German defense group Rheinmetall has posted its biggest share gain in two years amid heated discussions in Europe about increasing defense spending and new measures to support Ukraine, Bloomberg reported.

Financial analysts say the surge in shares is due to a significant increase in military orders, especially from Germany. Rheinmetall shares rose 11% in Frankfurt. If European countries decide to further increase their defense budgets, it could accelerate the company's plans to expand production capacity.

European leaders are currently working on a major package of defense initiatives that will include increased military support for Kyiv. However, the official announcement of these measures is being delayed until after the German elections, scheduled for February 23, to avoid political disputes before the vote.

European countries are growing concerned about security guarantees from the United States. EU leaders fear that the United States could reduce its role in European security, forcing Europe to strengthen its own defense capabilities. These fears were heightened after a phone call between Donald Trump and Vladimir Putin, during which Russia and the United States held talks on ending the war in Ukraine without involving European partners.

Against the backdrop of these events, Rheinmetall CEO Armin Papperger met with Ukrainian President Volodymyr Zelensky. The main topic of discussion was the expansion of the company's presence in Ukraine, in particular the development of joint defense projects. The parties paid particular attention to the issue of the production of 155-mm ammunition, which is critical for the needs of the Ukrainian army.

The growth of Rheinmetall shares is an indicator that European governments are aware of the need to significantly strengthen the defense industry. As the geopolitical situation escalates, Germany's military-industrial complex could play a key role in strengthening Europe's defense capabilities and supporting Ukraine.