

Earlier in the week, Friedrich Merz, leader of the CDU party and the likely Chancellor of the new coalition government, proposed to set up a 500 billion fund. 

The German fund will provide capital for domestic infrastructure projects and spend for arms, which could be provided to Ukraine's military. 

Defense stocks continued to stay near record highs amid expectations that Germany, France, and the UK will accelerate military spending after the U.S. announced its unwillingness to provide assistance to Ukraine. 

 

Europe Stock Movers 

Luxury goods stocks fell sharply after Salvatore Ferragamo SpA unexpectedly announced losses in 2024. 

Ferragamo SA dropped 15% to €6.33 after the Italian luxury apparel, footwear, and accessories company's sales declined 10.5% to €1.03 billion.

Zalando SE decreased 1.8% to €32.52 after the German online apparel retailer confirmed it secured 90% of the share capital of About You in its public takeover offer. 

Vivendi SE rose 2.4% to €2.91, and the diversified French conglomerate reported a €6 billion loss in 2024 after a four-way spinoff late last year.

Flughafen Zurich AG declined 3% to CHF 210.80 after the parent company of Zurich airport's 2025 outlook fell short of investors' expectations.

Air France KLM SA declined 6.7% to €11.33 and reversed gains in the previous session, after the airline group reported narrower-than-expected losses in 2024.