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.
Brussels has asked the Italian government to explain its lack of progress in reducing debt. Italy's populist government is accused of exposing the bloc to financial problems by ignoring budget discipline rules.
The European Commission president has said Italy is moving in an "unsound direction" regarding public debt. Jean-Claude Juncker warned Rome to rethink, though Italy's leaders appear divided.
The EU Commission has begun a legal process that could mean unprecedented sanctions and financial oversight of Europe's fourth-largest economy. Italy aims to change the rules that could lead to its censure.
The incoming head of the European Commission has said she will look for pragmatic solutions to the issue of migration. Ursula von der Leyen also spoke of plans for Italy's budget and her approach to Poland and Hungary.
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