The Rise of the ‘De-Risking State’: How Europe’s €200bn+ Defence Finance Shift is Unlocking New Asset Classes (2025–2030)
The official launch of Germany’s Deutschlandfonds yesterday serves as the definitive signal of a structural break in European defence finance. By deploying €30 billion in state guarantees to mobilise private capital, Berlin has synchronized with the EU’s massive SAFE loan facility to fully operationalise the "De-Risking State." This shift moves beyond simple budgetary increases; it represents a sophisticated financial engineering strategy where governments deploy sovereign balance sheets to absorb the specific execution risks of rearmament. From KfW’s new leverage mechanisms to Bpifrance’s equity continuum and the EIB’s strategic lending pivot, we trace the emergence of a coordinated €200 billion financial architecture. This report maps how these diverse instruments converge to fundamentally alter the capital stack for dual-use technology and industrial infrastructure, effectively converting volatile defence supply chains into structured, investment-grade asset classes for the 2026–2030 cycle.