Italy pushes for $216B defense plan using EU guarantees

PHOTO CAPTION: An Italian Army paratrooper is seen during a NATO training exercise near Hajdúhadház, Hungary, Nov. 14, 2023. (NATO photo via Flickr)

ROME (Reuters) -     Italy plans to propose to its European partners a guarantee scheme that could potentially trigger investments worth up to 200 billion euros ($216.48 billion) in the defence and aerospace industries, people familiar with the matter said.

Economy Minister Giancarlo Giorgetti will detail the plan at a meeting of European Union finance ministers later on Monday in Brussels, the people said.

The bloc is studying options to boost defence spending through new joint borrowing, existing EU funds and a greater role for the European Investment Bank (EIB), with a view to taking decisions in June.

Italy backs the discussions and is keen to design ways to limit the impact of the defence push on its strained public finances. State guarantees usually impact the budget when they are tapped.

Under the scheme to be proposed by Giorgetti, dubbed the European Security and Industrial Innovation Initiative, some 17 billion euros in European guarantees are expected to trigger 200 billion euros over up to five years, the people said.

($1 = 0.9239 euros)

 (Reporting by Giuseppe Fonte, editing by Gavin Jones)