Italy has crossed a historic threshold: in 2025, the nation officially allocated €45 billion to defense—meeting NATO's 2% GDP benchmark for the first time and marking a sharp increase from the previous year's 1.52%. On May 4, the country paused to commemorate 165 years of the Italian Army, but what matters most to residents isn't the anniversary itself. It's what this spending surge, combined with 12,100 military personnel deployed across 39 international missions, means for national security, Europe's defensive posture, and Italy's role in an increasingly fragile world.
President Sergio Mattarella received General Carmine Masiello, Chief of Staff of the Italian Army, and a delegation of service members at the Quirinale Palace to mark the occasion. In his address, Mattarella framed the armed forces as crucial to building an adequate European defensive instrument—one anchored in international law and multilateral institutions rather than military aggression alone. The president's message arrived as conflicts intensify across multiple theaters, from the Middle East to Eastern Europe, forcing Italy to maintain high operational readiness while navigating fiscal constraints that could delay critical modernization.
Prime Minister Giorgia Meloni echoed the sentiment on social media, framing military service as more than profession—a life choice defined by responsibility and love for the homeland. She acknowledged that soldiers face challenging missions often in silence, yet their sacrifice represents a concrete example of professionalism and duty. The government's recognition underscores a broader political consensus: Italy's security future depends on sustained investment and deployable capabilities.
The anniversary ceremonies began on May 1 with the inauguration of an "Army Village" in L'Aquila, continuing through May 5. On May 2, Mattarella attended a solemn Changing of the Guard ceremony at Piazza del Quirinale. These events serve as more than national pride—they signal institutional resilience at a moment when the weakening of international law and proliferation of large-scale conflicts demand demonstrated capacity.
For residents of Italy, the Army's operational footprint directly affects national security and border integrity. Italian troops currently serve in Lebanon under UNIFIL (where Rome is a leading contributor), Iraq (training forces against Daesh), Kosovo (KFOR peacekeeping), Bosnia-Herzegovina (where Italy will assume command of EUFOR ALTHEA in 2026), and across Mali, Somalia, Libya, and the Baltics. Mattarella specifically highlighted the Sassari brigade integrated into UNIFIL's mission command, praising their resilience in conducting a delicate peace mission under difficult security conditions. These soldiers represent the last on-the-ground instrument available to the international community for promoting peaceful resolution to the crisis in Lebanon. With UNIFIL's mandate set to expire at the end of 2026, Italy has signaled its intention to maintain a military presence to support international efforts.
The strategic calculus is straightforward: Italy's ability to deploy experienced, interoperable forces in crisis zones enhances its diplomatic leverage and ensures Rome remains a key player in shaping European defense policy and NATO posture.
Yet fiscal reality complicates the narrative. Italy's 2026 defense budget stands at €32.4 billion, reflecting what analysts call a "strategy of prudence" driven by constrained public finances. The Pluriannual Defense Planning Document 2025–2027 earmarks over €18 billion for extraordinary investments, with a significant share directed at renewing the Army's fleet of vehicles and equipment. Funding priorities center on three pillars: operational readiness and deployment, modernization of military instruments, and governance reform.
Italy has requested access to the European Union's SAFE mechanism, which offers long-term loans for military enhancement and has allocated €14 billion for ammunition, air defenses, and armored vehicles over 2026–2030. The country ranks as the second-largest participant in the European Defence Fund and is positioning itself as a central actor in the EU's ReArm Europe–Readiness 2030 plan, designed to consolidate strategic autonomy through flexible budgets, joint procurement, and advanced technological cooperation. Leonardo and Fincantieri—cornerstones of Italy's defense-industrial base—are well-positioned to benefit from these pipelines.
The security landscape facing Italy in 2026 extends well beyond conventional military concerns. Hybrid threats—disinformation campaigns, economic coercion, coordinated cyberattacks—operate below the threshold of armed conflict yet pose existential risks. Russia and China are identified as primary sources. Italy experienced a wave of serious cyberattacks in the first half of 2025, targeting critical infrastructure, hospitals, and personal data. State actors are increasingly viewed as the principal cyber threat, with geopolitical tensions driving the evolution of digital aggression.
In response, the Italian Ministry of Defense approved the "AI and Defense–2026 Edition" strategy, placing artificial intelligence at the center of defense planning. The document aims to integrate AI rapidly across all sectors—from operations and organization to training and industry. A key objective is technological sovereignty, reducing critical dependencies on external suppliers by developing proprietary high-performance computing infrastructure. Italy is also participating in the STEADFAST DART 2026 exercise in Central Europe, led by the NATO Rapid Deployable Corps Italy, with roughly 1,900 Italian soldiers simulating responses to international crises. For 2025–2026, the country must maintain forces at high and very high operational readiness to manage emergencies and meet NATO requirements.
Beyond Europe, Italy remains acutely exposed to instability in the Mediterranean, Africa, and the Middle East. Persistent crises in Libya, the Sahel, the Horn of Africa, Gaza, Syria, Lebanon, and Iran pose direct risks to energy security, migration flows, and the containment of jihadism. The escalation of conflict in the Middle East heightens terrorism risk in Europe, with potential attacks against Israeli or American targets. Jihadist propaganda may exploit these conflicts to promote a "global jihad" narrative, while Hamas activities in Europe—including arms circulation and possible hostile projects—raise alarm. Africa's demographic transition is expected to accelerate existing crises, compounding security challenges.
For residents and investors in Italy, the implications are multifaceted. The Army's robust international engagement and domestic readiness translate into a more stable security environment, even as geopolitical risks mount. The emphasis on interoperability and European defense integration positions Italy to respond to regional crises that could affect travel, trade, and energy supply. Foreign nationals residing in Italy benefit directly from this enhanced operational capacity.
Investors in Italy's defense and aerospace sectors stand to gain from the €18 billion investment pipeline and the nation's central role in European Defence Fund and ReArm Europe initiatives. The push for technological sovereignty and high-performance computing infrastructure signals opportunities in cybersecurity, AI, and advanced manufacturing. However, budget constraints and fiscal prudence mean that contract awards and procurement timelines remain subject to political and economic headwinds. The government's ability to balance NATO commitments, EU integration, and domestic fiscal discipline will shape the defense industry's trajectory through the remainder of the decade.
Italy's 97,797-strong Army (forecast average for 2025) is undergoing selective growth and equipment modernization, even as comprehensive defense reform awaits. The country ranks among the second or third largest contributors to NATO operations and holds first place among European nations in UN peacekeeping missions and second place in EU-led missions after Spain. NATO strategy for 2025–2026 emphasizes collective deterrence and burden-sharing, with the U.S. National Security Strategy 2025 explicitly calling on European allies to shoulder more of the financial load. All NATO members hit the 2% target in 2025 for the first time—a threshold Italy had previously fallen short of—but pressure to do more remains intense.
The 165th anniversary marks not just institutional longevity but a critical inflection point. Italy's security posture, defense investment trajectory, and role in European integration hinge on the decisions made in the coming 18 months. The €45 billion commitment, the modernization pipeline, and the technological pivot toward AI represent more than ceremonial gestures. They define how Italy will navigate an era of hybrid threats, regional instability, and shifting geopolitical balance. For residents and expats alike, this is the story that matters.
