Italy's deputy premier Luigi Di Maio said on Tuesday he was "extremely confident" that the parliament will approve the populist government's spending plans by the year's end "without betraying Italians" or incurring European Union financial penalties.
"I am very confident that we will get the budget through with the (big-spending) measures that we have put in place and without (EU) infraction procedures," Di Maio told reporters out the parliament in Rome.
"We want to find an agreement in order to keep our promises to Italians," Di Maio said.
The government has offered to trim its budget deficit target to 2.04 percent from 2.4 percent and has shaved 4 million euros off the cost of lowering the retirement age and its flagship citizen’s income for the poor, according to Di Maio and deputy premier Matteo Salvini. But the European Commission has reportedly asked Italy for a further 2.5 billion euros-3 billion euros of savings.
The Commission rejected Italy's 2.4 deficit target in October as a breach of EU fiscal rules requiring member states' deficits to fall progressively towards a balanced budget. The previous centre-left government forecast a deficit of 0.8 percent in 2019.
The Commission has said a high deficit would only add to Italy's already massive debt burden and that the government's overly optimistic forecasts would not deliver the growth promised after years of austerity measures.
If it fails to reach agreement with Italy, the EU executive could launch an 'excessive deficit procedure' that can result in fines of 0.2-0.5 percent of GDP, although these have never been levied on any eurozone country.
An EU disciplinary procedure would keep Italy under prolonged market pressure and besides fines could also lead to cuts in EU funding and other financial sanctions.
