In a report published Wednesday, the European Commission announced that it rejected the Italian budget plan for 2019.
"Our analysis suggests that the debt rule must be considered to have not been respected," the document reads. "We conclude that the opening of a procedure for excessive deficit based on the debt is therefore justified".
Addressing the matter, European Commission Vice-President Valdis Dombrovskis told a press conference in Brussels that “Italy's draft budgetary plan is in particularly serious non-compliance.”
"With what the Italian government has put on the table, we see a risk of the country sleepwalking into instability," he stressed, adding that "the opening of a debt-based excessive deficit procedure is… warranted."
Dombrovskis stressed, however, that the Commission had not closed the door on Italy and would try to avert instability in the euro area's third largest economy.
"We stand ready for a dialogue with the Italian authorities, but we think that this situation needs to be addressed," he concluded.
Commenting on the EU move, Deputy Prime Minister Matteo Salvini confirmed that the government would not negotiate over its fiscal targets. He added that any possible EU sanctions against Rome would be "disrespectful" towards the Italian people.
"We are convinced about the numbers in our budget. We will talk about it in a year's time," he told reporters.
Eurogroup President Mario Centeno also noted that the issue would be discussed by the finance ministers of the EU countries in December.
On Italy: We will discuss this in the #Eurogroup in December. I cannot and will not pre-empt that discussion now.— Mário Centeno (@mariofcenteno) 21 ноября 2018 г.
In general, the @EU_Commission has been balanced in the implementation of our common fiscal rules. pic.twitter.com/0TOaRJBwrw
Italy currently intends to run a public deficit of 2.4 percent of GDP, while the European Commission claims that due to the country’s unstable economic situation, the deficit would reach 2.9 percent of the Italian GDP next year.