ROME (Reuters) - The European Commission has accepted Italy’s proposal to set a budget deficit target of 2.04 percent of gross domestic product (GDP) next year, a government source said on Tuesday.
Italy’s original budget proposal envisaged a deficit equal to 2.4 percent of GDP in 2019, up from 1.8 percent this year — a suggestion that the Commission had dismissed as a flagrant breech of EU fiscal rules.
After weeks of wrangling, an Economy Ministry spokeswoman announced earlier on Tuesday that Rome had struck a deal with the Commission over the budget. However, she declined to give details, saying the accord would be formalised on Wednesday.
Reporting by Giuseppe Fonte; Editing by Crispian Balmer