Back to news

October 29, 2020 | International, Aerospace, Naval, Land, C4ISR, Security, Other Defence

Italy defense budget rebounds despite coronavirus crisis

ROME — Italy has announced a major boost to its defense budget even as the country spends millions of euros battling the devastating effect of COVID-19 on its economy.

Overall defense ministry spending is up 9.6 percent this year to €15.3 billion (U.S. $18.1 billion), with the procurement budget emerging as the big winner as it rises by 26 percent from last year if coupled with top-up spending from the industry ministry.

“This is a very positive budget for the armed forces, especially for procurement during this challenging economic climate,” said Paolo Crippa, a defense analyst at the CESI think tank in Rome.

The figures are included in Italy's 2020 budget, which should have been released in the spring, but was held up by the COVID-19 crisis which hit Italy hard in March and is now threatening the country again.

This year's €15.3 billion defense ministry spending compares to just under €14 billion last year, signaling a halt in a series of year-on-year falls.

Procurement takes up €2.8 billion of the budget, up 50 percent on last year, but for a true picture of Italian procurement spending the annual top-up for domestic procurement provided by the Italian industry ministry must be added, which amounts to €2.64 billion, also up from last year.

The total to spend on procurement therefore comes to €5.45 billion, up 26 percent on last year's €4.32 billion.

Of the other two other spending categories in the ministry budget, Maintenance and Operations rises 23 percent to €2.15 billion, while personnel spending remains stable at €10.4 billion.

“The rise in M&O spending follows claims by generals that cuts were damaging military readiness,” said Crippa.

The budget was drawn up by defense minister Lorenzo Guerini, a member of the center-left Democratic Party which governs in a coalition government with the anti-establishment Five Star party. Since first entering government in 2018, Five Star has softened its anti-military stance, which saw it initially push to scrap the F-35 program.

This year, the F-35 program receives €800 million to help conclude the purchase of the first 28 of Italy's planned 90 aircraft buy. A further €126 million is also budgeted to get the purchase of the next 27 aircraft underway.

Other ongoing programs that get more funding in 2020 include the purchase of 650 new VTLM 2 vehicles – an upgrade of the army Lince vehicle, as well as a mid-life refurbishment for Italy's Storm Shadow missiles and the purchase of T-345 and T-346 jet trainers.

Further programs also getting a dose of regular funding are Italy's new, €1.17 billion LHD vessel the Trieste, a €2 billion acquisition of 150 new Centauro II wheeled tanks and a €974 million purchase of 16 new CH-47F helicopters.

Comparing the total envisaged price tag of some programs in the budget to the price listed in last year's budget reveals costs are rising.

A plan to buy four new U-212 NFS submarines has risen from €2.35 billion to €2.68 billion this year, a hike of over €300 million.

The ongoing purchase of ten PPA naval vessels has risen over €400 million to €4.27 billion.

Some programs appear for the first time in the budget, including two new “DDX” destroyers for the Navy. No money is earmarked in 2020 but €4.5 million is due to be used for a de-risking study beginning in 2021.

A second new entry is a listing for a “multi-mission, multi-sensor” Gulfstream G-550 jet. Without stating how many aircraft Italy plans to order, the budget gives the total price tag of the program as €1.23 billion and states that funding will start in 2021.

The capabilities of the platform listed include command-and-control, “electronic superiority” and “electronic protection of forces.”

An Italian analyst who declined to be named said the program was a reprisal of a long nurtured Italian plan for a sensor platform dubbed JAMMS, which would offer signals intelligence, communications relay and radar capabilities.

The Italian Air Force declined to comment on the program.

An illustration of the aircraft in the budget document resembles Israel's “Shavit” Signals Intelligence Gulfstream.

Italy already flies two Gulfstream 550 Conformal Airborne Early Warning aircraft it purchased from Israel's IAI in 2012 as part of a swap deal under which Israel purchased 30 M-346 trainers from Italian firm Leonardo.

The budget document states that after getting underway, the new program will take onboard future technology advancements and the benefits of “international cooperation accords.”

The analyst said, “There is a plan to buy the platform now since the Gulfstream G550 is going out of production, then add Israeli systems in return for purchases by Israel from Italian industry.”

Programs on the military's wish list which do not have any funding earmarked yet also get a mention in the budget document, starting with investment in the U.K.-led Tempest program for a future sixth-generation fighter.

But the absence of cash for the program, which the U.K. and Sweden have already invested in, risked making Italy the weakest partner in the trio, wrote Italian defense publication RID.

