The Rise of the ‘De-Risking State’: How Europe’s €200bn+ Defence Finance Shift is Unlocking New Asset Classes (2025–2030)
Germany’s launch of the Deutschlandfonds on 18 December 2025 is a material signal of the country’s shift towards balance-sheet de-risking for strategic industrial investment, including defence technology. The initiative is structured as a €30 billion envelope implemented via KfW and designed to crowd in private capital through a mix of guarantees, loans and equity instruments, with the stated objective of mobilising substantially larger volumes of private investment. This national move sits alongside the EU’s SAFE framework, which provides an EU-level loan facility of up to €150 billion to support Member States’ eligible defence procurement, particularly where joint procurement and industrial conditions are met. Taken together, these instruments do not replace procurement budgets; they change the financing layer by reducing execution and credit frictions for projects that require rapid scale-up in dual-use technology and industrial capacity. The report maps how this evolving combination of national promotional-bank tools and EU-level loan finance is reshaping the bankability and sequencing of defence-industrial investment decisions over the 2026–2030 period.