Five Ideas to Escape the Five-Percent Syndrome
Vision Paper by Francesco Grillo, Valerio Rosa and Silvia Scarafoni.
Elaboration of an article originally published in Il Messaggero by Francesco Grillo
Five percent. That is likely the specter that will haunt European governments in the years to come. The communiqué with which NATO Secretary General recently concluded the meeting of what he—arguably overstating—calls “the strongest alliance in history” produced a single outcome that could prove extremely burdensome for a weakened European economy. The commitment to triple defense spending by 2035 means governments will face politically risky decisions in an already challenging context. Prime Ministers of countries like Italy and Spain seem well aware of this, as they are being called upon to make significant sacrifices that may alienate an electorate far removed from the notion of being at war. Yet, there are at least five strategies Europe can adopt to build adequate defense capabilities without running the risk of becoming even less popular.
The commitment made last week at the NATO summit could, in theory, cost many European governments their next elections. This is something Italian Prime Minister Giorgia Meloni seems to understand clearly, while Economy Minister Giancarlo Giorgetti fears the impact it may have on a state budget that is scrutinized daily by international investors—more so than by the European Commission.
Italy’s situation is particularly delicate: starting mid-next year, the country will lose support from the National Recovery and Resilience Plan (NRRP), which represents about 3% of GDP annually for three years; additionally, Italy has already committed to reducing public spending by 0.6% annually in agreement with the European Commission—whereas military expenditures could push the budget in the opposite direction; and finally, there’s the looming threat of trade tariffs, which may not be mitigated by the concession made to Trump on military spending. These are risks we share with other nations, especially Spain, whose Prime Minister has essentially secured an exemption. But Italy bears an added burden: it is the only European country where, according to an ECFR survey, the percentage of people opposing rearmament (57%) exceeds those in favor (17%).
However, there are at least five viable options Italy and other European governments can consider to strengthen their defense capabilities while keeping costs in check. The recent “Conference on the Future of Europe,” held last weekend in Siena, brought together parliamentarians from all European countries and political families, offering crucial insights.
First, the cost of defense changes significantly if undertaken collectively. If instead of 27 separate national budgets, there were a single EU defense budget, the European Defence Agency estimates we could save 30%. Without spending a euro more than the €320 billion allocated in 2024, we could increase our defense capacity by one-third simply through economies of scale. This isn’t a goal the EU can achieve overnight—but it is telling, for example, that in terms of technology procurement, the 27 member states are jointly purchasing less than they did before the war in Ukraine. The chart below shows the declining trend of joint procurement as a percentage of total defense spending in the EU—a counterintuitive and concerning signal, especially considering the geopolitical context and rising budgets.
Secondly, within individual national budgets, there appear to be inefficiencies that could be redirected toward productive spending. The United States allocates less than 30% of its defense budget to personnel; Portugal, Italy, and Greece all spend over 60%. Taken together, European countries spend as much as China—but China invests twice as much in research, and today’s wars are won with entirely new types of weapons.
Thirdly, technology is drastically altering the equation. In Ukraine, the war is being fought with drones that can cost just a few hundred euros and have successfully downed bombers worth tens of billions. In this light, though no one says it outright, if Ukraine needs Europe to sustain a drawn-out war, it’s now Europe that needs Ukraine—driven by necessity, the true engine of innovation—to lead in areas that will be crucial in the future.
Fourth, there’s a point to be made about drones: if we invest wisely in military-use technologies, we can derive a positive spillover to increase productivity in sectors—like healthcare and public transportation—that are currently at risk of suffering from reduced resources due to rearmament pressures.
Finally, it’s true that a portion of the increase (1.5% of the 5%) can be allocated to expenditures that, more broadly speaking, make society less vulnerable. This could be an opportunity to introduce a form of mandatory civil service—perhaps at the European level—that would help foster a sense of community and build capacity to address societal weaknesses.
Ultimately, as Giorgia Meloni observes, we must be better prepared to defend ourselves not only against a possible (though unlikely) Russian attack—Russia is weakened and spends half of what EU countries do—but also to return to regions that are just an hour from Lampedusa: Libya, Syria, Gaza, if necessary. It is essential if we are to start anticipating crises we have spent decades passively awaiting. To do so, we must be as resourceful as the Ukrainians, who are fighting not just for their survival, but for the future of their nation.
References:
NATO (2025). NATO concludes historic Summit in The Hague. Link.
The Economist (2025). A defence splurge will slow Europe’s deindustrialisation. Link.