“In this way, there is the risk that Italy's ability to influence the development decreases and it will be weaker when it comes to future talks on the dividing of manufacturing,” the publication stated.

The document also confirms Italy's interest in joining the U.S. Future Vertical Lift helicopter initiative to build next generation helicopters, which is currently being pursued by the United States only.

Government officials have already mulled investing in the program using funds paid out by the EU to help the Italian economy rebound from COVID-19.

Analysts have suggested that buying into FVL may overlap with work by Italy's Leonardo to build the AW249, a replacement for Italy's AW129 Mangusta attack helicopter.

This year, the plan to complete a €2.7 billion purchase of 48 of the AW249 helicopters receives funding in the budget.

“There is cash for the successor to the AW129 but seeing the mention of the FVL confirms Italy is also interested in that initiative,” said Crippa.

https://www.defensenews.com/global/europe/2020/10/28/italy-defense-budget-rebounds-despite-covid-crisis/

On the same subject

  • Deputy Secretary General reiterates NATO’s commitment to responsible innovation in defence and security

    November 27, 2023 | International, Security

    Deputy Secretary General reiterates NATO’s commitment to responsible innovation in defence and security

    NATO Deputy Secretary General Mircea Geoană addressed the Responsible Innovation Defence and Security Conference in Brussels on 27 November 2023 and thanked Belgium, the Netherlands and Luxembourg for organising the event, together with the NATO Emerging Security Challenges Division. He said that new technologies can transform our lives for the better in countless ways, but like any new technology, they bring risks, including to our security. Mr Geoană said that it is vital to develop these technologies responsibly and respecting our values - freedom, democracy, human rights and the rule of law.

  • Report: Army’s new modernization command risks cost overruns and delays

    January 24, 2019 | International, Land

    Report: Army’s new modernization command risks cost overruns and delays

    By: Meghann Myers When the Army first announced its intention to stand up a new four-star Futures Command, senior leadership said the days of years-long, expensive modernization programs and murky requirements were over. While failing early and often can prevent some of those issues before an idea becomes a program of record, there are still some risks that, by trying to be a more nimble and innovative enterprise, AFC could still run into cost increases and drawn-out timelines if it jumps too hard on emerging technologies, according to a Government Accountability Office report released Wednesday. “There are a variety of ways to fail when it comes to developing these technologies,” Jon Ludwigson, the GAO's acting director of contracting and national security acquisitions, told Army Times in a Wednesday phone interview. “I guess the way that I would look at it is, you can make sure that you have it right, or hope that you'll get it right.” The study was mandated by the 2018 National Defense Authorization Act, to take the temperature of Futures Command as it stood up. The Army officially activated the command in August, headquartered at the University of Texas in Austin. In general, the report found, the Army has applied best practices that GAO has previously touted, including close collaboration with senior leadership. On the other hand, the report found, there were a couple things that could be improved. AFC's plans to develop weapons systems with emerging technology could come back to hurt it, the report said. “GAO has raised concerns about this type of practice for almost two decades for other Army acquisitions, because proceeding into weapon systems development at earlier stages of technology maturity raises the risk that the resulting systems could experience cost increases, delivery delays, or failure to deliver desired capabilities,” according to the report. The GAO, Lugwigson said, is wary of creating programs around emerging technologies, before having a chance to test them in an operational environment. “As the Army identifies the capability, there are technologies that are used to achieve that capability,” he said. “What GAO has found is, there's an advantage to maturing those technologies before you begin what's called a program of record.” https://www.armytimes.com/news/your-army/2019/01/23/report-armys-new-modernization-command-risks-cost-overruns-and-delays

  • Amid Pacific naval arms race, US defense chief calls for increased funding for ships

    September 17, 2020 | International, Naval

    Amid Pacific naval arms race, US defense chief calls for increased funding for ships

