ROME — Italy is considering using a European Union loan deal to pay for new tanks and armored vehicles supplied by Germany’s Rheinmetall, a source has told Defense News.
The money for Lynx vehicles and Panther tanks would come from cheap so-called SAFE loans organized by the EU to help member states beef up their military strength as Russia threatens the bloc’s Eastern border.
Earlier this year EU officials said they would organize the low-cost loans worth €150 billion euros for members, then announced in September that Poland had been allocated €43.7bn in loans followed by Romania with €16.7bn, France and Hungary on €16.2bn and Italy with €14.9bn, among other recipients.
States have until Nov. 30 to supply the EU with details on how they will spend the cash, before funds are released in 2026.
Beneficiaries cannot carry out go-it-alone procurements with the loan cash. To encourage money saving and European military synergy, the EU has told member states to team up with at least one other EU recipient to make joint arms buys.
The subject came up in Rome on Monday when Hungarian prime minister Viktor Orban paid a visit to Italian Prime Minister Giorgia Meloni.
“The two leaders discussed the opportunities offered by the European SAFE scheme, evaluating possible synergies between Italy and Hungary to support their respective industrial and technological capabilities,” Meloni’s office said after the meeting.
The two countries already have one procurement program, and one potential program in common. The first is the Lynx tracked armored vehicle developed by Rheinmetall, which Italy and Hungary are buying, assembling and adapting.
The second is Rheinmetall’s new Panther main battle tank. Italy is set to purchase 272, while Hungary signed a deal with Rheinmetall in 2023 to team on development and production of the tank.
An Italian defense source who spoke on condition of anonymity told Defense News that Italy’s purchases of the two platforms were candidates to be supported by SAFE loan cash.
Italy plans to buy 1,050 variants of the Lynx vehicle, adding a turret built by home supplier Leonardo, while Hungary signed in 2020 to purchase around 218, with all but the first 46 to be built in Hungary.
Those 46 have now been delivered.
Hungary’s decision to put in for €16.2bn in SAFE loans makes it one of the largest potential beneficiaries, but that combines with Prime Minister Viktor Orban’s repeated criticism of the EU.
On Monday, the same day he discussed the SAFE set-up with Italian prime minister Meloni, he also told reporters “The European Union counts for nothing.”
Tom Kington is the Italy correspondent for Defense News.
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