Italy, along with other NATO members, has recently agreed to increase defense spending sharply over the next decade. However, the government of Prime Minister Giorgia Meloni is already working on ways to minimize any impact on its strained public finances.
Unlike Spain, which openly said it could not go much above the old NATO target of 2% of national output, at a summit last week, Italy toed the line imposed by U.S. President Donald Trump, committing to 5% by 2035 – at least on the surface.
Meloni, aware that opinion polls show raising defense spending is highly unpopular among Italians, sought to reassure them after the NATO summit.
"These are necessary expenses, but we are committed to not diverting even a single euro from the government's other priorities," she told reporters.
Italy's defense spending amounted to just 1.5% of output in 2024, near the low end of the 32 NATO members.
The government this year met the previous 2% target by a raft of accounting changes, factoring in previously excluded items such as soldiers' pensions and the coastguard.
But hitting the new goal will be far more difficult. On paper, it would require an increase in spending of more than 60 billion euros ($71 billion), a huge task for a country with the eurozone's second-largest debt pile, at 135% of output.
The European Commission, which is also urging EU states to hike defense spending, has adopted a so-called "escape clause" from its fiscal rules to allow increases of 1.5% of gross domestic product (GDP) per year through 2028.
Italy, however, has less scope to use this clause because its deficit is already considered too high.
Italian officials said Meloni would double down on this year's approach by including items already budgeted for that have at best a tenuous link to defense, hoping the tactic is accepted by NATO and the European Commission.
Italy, the eurozone's third-largest economy, could prove a litmus test for other NATO countries that have also signed up to the 5% goal but face an uphill struggle to reach it.
Rome is considering civilian infrastructure such as ports, shipyards and even an ambitious, long-planned bridge connecting Sicily to the mainland, officials said.
Overall, Italy plans to invest 206 billion euros in upgrading its railways and an additional 162 billion euros in its roads and motorways, according to a parliamentary study based on government data. Many of these projects could now be classified as defense and security projects.
"A large part of planned infrastructure investments fall within the NATO parameters because they have dual-use applications," Deputy Transport Minister Edoardo Rixi told Reuters.
In response to a Reuters request for comment, the EU Commission said it was for Italy to determine whether an infrastructure's main purpose was military or civilian.
A NATO official said countries must have "a credible path" to achieve their defense spending pledges, and they will provide plans on how they will support increases in their defense investments each year."
In promising remarks for Italy's plans, he added: "We need civilian transportation networks that can support military mobility. As well as tanks, fighters and warships, we need roads, rail and ports."
Italy has already identified necessary strategic infrastructure projects worth a massive 483 billion euros to be completed over the following years, meaning there is no shortage of potential schemes to be included.
The new NATO target includes a core component for defense spending, which must reach 3.5% of GDP by 2035, and a further element on broader security-related investments, worth 1.5%.
Upgrading ports in the northern cities of Trieste and Genoa, as well as a shipbuilding and maintenance hub in nearby La Spezia, would be eligible for meeting NATO criteria, Rixi said.
"If you need to build, repair and maintain military ships as well as transport troops and military equipment, you need to have adequate infrastructure to do so," he said.
Time is also a key factor. With the center-left opposition arguing that defense spending will divert resources from the welfare state, Meloni wants to delay any increases until after the next election, due in 2027, officials said.
"The real challenge for Meloni is not the amount but the timing," said Francesco Galietti, founder of Rome-based political risk think-tank Policy Sonar.
In 2027, Italy will also be able to utilize the EU's fiscal leeway "escape clause fully, provided it achieves a deficit below 3% of GDP in 2026 as planned.
For this reason, Rome successfully lobbied NATO allies to avoid a minimum annual defense spending increase being imposed, an official with knowledge of the negotiations said, adding that Rome was also instrumental in delaying the 5% target year to 2035 from a previously planned 2032.
"The message is clear, Italy will do what it must to meet its NATO commitments, but it will do so in its own time," Galietti said.
