After Italy recently signaled a waiver or at least a reduced need for cheap loans for arms projects under the EU SAFE program, there is now a new twist from Rome: According to a Reuters report from last week, the Italian government officially applied for access to eight billion euros by letter to the European Commission. Originally, 14.9 billion euros were reserved for the country. At the end of May, it had still indicated that it might use only four to five. At times, a complete waiver was also discussed.
According to Reuters, the background is a dispute within the governing coalition between Interior Minister Matteo Salvini of the euroskeptic and Russia-friendly League and Defense Minister Guido Crosetto of Prime Minister Giorgia Meloni’s Fratelli d’Italia party over participation in SAFE. Ultimately, it is about a directional decision ahead of next year’s elections. The Meloni government has been under pressure since a surprise referendum defeat on judicial reform in March. Although the government’s core project was considered popular, about 54 percent of voters opposed it, which was seen as an expression of general discontent.
Italy plans to expand its defense capabilities
Prime Minister Meloni has since stressed the importance of domestic spending to reduce the cost of living and, in particular, the effects of oil price increases caused by the Iran war. Individual government members apparently pursued different political interests for or against an increase in defense spending on this issue. As recently as last year, Italy, like many European NATO states, presented plans to expand its defense capabilities, including the use of SAFE.
Among other things, it involved expanding the armed forces by 40,000 personnel by 2033, the procurement of the KF51 Panther main battle tank and the Lynx infantry fighting vehicle. With the eight-billion-euro request, a compromise now seems to have been found. If Italy uses less money than planned, more would be available for other interested countries from the fund totaling 150 billion euros. In total, 19 countries have applied for SAFE loans. Five EU member states have already signed corresponding agreements, and Poland received 6.6 billion euros on May 29 as the first country.
