"This is a political crisis, these are bets [being made] before the European elections. We are facing an existential crisis that has shown how, for the first time since the creation of the European Union, populist forces have appeared, forces of illiberal democracy that are attacking freedom. This is an 'Italian challenge' that is not a crisis right now, but rather a budgetary challenge, a challenge to EU rules," Moscovici said.
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The euro area's economy is growing, new jobs are being created, the financial situation in most EU member states has improved, and their public debt, with the exception of Italy, was on a decline, he stressed.
"The European economy is not in a crisis," the commissioner concluded.
Addressing the issue, Italian Interior Minister and Deputy Prime Minister Matteo Salvini said that Rome was not going to change "even a comma" in the 2019 budget, calling Brussels' actions an "attack on the Italian economy" and accusing the EU leadership of attempting to hinder Italy's economic growth.
READ MORE: Italy-EU: Confrontation Will Continue Until Next European Elections — Prof
The budgetary plan submitted by Italy to the European Commission was drafted with a deficit of 2.4 percent of GDP. It is below the EU-mandated 3 percent threshold, but another criterion stipulates that EU members should keep its debt-to-GDP level below 60 percent and make efforts to cut debt if it is above the limit.
Italy's debt-to-GDP ratio has stagnated around 132 percent over the past four years, the second highest rate in Europe after Greece. By June, the country's debt grew to an all-time high above 2.3 trillion euros ($2.64 trillion).
