The Italian government sent to the European Commission a draft budget for 2019 is set the deficit at 2.4%. Italy is one of the 19 nations using the shared euro currency, so its financial decisions and actions can affect the fortunes of the euro and subsequently the finances of other European Union nations.
Italy's banks are reeling from the impact on their capital levels of soaring government bond yields, which touched a five-year high on Friday.
The spread hit 340 basis points, a new high since March 2013.
This was reinforced when news broke late in the day that Moody's ratings agency had downgraded Italy's credit to Baa3 from Baa2, citing "significantly higher budget deficits planned for the coming three years compared to earlier expectations" and an increased possibility of an Italexit "should tensions between the Italian government and European authorities continue to escalate", the Financial Times newspaper and Italian news agency ANSA reported.
Moscovici called the difference "unprecedented".
German chancellor Angela Merkel told reporters after the meeting that Conte briefed her on reforms, from the fight against corruption to the transparent digital structure of public administration, but that on the budget, Italy needs to engage in a "positive dialogue" with the European Union commission.
Kurz said: "If one breaks these rules then this means that Italy is endangering itself but of course also is endangering others beyond that". "Nor a euro without Italy or Italy without the euro".
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In a joint press conference with Tria on Thursday, Moscovici was at pains to stress that "the European Commission is not Italy's enemy" and that its objective is not to criticize the ways in which eurozone members decide to spend money, but rather to make sure that each country plays by the rules that everyone has agreed to.
The Italian government is looking to boost spending in the hope of engineering faster economic growth.
"As long as I'm head of this movement and a minister of this government I'll always guarantee that Italy remains within the euro and in Europe", he added. He denied a rift in the governing coalition. "In contrast, a more lenient approach would further undermine the credibility of the EC's tortuous fiscal rules and irritate some member states from Northern Europe".
Italy projects this will widen by 0.8 per cent, more than the 0.6 per cent improvement Brussels wants. He told a late-night talk show that the draft budget presented to President Sergio Mattarella's office contained a proposal to extend a tax amnesty on money held overseas and brought back to Italy.
Salvini, who leads Italy's co-ruling League party, is an admirer of Russian President Vladimir Putin and has rejected allegations of Russian meddling in Western elections.
He said the 5-Star, founded by comedian Beppe Grillo, was working to present in January-February a programme that brought together similar grassroots movements from other European countries with the goal to "give back a heart and humanity to European institutions".