MILAN – Italy’s pledges to increase defence spending to help Ukraine could scupper government efforts to rein in the mammoth public debt, analysts say, posing a threat to the creditworthiness of the euro zone’s third-largest economy.
A European Union drive to hike military expenditure, in response to the Trump administration’s moves towards a rapprochement with Russia and warnings that European security can no longer be its primary focus, is set to strain budgets around the bloc.
Italy, however, with its extremely low defence spending, heavy debt load and the euro zone’s highest borrowing costs, is in a particularly difficult position.
Rome currently spends around 1.5% of gross domestic product on defence, one of the lowest levels in the…
