Strategic autonomy is no longer aspirational for Europe; it is essential. The recently fractured global order has exposed Europe’s dependencies on US military support, Asian manufacturing and Russian energy.
Transitioning to greater self-reliance will take most of a generation but autonomy alone will not drive returns. Europe must also regain its competitive edge in innovation, productivity and capital efficiency.
Even amid current political challenges, Europe remains strong enough to stand independently and compete with other global powers. For investors, Mario Draghi’s recent report on the future of European competitiveness highlights the immense opportunity: closing the competitiveness gap with the US will require €800bn in annual investment through 2030.
Encouragingly, we are beginning to see quiet but meaningful momentum, with public and private capital flowing into key sectors. At Nordea Asset Management, we believe this shift has created a unique window of opportunity for investors across three core pillars.
Energy resilience
Europe is accelerating investment in critical infrastructure and energy systems to reduce external dependencies and strengthen long-term supply stability. Supported by the €300bn REPowerEU plan, these efforts include modernising power grids, increasing domestic resource recovery, upgrading inefficient building stock and securing access to essential raw materials – all key components of a more self-sufficient and resilient energy landscape.
Green construction and renovation will be central to improving energy resilience, as buildings consume around 40% of the EU’s energy and account for 36% of emissions.
Danish group Rockwool, a leader in stone-wool insulation, is investing heavily in R&D to accelerate product innovation and is constructing new facilities to expand capacity. With roughly 75% of Europe’s buildings still inefficient, the growth runway in this space remains long.
Elsewhere, Italian cables and telecommunications manufacturer Prysmian plays a pivotal role in modernising the infrastructure underpinning Europe’s energy security.
As a leader in its field with a strong order backlog, Prysmian offers solid revenue visibility and trades at an attractive valuation relative to peers, despite superior profitability.
Reshoring production
Europe is rebuilding its industrial base with a renewed focus on automation, robotics, and operational control. Significant investment in machinery, R&D and intellectual property will be vital to restoring competitiveness, and the EU has earmarked about €100bn in reshoring incentives through 2030.
As the EU currently imports around 15% of its steel, the sector remains a strategic vulnerability. Danieli, the Italian supplier of equipment and plants for the metals industry, is at the forefront of bringing steel production back to Europe.
The company maintains a strong competitive edge through continuous investment in steel technologies and process innovation.
German multinational Siemens is another key enabler of Europe’s industrial transformation. As a leader in electrification, automation and digitalisation, Siemens is helping to reduce reliance on foreign technology providers. Despite its strategic importance, the company trades at a discount to peers.
With 60% of revenues coming from structural growth areas and steady cashflows, Siemens represents a resilient long-term growth story.
Defence and cybersecurity
While NATO remains indispensable, recent events have underscored the risks of overreliance on external partners. In response, the €800bn ReArm Europe plan aims to strengthen defence capabilities through investment in dual-use civil and military technologies, cybersecurity and modern equipment.
With NATO recommending defence spending of 3-5% of GDP – equivalent to €350bn annually across Europe – strategic autonomy has become a top priority.
Danish mid-cap Invisio, a trusted supplier to NATO and EU forces, offers proprietary technology for secure communications. With strong earnings, high margins and additional growth potential through new product lines, Invisio stands to benefit further as the European Defence Fund allocates €8bn for next-generation technologies by 2027.
Norwegian advanced-technology group Kongsberg is another European innovator, with leading positions across defence, maritime and aerospace systems.
Despite trading on an elevated 35x price-to-earnings (P/E) ratio, the stock remains appealing given its multi-year growth prospects as Europe addresses its structural defence deficiencies.
Hilde Jenssen is head of fundamental equities and co-portfolio manager of Nordea’s Empower Europe strategy. The views expressed above should not be taken as investment advice.