Italy stalls on missile program as budget cuts loom

October 4, 2018

Defense News:

ROME – Italy’s new populist government has halted plans for a new missile defense system amid reports it will reduce defense procurements in 2019 to help fund welfare spending and tax cuts. This week, the defense ministry withdrew a request it had sent to parliament for permission to acquire the CAMM-ER missile system, built by European missile house MBDA and due to cost €545 million, or $626 million.

The surprise U-turn on the program comes as Rome searches for funds to support a program of cash benefits for the poor and the jobless, pension boosts and tax cuts promised when the government took office in June.

“There are real fears for procurement spending, with some predicting that €1 billion will be trimmed from procurements next year,” said an Italian defense-industry source who asked not to be named. Italy’s defense procurement spending stood at €4.7 billion ($5.4 billion) in 2017, combining €2.1 billion from defense ministry coffers and €2.6 billion from Italy’s Ministry for Economic Development.

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