Headlines
Italy calls on EU to allow deficit leeway for defence spend over 20-30 years
Published by Global Banking & Finance Review®
Posted on June 4, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on June 4, 2025
2 min readLast updated: January 23, 2026
Italy seeks EU approval to extend deficit flexibility for defence spending over 20-30 years, beyond the current 4-year proposal.
By Angelo Amante and Giuseppe Fonte
ROME (Reuters) -The European Union should allow member states to spread out potentially wider fiscal deficits linked to higher national defence spending up to 30 years from the four currently proposed, Italy's defence minister said on Wednesday.
There is growing pressure in Europe to boost military spending to deter a potential attack from Russia and become less dependent on the United States for security, with Brussels announcing a plan earlier this year to mobilise some 800 billion euros ($910 billion).
As part of this push, the European Commission has proposed allowing member states to raise defence spending by 1.5% of gross domestic product each year for four years without any disciplinary steps that would normally kick in once a deficit is more than 3% of GDP.
"I think (the plan) is useful because it allows you to invest in defence during a dramatic time like this without affecting other important expenses, such as social spending. However, it should be spread over 20-30 years," Defence Minister Guido Crosetto told broadcaster SkyTG24.
Italy has projected that its public debt will rise to almost 138% of GDP in 2026 before edging down the following year.
"We do not want to make expenditures that we will offload onto a government that might come after ours in four years," said Crosetto, a member of Prime Minister Giorgia Meloni's right-wing Brothers of Italy party.
"The 4 to 5 years are too few for us," he said.
Economy Minister Giancarlo Giorgetti said in April that Italy wanted to wait for the outcome of the NATO summit scheduled later in June before deciding whether to use the budget leeway or not.
Twelve countries have so far applied.
Italian officials have however said that tapping the scheme would set back Italy's plan to bring its deficit below the 3% of GDP ceiling in 2026, from 3.8% in 2024, a commitment that has helped strengthen investor confidence.
($1 = 0.8783 euros)
(Reporting by Angelo Amante and Giuseppe Fonte; Editing by Rachna Uppal)
Italy is calling on the EU to allow member states to spread out potentially wider fiscal deficits linked to increased national defence spending over a period of up to 30 years.
There is growing pressure in Europe to boost military spending to deter potential attacks from Russia and to reduce dependency on the United States for security.
Italy has projected that its public debt will rise to almost 138% of GDP in 2026 before edging down the following year.
So far, twelve countries have applied for the scheme that allows increased defence spending without immediate fiscal discipline.
Italian officials have stated that tapping into the proposed scheme would delay Italy's plan to reduce its deficit below the 3% of GDP ceiling in 2026.
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