Military salaries are also included in the flexibility measures for defence

Although scaled back compared with the August projections following the revision of the plans after the 2025 deficit was confirmed at 3.1 per cent, the defence section of the Pact’s safeguard clause will nevertheless have to be applied across the board. It will therefore also be required to address expenditure already provided for in the public budget, including personnel costs.
This is made clear in the report on the deviation, approved by the Government on Thursday evening during the Council of Ministers meeting which examined the new budgetary programme.

The measures, as stated in the brief summary provided in the text – which is to be approved by both Houses by an absolute majority of their members – will concern ‘the capital component, aimed at implementing and refinancing multi-year investment programmes’. However, the ‘current expenditure component, with particular reference to staff, day-to-day operations and operational requirements’ will not be overlooked.
Forced by financial constraints and political imperatives to be reduced to the same level as the extra-deficit allocation earmarked for energy, the portion allocated to defence under the safeguard clause will fund expenditure of 7.2 billion in 2027 and the same amount in 2028, losing a further 7.2 billion in the latter of the two years compared with the summer projections.

It will, however, be up to her to include, within the derogation from the EU Pact, a portion of expenditure already factored in by the budgetary measures of recent years. As the Public Finance Policy Document points out, these alone ‘show a significant increase compared with 2024’. And this increase, ‘excluded from the indicator, would bring the rate of growth in net expenditure back within the recommended limit’.
The issue is technical, but it has political significance. Alongside the deficit that has caused a stir in recent weeks following Istat’s figures showing that the 3 per cent target would not be met in 2025, the new EU fiscal governance framework has established the net expenditure trajectory parameter, which requires each Member State to comply with annual and cumulative growth limits designed to ensure the sustainability of public debt. Next year, fuelled by inflation driving up pension costs and the universal basic income, Italia – according to the government’s calculations – would exceed the ceiling set in the 2024 Structural Budget Plan. Unless, that is, a portion of this expenditure is transferred to the national safeguard clause, which excludes it from the calculations regarding the expenditure trajectory.

It should be noted that this accounting manoeuvre will account for a small fraction of the three decimal places of GDP per annum allocated by the safeguard clause to security and armaments. Although it is not entirely clear, at present, where the line is drawn between expenditure that is actually added and that which is merely reclassified.
In 2027, the first year the clause comes into effect, the breakdown is expected to consist of two-thirds additional commitments and one-third reclassified expenditure. These ‘additional increases in defence spending compared with the baseline scenario’, explains the DEF, ‘would also rise in 2028’; by which time, incidentally, the budgetary constraints appear somewhat less stifling.
The current expenditure affected by the safeguard clause will also be a minority, with greater focus on capital expenditure, from which the Government expects knock-on effects on ‘the mobilisation of private investment and job creation’.
But budgetary pressures are at least as pressing as geopolitical risks, and even more so from the perspective of large sections of the majority who are concerned about the negative impact on public support caused by increased defence spending: always unpopular, but all the more so on the eve of an election dominated by rising prices.