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A Bridge Too Far

Eurointelligence comments on military spending in A Bridge Too Far.

When trying to raise defense spending, governments that don’t really want to do it but feel pressured to by the US have one seemingly enticing option: creative accounting.

The problem, however, is that the US is watching, and has its own opinions about what it deems frivolous military spending. Italy’s government recently went on the record to deny that it would count money spent building a bridge over the strait of Messina, between Sicily and Calabria, towards its new Nato spending target.

Perhaps not coincidentally, the clarification of Italy’s position came after Matthew Whitaker, the US’s ambassador to Nato, publicly poured cold water on the idea. At a conference in Slovenia on Tuesday, Whitaker made clear that the US would take a dim view of countries adopting what he described as an expanded view of defense spending. He then specifically singled out, in his own words, bridges with no military value.

The whole idea of counting the bridge over the strait of Messina as defence spending was always an especially egregious example of this. It was like something that an Italian satirical TV show might come up with. The bridge itself has already been a punchline in Italian politics for decades.

One big sticking point we can see coming up, for example, is military pensions. In some countries, they already count for a large proportion of overall military spending. Almost a fifth of all Italian defence spending, for example, is on soldiers’ pensions. In France, it is slightly lower, but still high comparatively at 16%. In 2025, France will spend more on pensions than it will on maintaining its nuclear strike force.

As these costs increase, both in absolute terms and relative to military budgets, the European countries might argue for them counting as extra military spending. We can see the US taking a different view, insisting that only extra tanks, planes, missiles, fortifications, and actually serving soldiers count.

Regardless of the fairness too, what the US says will go. The problem is that we are not doing this extra spending to try and make ourselves truly independent of the US. We are doing it to try and prolong a transatlantic relationship that is, if not truly dead, nothing like what it previously was. We expect that, decades ahead, this will be viewed as one of Europe’s gravest strategic errors.

Little Support and No Fiscal Room

There is little support in the EU for more military spending (excluding political lip service by politicians to appease Trump).

More importantly, there is no fiscal room anywhere except perhaps Germany. France is a primary example.

Compliance Rules

1. Deficit rule: a country is compliant if (i) the budget balance of general government is equal or larger than -3% of GDP or, (ii) in case the -3% of GDP threshold is breached, the deviation remains small (max 0.5% of GDP) and limited to one year.
2. Debt rule: a country is compliant if the general government debt-to-GDP ratio is below 60% of GDP or if the excess above 60% of GDP has been declining by 1/20 on average over the past three years.

France’s general government gross debt is projected to reach approximately 116.0% of its GDP in 2025.

France and Noncompliance

• France Debt-to-GDP: 113% vs target 60%
• France Budget Deficit: 5.8% vs target 3%
• Italy Debt-to-GDP: 135.3% vs target 60%
• Italy Budget Deficit: 3.4% vs target 3%

Trump’s Mandate

As of the NATO Summit in June 2025, Donald Trump’s mandate was for NATO allies to increase their annual defense spending to 5% of their GDP by 2035. While the European Union (EU) is not a military alliance, the majority of EU members are also NATO members, and the demand is directed at them. 

Breakdown of the 5% mandate

The new target, agreed upon during the summit in The Hague, expands the previous 2% guideline by including a broader range of security-related expenses: 

• 3.5% of GDP is to be spent on core military requirements, such as weapons and troops.
• 1.5% of GDP is allocated for “defense- and security-related” investments. This category includes funding for cybersecurity, critical infrastructure, logistics, and supply chain readiness. 

This section was from AI.

Military Spending Select Countries

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French Government on Verge of Collapse Over Debt Crisis

On August 27, 2025, I commented French Government on Verge of Collapse Over Debt Crisis, What’s Next?

What’s it All About?

The crisis revolves around Eurozone fiscal rules. The EU never enforced its Growth and Stability Pact or Maastricht Treaty rules. But now it wants to.

France is one of the worst offenders.

Q: How is France or Italy going to meet even 3.0 percent military spending given budget constraints?

A: Neither will. And Italy will struggle to hit 2.0 percent even if it can count money spent on bridges that have nothing to do with military.

What’s Trump going to do, make another TACO (Trump always chickens out) threat to leave NATO? Up tariffs increasing costs on US consumers while increasing EU deficits? Tell Russia it can have all of Ukraine?

Expect TACO threats. Realistically, Trump is in no position to demand anything.

Whatever Trump says and does is sure to cause more political and fiscal troubles for the EU, especially France and Italy.

Is an EU breakup Trump’s intent?

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