ROME — Italy is set to spend €160 million this year for the development of a new wheeled tank, but will skimp on planned funding for a new batch of its armored Freccia vehicles, slowing the Army's drive toward becoming a lighter-weight, digital fighting force.

Sources knowledgeable of funding decisions told Defense News that the new Centauro II wheeled tank program would receive €160 million via the 2016 Italian defense budget, which is expected to be released imminently.

Developed by a consortium of Italy's Iveco and Leonardo-Finmeccanica, the tank is an update on the Centauro already in service with the Italian Army. The prototype will be unveiled at the Eurosatory show in Paris next month before it's handed over to the Army in July for tests that will run through 2017.

The funding may lead to a pre-series contract for about 1530 of the 30 ton, 105 kph vehicles, the sources said.

With a new hull and better armor than the first Centauro, the upgrade will have a 120mm gun, compared to the 105mm gun on the original, and a more powerful, 720 horsepower engine.

The sources said that up to 140 Centauro IIs might eventually be ordered, replacing the Army's oldest Centauros from the approximately 400 that were ordered, of which about 240 are still in service after more than 140 were sold to Jordan.

The Centauro II's funding will be a positive note for military planners constrained by a tight budget. A provisional budget document released in December, which did not break down individual programs, said that €1.95 billion would be spent on procurement, down 17.7 percent year on year. To that sum will be added the regular top-up from the Ministry of Industry budget, which has exceeded €2 billion euros in previous years.

The document warned that programs, including the planned arming of Italy's UAVs, would not find funding in 2015.

The Army is likely to be disappointed by the amount of money — just €21 million, sources said — which will be freed up for its Freccia armored vehicle program.

At the start of 2015, the Italian Parliament approved the spending of €2.65 billion to buy 381 Freccias to equip a brigade, joining an initial Freccia-equipped brigade for which a first lot of 249 vehicles has already been ordered.

The two brigades based on the vehicles, which are built by Iveco and Leonardo-Finmeccanica, were seen as key to the Army's shift to greater mobility and digitization.

Sources said that €201 million were earmarked last year for the second batch of vehicles and a first contract for 30 vehicles is due to be signed.

But with only €21 million freed up this year to continue the funding, planners will have their work cut out to round out the order of 381 vehicles by the scheduled date of 2024.

The new batch will be split into one group of 261 vehicles containing mortar, command-post, anti-tank and combat versions, and a second group of 120 so-called Freccia Explorers, which will contain versions mounting a Lyra 10 radar.

Versions of the Explorer, which will debut at Eurosatory, will also carry the Leonardo-Finmeccanica UAV Horus and the tracked unmanned ground vehicle TRP2, which sports a machine gun, camera and grenade launcher.

Germano Dottori, a lecturer in strategic studies at Rome's LUISS University, said that Italian Army generals might also be routing for a new battle tank.

"What they might be better off buying are Leopard II tanks, which is what the generals want," Dottori said.

The Army is now down to about 30 functioning Arietes — its main battle tank — after savage cuts to maintenance budgets left many tanks without parts and out of service, he said.

Dottori said the Leopard II had recently beaten the Ariete in a NATO firing test, upping its reputation in Italy.

"If Italy wanted to go into Libya, its hands would be tied because it does not have battle tanks," he said.

Dottori said the Army might find additional funding in the 2016 budget if Italian Defence Minister Roberta Pinotti makes good on her promise to reduce spending on the joint strike fighter (JSF) program following criticism of the program from within the Italian Parliament.

Whether the spending cuts take place or not, the JSF program is continuing in Italy as aircraft roll off the country's final assembly line. The first aircraft off the line made history in February by becoming the first F-35 to cross the Atlantic when it was flown to Luke Air Force Base in Arizona to contribute toward pilot training.

On May 18, the second and third aircraft off the line also flew to the US, accompanied by two Italian 767 tankers.