Italy to request EU defense loan after all, but scales back amount

ROME — Italy has requested €8 billion euros ($9.3 billion) in cheap loans from the European Union’s SAFE defense funding program after delaying a decision for months amid opposition to the plan from within the Italian government.

The late decision marks a step back from original plans to tap the scheme for €14.9 billion euros in loans for defense procurement.

Italy’s right-wing government led by Giorgia Meloni has hesitated over the low-cost loans, which are being offered by the EU to help member states beef up military readiness in the wake of Russia’s invasion of Ukraine and President Trump’s demands that NATO members spend more on defense.

Meloni herself suggested Italy would not take out the loans as the League party - a member of her ruling coalition - said public spending should be prioritized over defense spending.

That view is shared by opposition parties as well as a sizable number of Italian voters ahead of national elections next year.

The decision to apply for €8 billion in loans was confirmed to Defense News on Wednesday by a source knowledgeable of talks with the EU.

When Italy first considered applying for loans from the bloc’s €150 billion SAFE warchest it planned to spend cash on programs including new Lynx armored fighting vehicles and Panther tanks that local defense firm Leonardo is building for the Italian army with Germany’s Rheinmetall.

The deal envisages the delivery of 1,050 Lynx vehicles and 272 Panther tanks as part of a €23 billion euro deal.

In July, Italian defense minister Guido Crosetto said Italy would however cut 18% in costs from the program, suggesting possible delays and order number reductions.

Speaking at last month’s NATO summit in Turkey, Meloni said, “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. A reflection is therefore needed on how we invest.”

Last year, Italy said it pushed defense spending from 1.54% of GDP to around %, albeit by reconfiguring existing expenditures as defense spending.

Speaking at the NATO summit, Meloni said spending rose to 2.8% in 2026, although the rise is mainly accounted for by spending on domestic security rather than defense programs.