How does Italy plan to achieve NATO's objective? - Infrastructure projects, the "key" to increasing the defense budget
Italy has agreed to significantly increase defense spending by 2035, to meet NATO's 5% target. To avoid a shock to public finances, the government aims to include several infrastructure projects in the defense budget.
Italy, along with other NATO countries, has agreed to significantly increase defense spending over the next decade, but Giorgia Meloni's government is looking for creative ways to minimize any hit to public finances.
Unlike Spain, which openly stated that it could not go much beyond NATO's old target of 2% of national output, Italy pledged 5% by 2035.
Italy's defense spending reached just 1.5% of output in 2024, close to the lower limit for the 32-member alliance. But reaching the new target will be much harder. On paper, it would require a cost increase of more than 60 billion euros, a tall order for the country with the second-highest debt in the eurozone, at 135% of output.
The European Commission has approved an "escape clause" from its fiscal rules to allow for growth of 1.5% of gross domestic product per year until 2028. However, Italy has less room to use this clause because its deficit is already considered too high.
Italian officials said Meloni would continue with this year's approach, including items already planned but with little to do with defense in the budget, hoping the tactic would be accepted by NATO and the European Commission. They said Rome is looking at civilian infrastructure, such as ports, shipyards and an ambitious long-planned bridge linking Sicily to the mainland.
Overall, Italy plans to invest 206 billion euros to improve its railways and another 162 billion for roads and highways, according to a parliamentary study based on government data. Many of these projects could now be labeled defense and security.
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