Italy has 'essential' need to tap EU SAFE scheme, defence minister says

Italy needs to tap the European Union's SAFE fund to boost its military budget, the defence minister said ‌on Wednesday, despite his government's warning that it could drop the scheme unless Brussels eases budget rules on energy spending.

Italy needs to tap the European Union's SAFE fund to boost its military budget, the defence minister said ‌on Wednesday, despite his government's warning that it could drop the scheme unless Brussels eases budget rules on energy spending. The Security Action for Europe instrument is a joint borrowing scheme backed by the EU budget to boost ‌the bloc's defence capabilities and help member states meet the new, more ambitious NATO spending targets.

"The defence (sector) ‌continues to regard it (the fund) as absolutely essential," Defence Minister Guido Crosetto, a senior member of Prime Minister Giorgia Meloni's Brothers of Italy party, told parliament. The defence budget is traditionally low in highly indebted Italy, which last year had expressed interest in accessing the SAFE ⁠to ​fund its spending programmes at ⁠a lower cost.

In contrast to Crosetto, Meloni recently said it would be hard to justify to voters using SAFE loans ⁠to increase military spending unless budget leeway was granted to cushion the impact of rising energy costs caused by the Iran ​war. Italy said last month it might not be able to honour its commitments to boost defence ⁠spending due to the need to counter surging energy prices.

Giving more flexibility for energy-related spending would potentially allow Italy to fund costly ⁠aid ​measures for firms and families worth more than 30 billion euros ($34.8 billion). The EU has so far rebuffed such calls, saying member states should tackle the negative impact of the turmoil in the Middle East ⁠by using existing resources and tools.

Speaking to reporters in parliament, Crosetto acknowledged that Economy Minister Giancarlo Giorgetti needs ⁠greater leeway from the EU ⁠on budget rules to shield the economy from the crisis. "Europe should activate mechanisms to protect its industry, its economy and its citizens at a speed that is ‌not always compatible ‌with Brussels bureaucracy," he said.

($1 = 0.8605 euros)