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Italy has no intention for now of using budget leeway allowed by the European Union to boost its defence spending, its economy minister said on Saturday, despite US pressure to increase military expenditure.
The European Commission has proposed allowing member states to raise defence spending by 1.5 per cent of gross domestic product each year for four years, without any disciplinary steps that normally kick in once a government deficit climbs above 3.0 per cent of GDP.
Highly indebted Italy aims to honour its pledge to boost its domestic defence budget to at least 2.0 per cent of GDP from around 1.5per cent in 2024 without that leeway, Economy Minister Giancarlo Giorgetti told reporters at the end of a meeting of EU finance ministers in Warsaw.
"The goal is not to activate the national escape clause," he said.
The Commission asked member states to decide by April whether to apply for the allowed fiscal room, but Giorgetti said it would be better to wait for the end of an upcoming NATO summit in June before taking any decisions.
"Some time is needed to have coordinate decisions, as ideas on the table are quite diverse in this regard," he added.
On Wednesday, Italy committed to keeping its budget deficit in check and bring it back below the 3.0 per cent ceiling in 2026, even as it slashed its economic growth forecasts for this year and next, amid uncertainty due to US trade tariffs.
However, Rome said the public debt - the second highest in the euro zone after Greece's - was expected to climb from 135.3per cent of GDP last year to 137.6per cent in 2026, before edging down marginally the following year.
To achieve a quick increase in security spending, Italy is considering including money spent for both military and civilian technologies and pensions paid to retired soldiers in its domestic defence budget, the Treasury said in its Document of Public Finance published this week.