The Italian government proposed last week to cut its deficit goal for next year to 2.04 percent of GDP from 2.4 percent initially. This compares with Rome's expectations of a deficit of 1.8 percent this year.
Video source: VCG
As part of the deal, Rome has also agreed to lower the 2019 GDP forecast to 1 percent from 1.5 percent next year.
Italian Prime Minister Giuseppe Conte heralded on Wednesday a budget deal with the European Commission, saying the long-awaited accord allowed his government to honor its main commitments and boost the economy.
The EU Commission signed off on Italy's 2019 budget after Rome agreed to lower its deficit targets for the next three years. But in a speech to parliament, Conte said he had resisted calls for even greater cuts and had safeguarded key measures.
Italy's anti-austerity leaders have backed down — a bit. Rome on Wednesday agreed a workaround on its budget deficit goals to end a damaging row with the European Commission. It brings welcome respite to Italian assets, but new challenges risk overshadowing the truce.