War Economy: The Hidden Costs We Cannot Afford

Fabio Panetta, Italy's central bank governor, argues that military production hinders long-term economic growth. He emphasizes that war promotes backward development and urges investment in productive sectors. The debate intensifies as NATO considers boosting defense spending amidst global conflicts and economic protectionism threats.

Italy's central bank governor, Fabio Panetta, expressed concerns over military production's impact on economic growth, stating that it fails to foster long-term prosperity. As NATO nations deliberate on increasing defense expenditure, Panetta insists that investments in productive sectors are the true drivers of development.

At a recent speech in Bologna, Panetta highlighted rising global conflicts, reaching a peak not seen since World War Two. Citing data, he argued that any short-term economic boost from arms production is negated by longer-term harm to infrastructure, raw materials, and societal cohesion.

Amidst discussions on military spending, Panetta warned against attributing technological progress to military expenditure, viewing war as regressive. He also cautioned against economic protectionism, particularly in light of proposed tariffs on international imports, urging for an open global economy.

(With inputs from agencies.)