The goal of 5% on GDP for defense By 2035 established at the NATO summit will lead to several cuts, an increase in deficit e will also weigh on public debtrisking to affect the sovereign credit profile of the EU countries. This is what emerges from the analysis of the European rating agency Scope Ratings, according to which the increase in military expenditure will lead to an impact on the budget other than state state.
According to the estimates that emerged in the study, the agreement reached among the members of the Atlantic alliance would add 1.3% more every year to the NATO defense. We would therefore pass from the current 360 billion dollars to over 600 billion annualwith different effects for each country also on the basis of margins of issue again debt.
Spending deficits
Among the great European economies, the Germany It scores a deficit for the highest military expenditure in absolute terms. To increase investments in the defense until the previous born of 2%, the German government had to approve a Special fund of 100 billion. Upon his exhaustion, the armaments should be financed with a new one debt emission over 100 billion per year.
Without the new debt, the German government should derive resources from the budget, with an impact of 17% on revenue of the central government, a fee decidedly higher compared to the other European powers.
The expense deficit for the defense of Berlin is beyond double Compared to the 46 billion of Italyof France (45 billion dollars), the United Kingdom (41 billion dollars) and Spain (37 billion dollars).
But according to what the Scope Rings agency underlined, Germany would be among the few EU countries that could face the new requests for NATO expenditure from a tax point of view, together other Member States with AAA rating on the debt or others already close to the goal such as Greece, Poland and Baltic countries.
The impact on debt
Despite the location on the European budget rules, they led to the danger of excessive deficit procedures compared to 3% of GDP, countries such as France, Belgium and Italyalready subjected to excessive deficit procedures, they could heavily be affected by the rearmament born in the path of recovery of public accounts.
According to the provisions of the Scope Ratings agency, the different possibility among the countries of margins more or less wide on public debt, it will lead to a different speed with which NATO Member States will reach the goal of 5% on GDP: if the countries of central-eastern Europe will be able to increase the expenditure for rearmament in advance, countries such as Portugal and Italy and those bound to significant tax stories (such as Belgium and France) they will most likely proceed slower.
The US Navy focuses on Ficantieri
If on the one hand Italy will have to spend for the next ten years, considering the current GDP, between 165 and 220 billion euros On military spending, the armaments race, however, will also be able to lead to a new impulse for the reindustrialization of the tricolor defense sector.
According to what reported by The sun 24 hoursin fact, the American navy would be thinking of the naval shipbuilding giant Fincantieri to expand your fleet.
The group led by Pierroberto Folgiero can count on the locations of the controlled Fincantieri Marine Group (FMG) in the USA, where there are three shipyards, Fincantieri Marine Marine, Fincantieri Bay Shipbuilding and Fincantieri Ace Marine, to win the saleswoman who could soon arrive from Washington.
Last April, Donald Trump has in fact signed an executive order that will increase by 100 units the park of the US military ships and which could represent an excellent opportunity for the Italian naval group.
