Covid-19 and the Italian Defence Technological and Industrial Base: Impact and Policy Responses

Italy was the first European country affected by COVID-19 and where the pandemic hit the hardest. Its impact on aerospace and defence industry includes short term damages and a mid-term negative pressure on the Ministry of Defence’s budget. The damages caused by the 52-day rigid lockdown have been only partially mitigated by the government’s economic support. Small and Medium Enterprises suffered the most. The unprecedented increase of Italy’s sovereign debt will push fiscal consolidation in the next years, thus impeding any increase of military spending towards NATO targets. As a result, the national DTIB will probably have to cope with limited government investments, hopefully channelled through EU defence initiatives.