PARIS --- After hesitating for a year amid bickering between the two leading parties of the governing coalition of Prime Minister Giuseppe Conte, Italy’s Ministry of Economic Development (MiSE) yesterday announced that it would invest, jointly with the Ministry of Defense, an additional €7.2 billion through 2032 to support the defense industry and modernize the armed forces.
The new funds were, surprisingly, announced during a roundtable meeting at the Ministry of Economic Development called to rescue Iveco Defence Vehicles, a private company which is one of Italy’s major manufacturers of military vehicles.
The additional funding will notably allow the Italian Army to order the VBM Freccia 8x8 infantry combat vehicle and the Centauro II 8x8 tank destroyer, and thereby ensure the financial stability of Iveco Defense Vehicles, which manufactures both vehicles through a joint venture with OTO-Melara.
These two programs will receive €2.2 billion over the next 12 years, funding the production of 156 VBM and 64 Centauro 2s, at a cost of €1.5 billion and €740 million respectively. These prices include integrated logistic support.
The new funds will be in addition to the annual defense budgets voted by Parliament. Italy has traditionally budgeted relatively low annual budgets for equipment procurement, while financing large acquisitions through special, multiyear funds paid by several government departments.
"MiSE confirms its full support for the Ministry of Defense's work on investments in the country’s strategic realities, and effectively renews its commitment to define an industrial policy capable of ensuring the competitiveness and growth of the entire Italian productive fabric,” said Carmine America, advisor for security and international relations to Luigi Di Maio, Minister of Economic Development and Deputy Prime Minister.
Yesterday’s agreement was unexpected because of continuing infighting on defense spending between Deputy Prime Minister Luigi Di Maio and defense minister Elisabetta Trenta, both members of the Five Star party, and their political opponent and coalition partner, Lega chief Matteo Salvini, the other Deputy Prime Minister.
Five Stars prefer spending on social programs rather than on defense, and had notably promised they would cut spending on the F-35 fighter program, while Salvini supports both the F-35 and military spending, and the technology, employment and tax benefits that come with them.
It is not yet clear what level of funding will be retained for the F-35 program, on which Italy has been dragging its feet since the present government took office last July, but for military aircraft the defense fund approved yesterday only provides for the Mid-Life Update of the Tornado strike aircraft and of the Eurofighter, known as the F-2000 in Italian service.
The other programs that will be funded under today’s agreement include the M-345 jet trainer, for which Leonardo announced yesterday that it had received a €300 million order from the Italian Air Force; the Leonardo HH-101 Combat Search And Rescue helicopter; the major upgrade of the naval and ground variants of the FSAF air-defense system to the B1-NT standard, which will have a significant anti-missile capability.
Also due to be funded are the NH90 helicopter, the U212 NSF submarines, the Teseo Mk 2 anti-ship missile, but the details of funding for individual programs has not yet been released.