The UK, France and Germany have launched a $50 billion NATO initiative to accelerate the development of long-range strike weapons without US involvement, as Europe looks to close a capability gap where Russia remains well ahead. The program is expected to bring together European allies over the next decade to develop precision systems capable of hitting targets more than 2,000 kilometers away. Investors may view the move as another sign that European defense spending is shifting from broad commitments toward larger, more coordinated industrial programs.
Europe currently relies mainly on Germany's Taurus missile and the British-French Storm Shadow/SCALP cruise missile, both of which can reach targets up to 500 kilometers away. Supplies have become a concern after Storm Shadow and SCALP donations to Ukraine reduced available inventories, while Kyiv has used those weapons to strike Russian energy and military production sites. The long-range shortage has become more pressing for NATO as Russia continues to use large numbers of conventional long-range strike weapons in Ukraine, and after US President Donald Trump cancelled the planned deployment of BGM-109 Tomahawk missiles in Germany.
The initiative is expected to coordinate existing efforts, including a UK-Germany precision strike pact and MBDA's Stratus, the UK-French successor to Storm Shadow, while its relationship with the separate European Long-Range Strike Approach remains unclear. NATO members also announced $54 billion in industry deals, including $26 billion for integrated air and missile defenses, and the Netherlands and UK signed a 2.4 billion agreement to produce new amphibious transport ships. At the same time, the UK is still joining Lockheed Martin Corp. NYSE:LMT, a US defense contractor, in its Precision Strike Missile program, which is expected to give the British Army a supersonic ballistic missile capable of hitting targets up to 500 kilometers away, with first delivery expected next year.