Europe’s strategic autonomy agenda is evolving into a multi-year investment cycle, with capital being allocated towards defence, energy security, AI infrastructure and industrial renewal. Private and public debt markets are playing an increasingly important role in financing capital expenditure across the region, while also broadening the investor base.
Europe is entering a new growth regime, as the factors on which its economic model has historically depended, including Russian energy and US security guarantees, are no longer as reliable as they once were. Capital is now flowing into European strategic autonomy themes, including defence, technology and infrastructure, with significant opportunities linked to the refurbishment and modernisation of ageing assets.
These represent a supportive backdrop for investments, as such opportunities tend to be more predictable than new-built investments. In addition, policy is increasingly aligned with the objective of supporting Europe’s long-term competitiveness, with several initiatives moving in the right direction, even if execution timelines remain uneven.
Strong impact of German fiscal spending on growth
Bundesbank GDP forecasts & estimate of impact from fiscal spending on real GDP growth
Europe is a capex revival story
“Europe’s long-term opportunities outweigh the short-term challenges. Defence and security spending, alongside investment in electrification and AI infrastructure, are clear areas of momentum as Europe pivots towards strategic autonomy. Private markets are also seeing substantial capital flows, marking another long-term growth story.”
The likely beneficiaries of Europe’s long-term growth story are companies and financial platforms that help build strategic capacity across defence, grids, storage, capital goods, infrastructure and private markets.
By contrast, more consumption-led sectors may lag unless they benefit indirectly from public investment and supply-chain reshoring.
Energy-intensive sectors such as transport may come under pressure, while oil and gas prices may stay elevated, with weaker earnings already reflected in valuations.
| Defence and security | Defence, aerospace and cybersecurity |
| Electrification and grid modernisation | Grid operators, equipment manufacturers and utilities |
| Reducing dependence on foreign suppliers and rebuilding industrial capacity | Capital goods companies, infrastructure contractors, European semiconductors |
| Mobilising investment and deepening European capital markets | Banks, private debt, infrastructure funds and blended finance structures. In fixed income, European peripheral bonds and investment-grade corporates |
Source: Amundi Investment Institute Mid-Year Outlook 2026, “Power of endurance”, June 2026.
* Diversification does not guarantee a profit or protect against a loss.
Views and opinions are as of end June 2026 and are subject to change without prior notice
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 20 July 2026. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: 20 July 2026
Doc ID: 5728517
