Basically full air-to-ground capability and full DASS. Italy plans to use it predominantly as an air defense fighter, with the Tornado/AMX and ultimately the JSF as mud mover. As a partner they are committed to buying X aircraft, I don't know if also the specific Tranche is totally fixed, I would think so, how else would its development be financed. So they'd probably have to renegotiate with the other partners, which will be difficult. I think ultimately it has no choice other than commit to it. But I'd be more worried about what happens if they don't go for the Tranche 3, first because of the implications for the others nations, second because of the capability gap which might arrise between Tornado/AMX out of service date and JSF in-service, which is still slipping. But you'll end up having to upgrade your existing fleet to that standard anyway, so getting Tranche 2 instead of 3, probably isn't the best economical solution long term.
I don't think it's really a dilemma, but just an overall shortage of funding in this period, which seems fundamental to Western countries in the post-Cold War world. Insufficient funding can easily result in delays, which ultimately means more costs. But if you don't have the cash, there isn't really anything you can do about it without cutting costs elsewhere in the defence organization, or basically let your state budget deficit grow... possible for African countries, but not an option for democracies, unless the perceived threat become 10x higher.
Not ordering this last Tranche is basically like pulling out, way too late. It will be costly, but then again, they are sunk costs, start looking at what you can do with the freed up funds (nothing in this case, as there are none).
The cost concerns might be alleviated by taking away uncertainty regarding final configuration and schedule, and if that doesn't help scrapping plans, such as AESA CAPTOR and HMS for now, and have as an option, instead of standard fit. I'm sure Spain and Germany would be interested to hear about cost savings, only the RAF might complain about the missed capability and long term costs of introducing these capabilities later on.
If only an additional export customer could be found for the Typhoon by the Eurofighter consortium, as opposed to UK MOD / BAE, then the European countries can stop worrying about having to procure a basically too high a number of EFs. That will free up funds for the remainder of the Tranche 3 aircraft to be properly financed. But it's eating up your potential return from the export program, luckily most major aerospace companies involved are doing good.
Don't you just love aircraft development programs, with in particular these multi-nation projects.
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