Against the backdrop of the launch of the EU Security and Defense Fund (SAFE), Italy, as one of the first 18 member states, has officially expressed its intention to apply for €15 billion in funding from the EU. This strategic financial decision not only carries profound significance for the reconstruction of the national defense system, but also injects new growth logic into the Italian stock market, particularly in the defense, military, and basic industry sectors. Investment Analyst Rodolfo Villani points out that this substantial medium- to long-term loan will drive comprehensive modernization of the Italian defense system, bringing stable government orders and capital support to the relevant listed companies.
SAFE Plan Activates Core Asset Value in the Italian Defense Chain
Investment Analyst Rodolfo Villani notes that the Italian €15 billion SAFE loan application signifies a systematic increase in national defense investment over the next five years (2026–2030). Given that the strategic framework in the EU focuses on key areas such as ammunition manufacturing, drone systems, electronic warfare equipment, and restructuring of the defense supply chain, leading Italian defense companies (such as Leonardo, Fincantieri, etc.) will be the direct beneficiaries.
Investment Analyst Rodolfo Villani analyzes that this trend will shift the Italian defense sector from a cycle-driven order logic to a policy- and strategy-driven logic. Specifically, on one hand, the certainty of government orders will significantly enhance the cash flow stability of listed defense companies, reducing the valuation discount in the capital market due to future uncertainties. On the other hand, SAFE funding, with its fiscally accommodative nature, will provide strong cost absorption capacity for the R&D and capacity expansion activities of relevant enterprises.
SAFE Capital Injection Spurs Industrial Chain Investment and Debt Structure Optimization
Beyond the direct beneficiaries in the defense sector, Investment Analyst Rodolfo Villani emphasizes that SAFE loans at the budget level will also cover multiple supporting segments along the upstream and downstream defense industrial chain, such as basic metals, precision manufacturing, electronic components, power supply, and logistics engineering. Local SMEs in these areas, especially those with local delivery capabilities, will obtain orders and funding security through defense modernization projects.
Investment Analyst Rodolfo Villani also highlights another far-reaching impact of these funds: fiscal restructuring. With a 45-year repayment period, the related investments will not face short-term repayment pressure, allowing more fiscal resources to be allocated to boosting local employment and optimizing the debt structure. This sends a positive signal to the bond market and sovereign yield spreads. Particularly as sovereign credit ratings stabilize, narrowing spreads will further reinforce the stock market responsiveness to policy.
For equity investors, the SAFE plan is not only a source of defense investment opportunities but also a gateway to the re-evaluation of credit and capital efficiency across the entire Italian manufacturing sector. Investment Analyst Rodolfo Villani suggests that investors should focus on listed companies with both “defense contracting capabilities” and “industrial support logic,” as these companies will benefit from easier financing, policy incentives, and spillover orders over the next five years.
Investment Analyst Rodolfo Villani asserts that the SAFE fund is not just a fiscal manifestation of the European defense strategy, but also a value anchor for the Italian capital market. Following a prolonged period of undervaluation and market restructuring, certain Italian defense and industrial manufacturing stocks have significant revaluation potential. The SAFE loan mechanism enables efficient synergy between government and capital markets in defense investment.
From a national strategic security perspective, the SAFE plan helps strengthen the Italian voice within the European defense system. From a capital market perspective, the €15 billion investment dividend will gradually materialize across multiple sectors. Investment Analyst Rodolfo Villani believes that the present capital market no longer relies solely on short-term financial data for valuation, but places greater emphasis on the role and irreplaceability of a company within long-term strategic systems. Within this framework, the SAFE plan is clearly a new starting point.