At the end of the Council of Ministers on Friday 17 October, the one that gave the green light to the 2026 Budget, Minister Giorgetti responded to a question that had left many wondering: where does the money for defense come from? This amounts to 12 billion allocated for military spending, accessible only if Italy overcomes the European infringement procedure.
If this were to happen, the question of where the funds came from remains open. Giancarlo Giorgetti then declared that for defense spending Italy will use two piggy banks: the BTp or the Safe. In particular, the latter is a long-term loan, with a subsidized rate but which must be repaid.
12 billion for defense
Italy will spend 12 billion euros on military spending, in addition to all the other billions already available (around 139 billion euros) over time through infrastructure investments or research plans on technologies such as artificial intelligence or armaments. We have clarified these points in several other articles, but Giancarlo Giorgetti’s statement allows us to directly answer the question of “where do the funds” necessary for military spending come from.
In fact, the Minister of Economy declared that the 12 billion will be financed through two piggy banks. It talks about BTp or Safe, but not the co-presence of both: this aspect is still to be clarified. He also adds that they are working with the national defense giants, therefore Leonardo and Fincantieri, “to seek discussions with European entities for projects that can join the Safe plan”. This last tool should therefore be the one most suited to the government’s needs.
What is Safe?
As briefly summarized by Giorgetti, Safe is a financial instrument of the European Union, similar to the PNRR, which allows states to invest in industrial production in the defense sector through joint procurement.
With this tool, up to 150 billion euros can be requested from interested countries, i.e. those who request and on the basis of national plans. By November 30, the Meloni government will have to send the European Commission the formal request to receive 14.9 billion euros.
Asking for this type of financing would, according to the majority, allow the billions saved from the 2026 budget to be moved towards sectors such as school, healthcare and work.
In the meantime, however, Italy would thus become indebted to Europe, always at a subsidized rate, but in any case with the prospect of having to repay these billions of euros in the future.
All actions to increase military spending
This would not even be the first of the moves made by the Meloni government to try to increase defense spending without having too much of an impact on the sectors that most directly benefit citizens. Suffice it to say that already in July 2025, Italy had expressed interest in making use of the Safe instrument (Security Action for Europe) for an amount of approximately 15 billion euros.
In the 2026 budget plan, however, there is talk of a commitment, in line with what has been agreed at an international level, to increase spending on defense and national security up to 0.5% of GDP by 2028, for a total of 12 billion euros.
Italy has not yet requested the activation of the national escape clause, which allows states to deviate from the requirements of the budgetary framework to finance increased defense spending. This is a clause that covers a period of four years and allows a maximum flexibility of 1.5% of GDP.
