logo
Italys Bridge to Nowhere Shows Defense-Boom Risks

Italys Bridge to Nowhere Shows Defense-Boom Risks

Mint07-07-2025
(Bloomberg Opinion) -- The defense boom in Europe is as close to a tech-style gold rush as the Old Continent can offer. Armaments stocks are outperforming Nvidia Corp., and defense-themed funds are amassing billions in anticipation of rising military spending in a more dangerous world. NATO allies have agreed to more than double defense spending goals to 5% of gross domestic product in the coming years.
But with so many countries already struggling to stump up the billions needed to keep up in artificial intelligence, reindustrialization and the energy transition, where's the cash going to come from? With the notable exception of Germany, many European countries are already near the limit of investor and voter patience with borrowing and taxation. And good luck shrinking the welfare state.
Italy, a serial defense under-spender with the second-highest debt ratio in the euro area, has one answer: Stretch the definition of 'defense' to breaking point. Officials are reportedly looking to reclassify a proposed €13.5 billion ($15.8 billion) bridge linking Sicily to the mainland as a defense investment.
You almost have to applaud the chutzpah. This is a bridge that has been a field of political dreams for decades, if not centuries, and attracted plenty of criticism for its cost, lack of utility and riskiness. To say that this is about rearmament is tantamount to defense-washing a pet political project — one beloved by populist Matteo Salvini, who, ironically, is one of the most vocal critics of the North Atlantic Treaty Organization. One MEP from the opposition Five Star Movement called the plan a 'mockery' of military spending.
Of course, this isn't to say that only things that go bang should count as defense. NATO's 5% targets include 1.5% for infrastructure and interoperability. We live in a world of deadly drones, AI and cyberattacks — which require tools other than bullets. And governments want to make sure wide swathes of society benefit from military-spending spillovers, which means casting nets wider than usual. 'Defense is the new Keynesianism,' says Richard Aboulafia, managing director of consultancy AeroDynamic Advisory.
Still, Italy's plan should set alarm bells ringing. Slapping the label 'defense' on national boondoggles would further exacerbate differences between European countries at a time when defense is already too fragmented. It would make Europe weaker, not stronger.
It would also prove Goodhart's Law: When a number becomes a target, it ceases to be a useful measure. NATO's previous 2% targets already included some eyebrow-raising outlays on railways and firefighters, according to Der Spiegel. If this is how the 5% era is set to go, credibility will wither.
Clearer definitions, better coordination and ultimately more leadership are needed to ensure the blurred lines between military and civil infrastructure don't vanish completely. The EUISS think tank recommends focusing on disruptive research and innovation via a European version of Darpa, the US Defense Department's advanced research projects agency, more measures to attract top scientific talent and putting more European funding to work.
And the Bertelsmann Stiftung think tank also says that Germany's unique position as top spender means it should also step up when it comes to the framework for defense-related infrastructure. Nobody wants yet more box-ticking that stops money getting out the door, but voters deserve better than a defense twist on greenwashing.
This isn't about preventing the real economy from getting some of the rewards of a defense boom, but ensuring those spillovers actually happen. Italy has other more positive examples of supporting a more defense-oriented Europe, such as Fincantieri SpA's plan to refocus some shipyards on just making warships. The defense boom is worth celebrating, but a bridge to nowhere isn't a good outcome.
More From Bloomberg Opinion:
This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Lionel Laurent is a Bloomberg Opinion columnist writing about the future of money and the future of Europe. Previously, he was a reporter for Reuters and Forbes.
More stories like this are available on bloomberg.com/opinion
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

San Francisco in Talks With Vanderbilt for Downtown Campus
San Francisco in Talks With Vanderbilt for Downtown Campus

