Italy’s low defence spending undermines Meloni’s diplomatic panache

Italy’s economic weakness shows

Giorgia Meloni is the top European statesperson of the day. Emmanuel Macron would say otherwise, but the loss of domestic authority in France’s 2024 parliamentary elections made him a glorified foreign minister, no longer a real president. Keir Starmer has no charisma and no imagination. The EU could only have sent Meloni to go and charm Trump.

She’s also the most imposing Italian prime minister on the European stage since the lizardy, deft Bettino Craxi, who partnered with Margaret Thatcher to create the single market in 1986, a legacy his byzantine corruption overshadows.

Meloni has not just pulled off the symbolic stuff, like getting herself invited to the Notre-Dame reopening when the French president despises her and she wasn’t supposed to be there as a non-head of state: A few years ago it would have been impossible to imagine an Italian populist getting the European Commission to endorse overseas processing of asylum claims.

The Italian PM has had an excellent Ukraine war. Depending on your interpretation, she’s taken a robust stance against Russia’s full-scale invasion because she thinks for herself and isn’t inclined to victim-blame Ukraine on the basis that you do that if, like her, you’re a right-wing populist. Alternatively, she’s adopted that position because it was a way of decontaminating her brand and winning room for manoeuvre for her populism within the EU. I’m inclined to think it’s both. Whatever her motivation, it was a masterstroke.

But this is all soft power in a hard world. Beneath all the mutual charming, the only concrete announcement to come out of last month’s White House meeting was a promise that Italy’s defence budget will reach 2 percent of GDP at some unspecified date.

This is embarrassing. Italian defence spending is just 1.49 percent of national output — the third-lowest in NATO behind Canada (1.37 percent) and Spain (1.28 percent). Spain has gone further than Italy by promising a specific date, 2029, to reach 2 percent.

NATO members agreed on the 2 percent target at the 2014 Wales Summit after Russia’s annexation of Crimea. It belongs to that era — when all it took was a bit of intellectual jujitsu for European powerbrokers to convince themselves that Vladimir Putin’s Little Green Men were no big deal, as they clung on to their Fukuyaman reverie. A consensus is emerging that 3 or even 4 percent is needed amid Trump’s desire to jettison US security guarantees.

Unlike booming Spain, Italy can ill afford to ramp up military expenditure. Ever since the Risorgimento, the descriptor “least of the great powers” has encapsulated Italy’s international status.

The Italian economic miracle made that dubious garland look ungenerous, as it transformed the humiliated rural ruins of 1945 into the luminous industrial powerhouse of the 1960s. Italy’s superlative aesthetic tastes combined with the boosts from Marshall Aid and mass urbanisation to wow the West with Fiat 500s and Bertazzoni fridges. Even before the miracle’s full effects had kicked in, the Treaty of Rome launched the European project in 1957, Italy was strong enough to override the other five founders’ scepticism about freedom of movement, enshrining this contentious requirement in the EU’s founding document.

Just like France’s Trentes Glorieuses and Germany’s Wirtschaftswunder, Italy’s miracolo decelerated in the late 1960s and halted in the 1973 oil crisis. Nothing has been the same since.

Italy never reconciled itself to the end of the boom. Galloping growth had obscured the corrosive effects of corruption, clientism and outdated business practices — yet that economic model was too comforting for too many people for Italy to reform. Italy’s public debt mounted through the ’70s and ’80s as Rome tried to restore the miracle.

The idea in the 1990s was that Europe would solve the problem. The single currency would act as the prized vincolo esterno (“external constraint”) to purge the Italian economy of its fiscal laxness and old-fashioned habits. This didn’t happen. Instead the euro gave Italy an exchange rate better suited to northern Europe, while consigning to history the invaluable postwar trick of devaluing the lira to boost exports.

The external constraint has acted all too literally: Italy has been stuck in the same position since the early 1990s. When the Maastricht Treaty was signed in 1993, Italian public debt was just over 130 percent of GDP, subject to high bond yields. It is now just over 130 percent of GDP, subject to high bond yields.

The EU is underwriting some extra borrowing for defence — but given Italy’s debt mountain, even gobbling up cheap bonds would be risky. EU rules allow an extra 1.5 percent of GDP funded through borrowing — yet that will only last for four years, and there is no sign that Italy will be able to sustain it afterwards.

» Why Spain is Europe’s defence laggard

Then there is the question of public opinion. Italy is the only EU country where a mere minority of the public supports extra defence spending.

It says everything that once popular, now flagging big beasts of Italian politics jumped on opposition to rearmament in bids to revive their appeal.

Meloni’s Deputy Prime Minister and League party leader Matteo Salvini was once the top dog on the populist right, until she supplanted him in her 2022 election victory. Now he’s railing against the chimeric prospect of a European army. Likewise, former Five Star Movement prime minister Giuseppe Conte has become an ardent dove.

In pivoting to pacifism, Salvini and Conte are drawing on a potent tradition in Italian political culture. Post-unification Italy was awful at war — from the calamitous attempted invasions of Abyssinia to the collapsing Austro-Hungarian Empire smashing its army at Caporetto to Benito Mussolini’s iniquities follies. As Italy blossomed after 1945, pacifism emerged at the heart of its political culture. The Italian Communist Party was by far the strongest Red outfit in the West, and it had an obvious interest in tamping down any Cold War militarism. The hegemonic Christian Democrats, meanwhile, contained a powerful pacifist strain nourished by Catholic social teaching. Those parties went away, but the pacifist ideal didn’t.

Perhaps Meloni’s strength of personality will chip away at these economic and cultural forces diminishing her ability to act as a European stateswoman defending the continent’s way of life against the Russian menace. Her political adversaries have always underestimated her. But it’s likely that something in her grand foreign policy will have to give.

Photo credit: governo.it, Wikimedia Creative Commons