Italy's Defense Budget Strategy Faces NATO Expectations

Italy is set to meet NATO's defense spending goal of 2% of GDP this year, as confirmed by Economy Minister Giancarlo Giorgetti. Despite its low projected defense budget, Italy is looking to include previously excluded spending to meet targets, while balancing EU fiscal rules.

Italy will meet NATO's 2% of GDP target for defense spending this year, according to Economy Minister Giancarlo Giorgetti, who addressed a parliamentary hearing on Thursday.

Despite projecting a defense budget of only 1.49% of GDP for 2024—one of NATO's lowest—Italy is facing pressure from the U.S. to increase its expenditure. Giorgetti acknowledged the necessity for higher spending in coming years.

To achieve the 2% goal, Italy plans to adjust its accounting criteria to include civilian technologies and soldiers' pensions as part of defense spending. Though the EU allows for a temporary increase in GDP spending without penalty, Italy, dealing with high debt, opts not to utilize this provision for now.

(With inputs from agencies.)