    Aaron Mehta and David B. Larter Update 9/16/20 — The original version of this story included a statement from Esper's prepared remarks calling for the Navy's shipbuilding accounts to grow to 13 percent of the service's budget. His delivered remarks did not include that specific figure. The story has been appended below to reflect Esper's delivered comments. WASHINGTON — U.S. Defense Secretary Mark Esper on Wednesday announced called for increased funding for Navy shipbuilding after a major review of its force structure — but it is unclear where that funding will come from. In a speech delivered at the think tank Rand, Esper called for a Navy of “over 350 ships,” specifically by increasing the Navy's shipbuilding funding account. “We will build this fleet in such a way that balances tomorrow's challenges with today's readiness needs, and does not create a hollow Navy in the process,” Esper said. "To achieve this outcome, we must increase funding for shipbuilding and the readiness that sustains a larger force. Doing this, and finding the money within the Navy budget and elsewhere to make it real, is something both the Navy leadership and I are committed to doing. The Pentagon sought $207 billion for the Navy in its fiscal 2021 budget request. Even a 2 percent shift under that top line would represent $4.14 billion in extra funding for shipbuilding — real money, even by Pentagon standards. The call to shift funding toward shipbuilding comes amid an accelerating naval arms race in the Pacific, with China investing in both a massive fleet and shore-based, long-range anti-ship missile capabilities to keep the U.S. Navy's powerful carrier air wing out of striking distance. China is building toward a fleet of as many as 425 ships by 2030, according to the Center for Strategic and International Studies, while the U.S. Navy is building to a fleet of more than 355 ships, Esper said. The decision to increase shipbuilding funds, which Esper billed as a “game changer” in his remarks, comes as a result of an internal “Future Naval Force Study,” led by Deputy Secretary of Defense David Norquist. That study — which essentially superseded a review from the service itself — was delivered to Esper this week. That envisioned fleet will include a number of unmanned systems that will “perform a variety of warfighting functions, from delivering lethal fires and laying mines, to conducting resupply or surveilling the enemy,” Esper added. “This will be a major shift in how we will conduct naval warfare in the years and decades to come.” In his remarks, Esper said the forthcoming study “will serve as our guidepost as we decide on, program and build out future fleet and conduct follow-on assessment in select areas.” “In short it will be a balanced force of over 350 ships, both manned and unmanned, and will be built in a relevant time frame and budget-informed manner,” he added. Part of the increased funding could come from Congress shifting around authorities. Esper called on the defense committees to allow the service to “put unused end-of-year Navy funding directly into the shipbuilding account, rather than see it expire.” Traditionally, unspent dollars at the end of the fiscal year are no longer usable by the military. But an internal shift in the Navy's budget, without a corresponding overall increase, means a shift in priorities elsewhere — likely, at least in part, through the retirement of older systems. A key question is whether the Navy will need to fully fund the budget realignment from inside its own coffers, or whether the Department of Defense will realign its own priorities to cover any of the increase, something Esper has been hesitant to commit to in the past. The Navy's shipbuilding budget has been squeezed by the arrival of the Columbia-class ballistic missile submarine, the exorbitantly expensive next generation of nuclear deterrent-bearing boats. Adm. Michael Gilday, the chief of naval operations, said in a January speech at the annual Surface Navy Association symposium that the DoD budget should be realigned to cover the cost of the new Columbia class because it is eating a disproportionate share of the shipbuilding budget at a time the country is trying to grow the size of the fleet to match China. Even a single percentage realignment would make a difference, Gilday argued. To compare, he said, the Navy's budget in the 1980s — when it was building the Ohio-class ballistic missile submarine — was much higher than today's budget. “One percent of the DoD budget would be $7 billion per year in the shipbuilding accounts,” the CNO explained. “If I make some comparison from today and I go back to the 1980s, there are some similarities there.” “Right now we are building the Columbia-class submarine. That is my highest priority,” he added. "By the time we sundown the Ohio class, we'll have 42 years in those hulls. We need to get Columbia out there. “Now, let's go back to when we were building Ohio in the 1980s: It was about 20 percent of the shipbuilding budget. Right now, Columbia is about 20-25 percent. In FY26-30 it's going to be about 32 percent. That's a lot of dough. In the 1980s, the Navy's percentage of the DoD budget was 38 percent. Right now, it's 34. So I think historically I have a case to make.” Jerry Hendrix, a retired Navy captain and analyst with the Telemus Group, said the recognition that the DoD is underfunding shipbuilding is a big step. “It sounds like he [Esper] has recognized that given where we are going with the Columbia class, that the Navy needs more money for shipbuilding, and that's an important recognition,” Hendrix said. “The other part of this is: Is this coming from the Navy's budget, or is it coming from the DoD budget? Because the Navy still needs the rest of its budget to do training and readiness. So that is a very important aspect of this.” https://www.defensenews.com/naval/2020/09/16/amid-pacific-naval-arms-race-us-defense-chief-pledges-billions-more-for-ships/

All news