Forget MAGA—this is Europe’s moment to make itself great and independent again!
By Jacob Falkencrone, Global Head of Investment Strategy at Saxo
Europe is rewriting the rules of its economic playbook. From Brussels to Berlin, a remarkable shift is underway—a push to build an independent, resilient, and self-sufficient economy. For investors, this isn’t just another trend to watch from afar; it's a compelling opportunity unfolding right before our eyes.
For decades, Europe was content to rely heavily on partners like the United States and China, but recent shocks from the pandemic, supply chain chaos, the war in Ukraine and strategic realignments have dramatically shaken things up. Suddenly, the buzzword across the continent is "European independence," and it's not just political talk—it's a powerful new investment theme that's beginning to catch fire.
But what exactly does "European independence" mean for the everyday investor, and why should you care? Simply put, it’s about Europe building resilience by relying less on others and more on itself. From defence and energy to tech and consumer goods, this new push for strategic autonomy offers exciting opportunities for investors who are ready to jump aboard early.
Why now? Europe's moment of truth
Think of Europe's economy like a household: if your house was overly dependent on your neighbour for essentials like energy, technology, and security, you'd probably feel vulnerable. Now imagine your neighbour gets unpredictable or aggressive. Suddenly, you'd want to get your own generator, install your own security system, and grow your own vegetables in the garden—fast.
That's pretty much Europe's mindset today. The Russia-Ukraine war was the wake-up call Europe couldn't ignore. Countries like Germany and France are ramping up military spending significantly, shaking off decades of reliance on US military protection. The European Union itself just introduced a EUR 150 billion programme of loans encouraging member countries to buy European-made military equipment instead of American. Ursula von der Leyen, the EU Commission President, has called on Europe to use these loans to build its own defence industry rather than sending money abroad.
But it's not just about military hardware. Europe's push for independence spans energy security, tech innovation, and local manufacturing too. After feeling the pain of disrupted supply chains and energy shortages, Europe wants its own batteries, its own semiconductors, and its own green energy infrastructure.
Big plans from big players: Germany leads the charge
Germany is playing a starring role, committing billions to stimulate Europe's broader economy, boost infrastructure, and promote innovation. This German fiscal stimulus doesn't only help Germany—it ripples out positively to countries across the entire continent. Picture Germany as Europe's locomotive, pulling along economies from Italy to Scandinavia. Investors who recognise this momentum could stand to gain.
Why it’s a big deal for investors
This shift toward independence isn't temporary—it represents a structural change that could power long-term economic growth. For retail investors, that means opportunities abound in sectors expected to benefit from European self-reliance.
Take renewable energy. Europe urgently needs to wean itself off imported fossil fuels, especially given the tense relationship with Russia. Companies that produce wind turbines, solar panels, and energy storage solutions are lining up for significant growth, backed by strong political support and billions of euros in public funding.
Technology and digital infrastructure is another sweet spot. Europe doesn't want its digital future reliant on Chinese or American technology. Expect substantial investment in home-grown solutions like semiconductors, cybersecurity, and cloud services, providing an attractive runway for tech-savvy investors.
Then there’s defence—traditionally dominated by US contractors. European governments are now determined to channel funds into local aerospace and military technology firms, creating fresh opportunities for investors in home-grown defence companies benefiting from multibillion-euro government contracts.
Infrastructure, too, is set for a significant boost. With Germany and others pouring billions into roads, bridges, communications networks, and green infrastructure projects, firms specialising in construction, engineering, and logistics stand to benefit considerably from this renewed spending spree.
Finally, European consumers and governments alike are increasingly favouring domestic brands. It’s economic patriotism with a practical edge. Companies producing products closer to home—from sportswear to food—stand to capture new market share as shoppers pivot toward brands that carry the 'Made in Europe' stamp of confidence.
Balancing excitement with reality: risks to watch
Of course, investing always carries risks, and Europe's independence journey isn't without hurdles. A major risk is that large-scale transitions like these take years to materialise. Costs can mount, regulations can change, and geopolitical shifts can upend the best-laid plans.
Higher defence spending and reshoring production also mean increased government spending and potentially higher debt levels, particularly in already indebted countries. Europe's drive to localise industries previously dominated by efficient global supply chains could lead to higher consumer prices, at least initially. Investors should also keep in mind that some companies—especially in defence—have already seen strong rallies. With prices now elevated and valuations high, future returns might moderate as initial excitement levels off.
There’s also the question of unity. European countries might not always agree on how far or fast to move toward independence. Differences among EU member states could delay initiatives or water down ambitions.
What investors could do
For retail investors, the "European independence" theme offers compelling long-term prospects, but success lies in balancing enthusiasm with patience and careful stock selection. Look to companies with strong European market positions, proven innovation capability, and alignment with sectors receiving major policy backing. Defence, security, renewable energy, tech innovation, infrastructure, and consumer brands with deep European roots look particularly attractive right now.
To help investors navigate this opportunity, we've selected a list of stocks (see the list below) from sectors best positioned to benefit directly from Europe’s shift toward independence. These companies have been chosen based on their sector exposure, market cap, analyst consensus ratings, and their strategic alignment with the theme, providing a valuable starting point for investors looking to position themselves smartly.
The European independence theme isn't about short-term bets or trading headlines—it's about recognising a historic structural shift and positioning your investments to ride the wave. Europe's independence push has staying power, offering the potential for sustained growth.
Ultimately, the story of Europe today is one of resilience and reinvention. Investors who understand this evolving landscape and act accordingly could be setting themselves up nicely for years to come. Europe is boldly striking out on its own path.
Click here to discover Jacob Falkencrone’s European stock watchlist
