Italy has made it clear that it does not plan to utilize the budgetary flexibility offered by the European Union to boost its defense spending, despite ongoing pressure from the United States to increase military expenditures. This announcement was made by Italian Economy Minister Giancarlo Giorgetti on Sunday, April 13, 2025, following a meeting of EU finance ministers in Warsaw.
The European Commission has proposed allowing member states to increase their defense spending by 1.5% of gross domestic product (GDP) annually for a four-year period, without facing the usual punitive measures that come into play when a government’s deficit exceeds 3% of GDP. However, Giorgetti emphasized that Italy, which is already burdened by significant debt, intends to meet its commitment to raise its defense budget to at least 2% of GDP from approximately 1.5% in 2024, without relying on this flexibility.
During the press briefing, Giorgetti stated, “The goal is not to activate the national rescue clause.” This reflects Italy's cautious approach to fiscal management amid rising economic pressures. The Italian government has pledged to keep its budget deficit under control, aiming to bring it back below the 3% threshold by 2026, even as it has lowered its economic growth forecasts for this year and the next, largely due to uncertainties stemming from American tariffs.
In a broader context, Italy's public debt is projected to rise from 135.3% of GDP last year to 137.6% by 2026, before experiencing a slight decline in subsequent years. This situation places additional pressure on the government to manage its finances prudently while also addressing defense needs.
To facilitate an increase in security spending without breaching budgetary constraints, Italy is considering including funds allocated for military and civil technologies, as well as pensions for retired soldiers, within its defense budget. This strategic move was highlighted in a public financial document released by the Ministry of Treasury earlier this week.
As the European Commission awaits decisions from member states regarding the utilization of the financial flexibility, Giorgetti suggested that it would be prudent to hold off on any decisions until after the upcoming NATO summit in June. He noted, “There is a need for some time to make coordinated decisions; the ideas being proposed in this regard are very diverse.”
Italy's stance on defense spending comes at a time when the geopolitical landscape is shifting, with increased scrutiny on military capabilities and expenditures across Europe. The pressure from the United States to enhance military budgets has been a consistent theme, particularly in the context of NATO commitments and regional security concerns.
Despite the pressures, Italy's government remains focused on balancing its fiscal responsibilities with its defense commitments. This balancing act is crucial as the country navigates through economic challenges while also responding to external security threats.
In summary, while Italy acknowledges the EU's offer of flexibility in defense spending, it is choosing to adhere to its fiscal discipline and long-term commitments. The government's approach underscores a careful consideration of both economic stability and national security priorities.
