Moody's said Friday there is a debt risk for NATO countries if the race to rearm is triggered by Russian threats in the Ukraine war with Italy and Spain particularly exposed.
The race towards rearmament in NATO countries triggered byMoscow's threats "will complicate debt reduction efforts andcould weaken their credit profile", exacerbating social conflict, said the US ratings agency.
"Spain and Italy are particularly vulnerable", having "the largest gaps in defense spending (compared to the NATO target of 2% of GDP, ed.) and the lowest levels of popular support for further increases in military spending".
In the base scenario, Moody's said, Italy's debt would rise to 144% of GDP in 2030, but would reach 147% if the 2% target is reached.
Russian President Vladimir Putin on Thursday threatened to strike NATO bases if F-16s used in Ukraine fly from them.
NATO has long denied Kyiv's demand for the fighters but is now expected to grant the request some time soon.
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