Italy optimistic that EU will accept revised budget

The Italian government is confident the European Commission will not impose sanctions over the revised budget plan agreed with populist leaders.

One senior official on Monday said the government were optimistic of the outcome, Reuters reported.

Italy’s coalition government agreed on the “numbers and contents” of the budget it will propose to Brussels this week in its final move to avoid disciplinary action from the European Union after it submitted a budget plan that would hike deficit spending.

Matteo Salvini and Luigi Di Maio, who hold most of the political power in the administration agreed to a new plan on Sunday night government officials said.

The new plan will lower the deficit target for 2019 to 2.04 % of GDP from 2.4% it originally intended.

“We’ve reached agreement on everything, the budget will be within limits that should please the EU” Salvini said on Monday.

The EC could accept the proposed plan but he policy details will have to be rigorous and economic assumptions reasonable, said a EU official, according to Bloomberg.

London Capital Markets analyst Jasper Lawler said on Monday: “The euro will remain in focus on Monday as investors look towards Eurozone inflation data and digest reports of Italy finally coming to an agreement with the EU over its budget. After months of wrangling, Italy has softened its stance and agreed to produce a budget within limits that should please the EU”.