Over the past three weeks, the US withdrawal from European security and a consequent arms-and-infrastructure fiscal boost for Germany have driven up the euro, along with European equities and interest rates.

Medley Advisors' European analysts, Tim Jones and Pepijn Bergsen, got together to discuss whether this political upheaval justifies the scale of repricing.

"At the end of the day," says Bergsen, "there's a very easy rule of thumb here, which is that those countries closest to Moscow are increasing defence spending while those far away who don't feel threatened politically are in a position that they don't really want to and probably also don't quite have the fiscal space".

Germany will take time to ramp up its spending but it has the space and the urgent need to do so. The eurozone's other big three have their budgetary hands tied, so it will be Poland, the Baltics, and the Nordics rearming in response to US withdrawal.