Italy requests €8 billion EU defense loan
Italy has formally requested €8 billion in low-cost loans from the EU's SAFE defense fund, scaling back from an initial plan for €14.9 billion.
Italy has requested €8 billion ($9.3 billion) in cheap loans from the European Union's SAFE defense funding program. The decision, confirmed to Defense News on Wednesday by a source familiar with talks, marks a reduction from original plans to seek €14.9 billion.
Prime Minister Giorgia Meloni's right-wing coalition government hesitated for months over the loans. The EU offers them to help member states improve military readiness after Russia's invasion of Ukraine and amid demands from former U.S. President Donald Trump for higher NATO spending.
Meloni previously suggested Italy would not take the loans. The League party, part of her ruling coalition, argued public spending should be prioritized over defense. Opposition parties and many Italian voters share this view ahead of national elections next year.
Original Procurement Plans
When Italy first considered applying for loans from the bloc's €150 billion SAFE fund, it planned to spend on specific programs. These included new Lynx armored fighting vehicles and Panther tanks that Italian defense firm Leonardo is building with Germany's Rheinmetall for the Italian army.
That wider procurement deal is worth €23 billion. It envisages the delivery of 1,050 Lynx vehicles and 272 Panther tanks.
| Item | Quantity |
|---|---|
| Lynx armored fighting vehicles | 1,050 |
| Panther tanks | 272 |
In July, Defense Minister Guido Crosetto said Italy would cut 18% in costs from this program. This suggested possible delays and reductions in order numbers.
Shifting Spending Priorities
Speaking at last month's NATO summit in Turkey, Meloni questioned traditional heavy investments. "Today, what we are seeing in Ukraine is that a tank worth millions can be destroyed by a drone worth 20,000 euros, and that a person trained to fly drones remotely can be more lethal than a sniper," she said. "A reflection is therefore needed on how we invest."
Italy's reported defense spending has increased, but the classification of expenditures is key. Last year, Italy said it pushed defense spending from 1.54% of GDP to around 2% by reconfiguring existing expenditures as defense spending.
At the NATO summit, Meloni said spending rose to 2.8% in 2026. However, she noted the rise is mainly accounted for by spending on domestic security rather than traditional defense programs. The final loan amount reflects an ongoing debate within Italy about the scale and nature of its military investments.
