Italy defends budget plan for defense and energy relief

The Italian government has defended its budget maneuvers, which include 14 billion euros allocated to military spending and energy measures. Prime Minister Giorgia Meloni stated that security and energy are interconnected, justifying the defense budget as a response to NATO commitments to reach the 2% GDP threshold. The funds are intended for military personnel salaries, internal security, and defense infrastructure, rather than being diverted from schools or hospitals.

To manage costs, Italy is utilizing the European SAFE fund to spread expenses over the long term. Additionally, the government is using a national safeguard clause to address the energy crisis, allocating approximately 14 billion euros to support vulnerable families and energy-intensive businesses.

The broader budget maneuver involves a 23.5 billion euro package, with 14.4 billion euros in deficit enabled by budget deviations approved by Brussels for energy and defense. A significant portion of the coverage, roughly 5 billion euros or 0.21% of GDP, will be sourced from a levy on the financial sector, including banks and insurance companies. While Economy Minister Giancarlo Giorgetti maintains the levy is sustainable, the measure has caused internal political friction within the ruling coalition, with some members calling for more dialogue and caution regarding the impact on financial institutions.