By Angelo Amante and Giuseppe Fonte
ROME (Reuters) -Italy on Wednesday called on the European Union to help allow countries to boost their defence spending without infringing the bloc’s budget rules, as member states grapple with U.S. pressure to pay more for their own security.
Highly indebted Italy is projecting its defence spending will hit 1.61% of gross domestic product (GDP) in 2027. That is below a current 2% NATO alliance target, which U.S. President Donald Trump wants raised to 5%.
Prime Minister Giorgia Meloni welcomed a proposal from European Commission President Ursula von der Leyen to exclude defence from EU limits on government spending, but said that more could be done.
“I think this first step should be followed by other solutions,” Meloni told a press conference in Rome with her Swedish counterpart Ulf Kristersson.
Italy has repeatedly called on the EU to use common debt to pay for higher defence spending – traditionally anathema to the more fiscally conservative northern European EU members such as Germany and the Netherlands.
The country’s Economy Minister Giancarlo Giorgetti said in a statement that Europe should consider a joint initiative similar to the Recovery and Resilience Facility (RRF).
EU authorities launched the RRF to help economic recovery following the COVID-19 pandemic based on a joint debt scheme. Italy is the programme’s single largest beneficiary as it is entitled to 194 billion euros ($204 billion) through 2026.
“Increasing defence spending must be a goal to boost industry and growth,” said the minister, currently attending a meeting of G20 finance officials in Cape Town.
“That is why a Recovery Plan for defence is needed. If each country starts moving independently, costs for the state will inevitably rise irrationally,” added Giorgetti, who according to his office raised the issue during a session with his European counterparts.
In line with the Italian approach, officials have been discussing the possible use for defence of about 90 billion euros of loans and some grants from the EU’s post-pandemic recovery fund that are unlikely to be spent before the 2026 deadline.($1 = 0.9515 euros)
(Reporting by Angelo Amante and Giuseppe Fonte, editing by Philippa Fletcher and Keith Weir)
