As Rome quietly shelves its grand promises on defence spending to shield households from an energy crisis, the prime minister has discovered that political survival trumps transatlantic loyalty. The question now is whether a weary electorate will buy her pragmatic pivot.
The wage war at home
The question of a statutory minimum wage has long been a political battleground in Italy. The country operates a unique system where minimum pay rates are not set by a single state-mandated standard, but by national collective bargaining agreements negotiated sector by sector. According to data from the Italian statistics institute ISTAT, the average minimum pay hovers between €7 and €9 per hour, or roughly €1,200 to €1,500 a month for full-time work. Yet these figures mask deep chasms, varying wildly depending on the industry.
In May, Prime Minister Giorgia Meloni declared that introducing a universal minimum wage would not provide additional protection for workers. Speaking in the Senate, Meloni insisted her government had chosen a different path: access to state hiring incentives would now be granted only to companies that pay a “fair wage,” as defined by the most representative national collective contracts. To illustrate the perils of a rigid floor, she pointed to the southern region of Apulia, where, she argued, such a measure had backfired spectacularly.
The prime minister was armed with her own labour market statistics. “Under this government, the number of temporary workers has fallen by 550,000 compared to previous administrations, and the number of permanent employees has increased by 1.2 million in three and a half years,” she stated. She linked this to policies that had “disincentivised temporary employment,” alongside a targeted focus on southern Italy, a region she claims suffers most from youth emigration.
Addressing the painful dynamics of household income, Meloni clashed with former prime minister Matteo Renzi, claiming that the 7% drop in real wages since 2021 had occurred under his allies’ watch. “We started from that point, worked on it, and wages have gradually started to grow faster than inflation,” she concluded.
The 5% fantasy collides with cold reality
Italy was one of the nations that, without much hesitation, backed NATO’s goal of reaching military spending of 5% of national GDP by 2035, a target aggressively pushed by US President Donald Trump. By the spring of 2026, however, the brutal war in Iran had redrawn the political map. For Italians, as for most Europeans, the conflict translated into eye-watering electricity bills, and a new political consensus began to solidify in Rome: the idea that a massive military build-up was simply unaffordable, and that the country had far more pressing drains on the public purse.
“For a year, Giorgia Meloni told us she was a bridge to Trump, but that bridge never existed, and now we are paying the price… The 5% NATO commitment is utterly unrealistic for Italy,” fumed Antonio Misiani, a senator from the centre-left Democratic Party and a former deputy finance minister.
Similar sentiments have been repeatedly aired by many MPs from the far-right League party, coalition allies of Meloni’s Brothers of Italy. They argue that justifying to voters why the state can “spend money on tanks” but not on aid for businesses and households battered by soaring energy prices is becoming “politically treacherous.”
Even voices from the traditionally hawkish establishment now urge restraint. Stefano Stefanini, a former Italian ambassador to NATO, stated recently that Italy’s level of public debt and its budget deficit leave Prime Minister Meloni with “no other choice” but to slow the pace of military spending.
A precarious balancing act
Meloni herself has adopted a carefully balanced posture. “We cannot tell citizens that we only have money for defence. If, in a time of crisis, we fail to provide answers to citizens and businesses, we risk having a country not worth defending. That is why we must try to find a balance,” she remarked in late May, as she presented Rome’s new plan regarding the European Union’s “Security Action for Europe” (SAFE) programme.
Initially, Italy planned to tap almost €15 billion in EU loans under this instrument, a fund designed to boost members’ defence readiness, a move that would have helped lift defence spending from 2% to 2.5% of GDP by 2030.
Now, however, Rome has signalled it intends to use only about a third of the sum reserved from the EU – between €4 billion and €5 billion – just enough to finance projects for which contracts have already been signed. Earlier, in April, the Italian premier had gone further, urging Brussels to allow Rome to use the “National Escape Clause” (which allows EU countries to exclude some defence spending from annual deficit calculations) to also exclude extra energy costs from the deficit figures.
Giorgia Meloni has refused to go to extremes, repeatedly making it clear that Italy cannot and will not unilaterally scrap all its defence commitments. “The truth is that if you don’t know how to defend yourself, if you ask someone else to guarantee your safety, you will pay for it with your autonomy, your sovereignty, your ability to protect your national interests. Defence spending is the price of freedom, and I want Italy to be a free nation,” the prime minister told a gathering of one of Italy’s business federations on June 1.
The spectre of 2027
The debate over whether Italian authorities should rein in their defence ambitions is now unfolding in an electoral context: the country heads to a general election in 2027.
Six months ago, Giorgia Meloni, whose government is set to become the longest-serving in the Republic’s history by September, had a very strong chance of staying in power after the ballot. For much of its mandate, her government was notably prudent with its finances, correctly betting that economic stability would eventually allow authorities to cut taxes and boost certain social safety nets. The war in Iran and the subsequent global and national economic weakening have put paid to those plans.
To Meloni’s misfortune, this unforeseen economic slump has coincided with a powerful political blow. In the spring, voters rejected a judicial reform referendum championed by the prime minister and her party colleagues. It was a wake-up call for the premier and a shot in the arm for what had been a moribund opposition. Since then, opposition ranks have begun to believe they have a real fighting chance against the nationally oriented bloc in 2027.
Backing away from earlier promises to ramp up defence spending – pledges given more readily to Donald Trump than to her own people – may go some way to repairing the standing of the government and the prime minister personally.
The inevitable criticism from President Trump could even work to her advantage. Given the deep antipathy towards Trump in Italy – a May Ipsos poll showed 77% of Italians view him negatively – being attacked by the US president for insufficient defence funding is likely to only solidify Meloni’s position in the public eye and among the electorate.
The invisible workers’ retort
Meanwhile, a different kind of war dominates the domestic front. Former prime minister Giuseppe Conte took to X to unload a broadside: “Every day we receive “war bulletins,” yet there is no “rearmament” strategy. This is a war to make it to the end of the month – for those who race through the streets on bicycles delivering food, for security guards risking their lives for a few euros an hour, and for countless other “invisible” workers.”
He pointed to data from the PoliS research centre published in La Repubblica, showing that nearly 20% of the workers who keep the nation’s economic and financial capital, Milan, running are poor and on low wages. “Three summers ago, I personally went to Palazzo Chigi with other opposition representatives to present Meloni with our bill for a statutory minimum wage, a measure that would have boosted the pay of almost 4 million workers. Over the years, we have tabled dozens of amendments aimed at boosting the purchasing power of workers and laid-off employees hit by inflation, and at ending the exploitation of young people through unpaid traineeships and internships. The government and the ruling majority have always said – and only said – no.”
Conte’s attack cut to the heart of the government’s quandary. “In return, this week Meloni went to the NATO summit in Ankara to confirm the signing of an insane commitment to allocate 5% of GDP to military spending and arms procurement. Trump appreciated it: “Italy – good, Spain – bad.” And what do our young people get instead? A promissory note hanging over their heads, while they can no longer even afford to rent a flat?” he asked. “They can attack us and sling mud all they want, but changing all of this is within our power.”
