Italy’s anti-establishment government is due to unveil its first budget. Investors fear the country will defy EU warnings not to introduce a deficit greater than three percent of its total economic output.
Italy's economy contracted in the last two quarters of 2018, and the slowdown is expected to continue into 2019. Italy's problems are having their effects on the rest of the eurozone.
Rome and Brussels appear to have resolved their disagreements and reached a compromise, after Prime Minister Giuseppe Conte promised the EU that his country would reduce its 2019 deficit.
Italy has promised to reduce its deficit targets for the next three years. Italian Prime Minister Giuseppe Conte said the long awaited agreement allowed his government to honor its main commitments and boost the economy.
The 2019 budget agreement reached between Italy and the EU is likely to ease market concerns. Rome and Brussels had gone head-to-head since October over the original high-spending fiscal plan.
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