To have peace, we must prepare for war

Sir Keir Starmer hosted Volodymyr Zelensky, Emmanuel Macron and Friedrich Merz in London to try to build a European “coalition of the willing” to provide security guarantees for Kyiv, negotiate the terms of any ceasefire (including territorial concessions) and plan financing for postwar reconstruction. The piece warns Europe remains stronger at diplomacy than military action, praises Germany and Chancellor Merz for deploying financial and industrial heft, and cautions against continued reliance on the United States amid ambiguous signals from Washington. It further criticises Britain’s weak defence posture—procurement failures such as the Ajax programme, the Royal Navy’s reduction to seven active frigates and a Budget that offered little new defence funding—and argues the UK must commit to major rearmament to be a credible security partner.

Analysis

Sir Keir Starmer convened Volodymyr Zelensky, Emmanuel Macron and Friedrich Merz in London to explore a European "coalition of the willing" aimed at providing security guarantees to Kyiv, negotiating any ceasefire terms (including possible territorial concessions) and organising postwar reconstruction financing. The meeting signals an effort to ensure European states, not just Moscow and Washington, shape Ukraine's future and the architecture for its security and rebuild.

The article characterises Europe as stronger in diplomacy than military action but highlights Chancellor Merz's prior deployment of Germany's financial and industrial resources to bolster Kyiv and the Bundeswehr. It flags concern that some European states still rely on the United States, noting the Kremlin hailed the new US National Security Strategy as "largely consistent" with its own vision and that President Trump publicly criticised Mr Zelensky, underscoring fraught transatlantic signals.

The piece criticises the UK's defence posture — citing the Ajax procurement debacle, the Royal Navy's reduction to seven active frigates and a Budget that provided virtually no additional defence resources — and calls for major rearmament like Poland, the Baltic states and Germany. Sentiment metrics show a moderately negative tone (sentiment_score -0.4, tone: hawkish) with a modest market_impact_score of 0.28, and no specific tickers were identified in the coverage.

Key Decisions for Investors

• Monitor announcements from EU states and Germany on defence spending and Ukraine reconstruction financing as potential catalysts for European defence and industrial suppliers
• Given the UK Budget's lack of additional defence funding and procurement failures (Ajax; Royal Navy at seven active frigates), avoid increasing exposure to UK-listed defence contractors until clear funding and procurement plans are published
• Maintain hedges against geopolitical escalation and track US policy signals (the new National Security Strategy and presidential statements) because shifts could materially affect market sentiment and capital flows into European assets