The international geopolitical crisis and the latest war scenarios can represent risks for the Italian economy. A few hours after the approval of the new objectives of 5% of the GDP for military spending by 2035 at the born summit, the Court of Auditors warns on the “difficult choices“In the matter of defense that Italy is called to do.
An aspect underlined within the report to the equalization judgment for the financial year 2024, in which the accounting judges took stock of the balance of the state coffers.
The report of the Court of Auditors
The coordination president of the sections brought together during the control of the Court of Auditors, Enrico Flaccadoro, analyzed the Forecast on GDP contained in the public finance document, which was considered acceptable in the light of an economic phase under control, however subject to the calculation of the different risks, at the moment “downward” but which could exist in the light of the new war scenario in Iran, with the consequent repercussions on the world economy and its growth.
Variables, as explained by the accounting judge, linked to possible negative developments relating to exchange rates, interest rates and oil prices.
To this context are also added the unknowns determined by the pit and spring of Donald Trump on the US duties.
The international macroeconomic scenario that is the backdrop for the evolution of Italian economy and public finance is deeply characterized by the shock induced by the repeated and contrasting announcements on the increases of duties and the consequent strong volatility of the financial markets
Military spending
To arouse apprehensions on the stability of Italian accounts, considered the deficit of our country, the increase in military expenditure decided in the last born summit, in which the increase was approved to 5% of the GDP on the armaments by 2035 for the 32 countries of the Atlantic alliance.
According to the Prime Minister Giorgia Meloni, it would be a sustainable goal, but for Italy (which only now has hit the previous 2%milestone) the agreement translates into an increase of about the triple of military spending, it par 100 billion a year morefor a total of 400 billion additional.
In his oral indictment, the attorney general of the Court of Auditors, Pio Silvestri, underlined how the aggravation of the international geopolitical panorama bring out the importance of planning, programming and management of defense costs, which require more investments to keep up with the technological development of weapons.
On the other hand, with the risk of an expansion of the Ukrainian Russian conflict to the neighboring countries adhering to NATO, adhesion to the Atlantic alliance Vierpoù requires reflections on the theme of military expenditure.
The prosecutor also stressed that our country will be called to large investments for the construction, both public and private for the construction of a European defense.
For Italy, it will be a matter of making choices in line with participation in international bodies but in any case difficult given the situation of budget deficit still consistent and the context still far from the construction hypothesis of a European defense system
