Italy's Defence Dilemma: Balancing Security and Debt

Italy's commitment to increase defence spending could exacerbate its hefty public debt, posing risks to the nation's economic stability. With debt already high, new borrowing or budget cuts are contentious. Political tensions within the government further complicate the path to fulfilling international defence commitments.

Italy's ambitious commitment to boost defence spending as part of a European Union initiative could significantly challenge the government's ongoing efforts to manage the nation's substantial public debt, analysts suggest. Given Italy's status as the European Union's third-largest economy, concerns about its fiscal stability are rising.

The EU's push for increased military expenditure, partly in response to shifting geopolitical ties and security concerns, places Italy in a tricky position due to its low defence spending, significant debt burden, and high borrowing costs. Currently allocating just 1.5% of its GDP to defence, Italy would need to find an additional 30-35 billion euros, raising the percentage to 3% over the next four years, according to the European Commission's recommendations.

This financial strain is compounded by domestic political tensions. Debate over whether and how to enhance the defence budget amid promises to Brussels is intensifying within Prime Minister Giorgia Meloni's coalition government. The issue could potentially destabilize the political equilibrium that has previously supported Italy's economic standing.

(With inputs from agencies.)