Mint

time20 minutes ago

  • Mint

San Francisco in Talks With Vanderbilt for Downtown Campus

(Bloomberg) -- San Francisco Mayor Daniel Lurie and Vanderbilt University said they're in talks to bring a new campus to the city's struggling downtown. The negotiations, which were reported earlier on Monday by the San Francisco Chronicle, are part of a longtime plan by the city to fill downtown vacancies with university campuses. For Vanderbilt, San Francisco would provide another outpost as it continues to expand beyond its home campus in Nashville. 'We recognize the long-term global leadership of San Francisco and its ever-growing potential, defined by a vibrant culture, dynamic innovation ecosystem and the talent drawn to its leading technology companies and top-caliber arts and cultural institutions,' John O'Brien, a spokesperson for the university, said in a statement. Lurie and Vanderbilt declined to comment on the progress of the negotiations or provide details about the potential school. A new satellite campus could draw more economic activity to San Francisco's urban core, which has been slower to recover from pandemic closures than other cities. London Breed, Lurie's predecessor, proposed establishing a branch of a historically Black university downtown as part of an initiative to reinvigorate the area and draw more residents. Bringing a Vanderbilt campus to San Francisco 'would bring new energy and foot traffic downtown, and we will continue working to make that happen,' Lurie said in a statement. Vanderbilt has been on an expansion streak, announcing plans last year to build hubs in New York City and Florida. In September, the university said it would enter a lease with a seminary to establish a 13-building campus in Manhattan's Chelsea neighborhood. A month earlier, the school proposed a $520 million expansion into West Palm Beach, Florida. Vanderbilt wouldn't be the first elite school to branch out to San Francisco. The Wharton School at the University of Pennsylvania established a presence there in 2001, hosting its first cohort of MBA students. --With assistance from Janet Lorin. (Adds Wharton School in final paragraph) More stories like this are available on

France denounces US-European Union trade deal, French PM calls it..., Emmanuel Macron...
France denounces US-European Union trade deal, French PM calls it..., Emmanuel Macron...

India.com

timean hour ago

  • India.com

France denounces US-European Union trade deal, French PM calls it..., Emmanuel Macron...

(Image: President Donald Trump shakes hands with European Commission chief Ursula von der Leyen in Turnberry. Pic: Reuters) New Delhi: France has criticized Sunday's, July 28 trade deal between US President Donald Trump and European Union (EU) President Ursula von der Leyen. French Prime Minister François Bayrou called it a dark day for the EU. What did France say over US-EU trade deal? François Bayrou said the EU had bowed to President Trump's increasing tariff pressure. He wrote on X: 'It is sad when a coalition of independent countries, formed to protect their common values and interests, buckles under pressure.' At the same time, French Minister of European Affairs Benjamin Haddad said that this situation is not good and the EU should take countermeasures. French Trade Minister Laurent Saint-Martin said, 'Trump only understands the language of power. If we should have taken countermeasures earlier, the deal might have been better.' However, French President Emmanuel Macron has remained silent on the matter. What is the response of Italy and Germany? German Chancellor Friedrich Mertz and Italian Prime Minister Giorgia Meloni welcomed the agreement. European Trade Commissioner Maros Sefcovic called it a 'big step' as it averted a trade war between the USA and Europe. Under the agreement, most goods going from Europe to the US will face a 15% tariff, three times the current 4.8%. However, the 30% tariff was avoided after Trump's threat of August 1. How much of Europe's goods will face 15% tariff? According to the details of the agreement, 70% of goods from Europe will be subject to 15% tariff. This includes cars, medicines and electronics. However, some agricultural products such as aircraft parts, some chemicals, semiconductor equipment and cork will not be subject to tariffs. There will be no tariff on drugs yet, and if there is one in the future, it will not be more than 15%. The EU will buy energy worth 750 billion dollars or about 64 lakh crore rupees from America in the next three years. Along with this, the EU will invest 600 billion dollars i.e. 51 lakh crore rupees in America.

‘Don't Drag Slovakia Into Your Artificial Conflict'
‘Don't Drag Slovakia Into Your Artificial Conflict'

Time of India

timean hour ago

  • Time of India

‘Don't Drag Slovakia Into Your Artificial Conflict'

/ Jul 29, 2025, 01:56AM IST Slovak Prime Minister Robert Fico sharply criticised the Western approach to Russia and Ukraine in a recent video address. He accused European leaders of recklessness and deliberate deception towards Moscow. Fico claimed that some European countries are tired of peace and easily manufacture conflicts, particularly between NATO and Russia. He emphasised that smaller nations like Slovakia want no involvement in such confrontations. While condemning Russia's violation of international law, Fico stressed the importance of understanding the 2014 events in eastern Ukraine and NATO's broken promises. He contrasted Western support for Ukraine with condemnation of Israel's actions in Gaza, calling the Ukraine crisis a greater threat to global peace. Fico also highlighted how Russia's economy is now stronger than Germany's, criticising the EU's sanctions strategy. Despite occasionally opposing sanctions, he remains a vocal critic of the bloc's policy on Russia.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store