Italy's coalition government is ready to adjust its disputed 2019 budget if the markets react negatively and with spiking of spread between 10-year government bond yields and German bond yields, an Italian newspaper reported today.
The government said on Monday it would stick to its plans despite acknowledging that its budget, which will raise the deficit next year to 2.4 percent of gross domestic product, is not in line with the European stability and growth Pact. The paper did not say whether the alternative budget would reduce the deficit or not.
The European Commission has already sent a warning letter to the Italian government on the budget last week, the first formal step that could lead to the rejection of these measures and the imposition of fines.
