Rome expects to hold its fiscal deficit to just 3 per cent this year and pare it back further to 2.7 per cent of GDP next year, allowing it to graduate from the EU’s excessive deficit procedures. That, Giorgetti said, would pave the way for Italy to borrow from Brussels’ loans-for-arms programme. Da Financial Times
Testifying about Italy’s 2026 budget in parliament last week, finance minister Giancarlo Giorgetti was coy when pressed on Rome’s defence spending plans. “The government will inform parliament at the beginning of the next fiscal year regarding military spending over the next three years,” he said. But behind the guarded language is a looming fiscal test. Economists warn Italy will face formidable challenges in meeting its Nato defence spending commitments as its government debt heads above Greece’s levels for the first time since before the Eurozone sovereign debt crisis. Under pressure from US President Donald Trump to shoulder more of the cost of their own security, Italy and its fellow Nato members agreed in June to lift core defence spending to 3.5 per cent of GDP by 2035, while devoting an additional 1.5 per cent of GDP per year to strategic infrastructure.
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