European Union economic sanctions against Italy over its budget deficit would be a retrograde step for the country, finance minister Pier Carlo Padoan said on Friday.
"An infraction procedure would be a big problem for Italy in terms of its reputation, which it has recently strengthened," Padoan said after a meeting of EU finance ministers in Brussels.
"It would be a reversal of what has been achieved until now," Padoan continued.
He said the Italian government will comply with the EU executive's request to supply it by 1 February with a list of commitments to reduce its 2017 budget deficit by some 3.4 billion euros to avoid an excessive-deficit procedure that could include fines.
But Padoan said that irrespective of its 2017 budget, Italy would "spend what it needed to spend" on aid to central Italian regions hit by series of strong earthquakes since 24 August, the most recent of which were on 18 January.
"Unluckily, expenditure on the (quake) emergency and reconstruction will rise," Padoan stated, referring to the situation as "an ongoing tragedy".
The Italian government in October approved a budget of about 27 billion euros including a higher-than-expected deficit target of 2.3 percent of gross domestic product (GDP) due to extra spending on aid to the quake zone and on the migrant crisis. It had earlier last year agreed a deficit target of 1.8 percent of GDP with Brussels.
Italy's more than 2.2 trillion euro debt pile is the second highest in the eurozone and Rome and the European Commission have often clashed over Italy's expansionary budgets.
Mainly to keep eurozone countries' public debts in check, the EU in 2013 brought in stricter fiscal rules for countries using the euro in response to the sovereign-debt crisis.
The European Commission can impose fines of up to 0.2 percent of GDP on eurozone counties that repeatedly ignore requests to cut their deficits.
