European Commission rejects Italian budget proposals, Salvini defiant
The European Commission rejected Italy's medium-term budget proposals on Tuesday, asking the government in Rome to return to the drawing board and come back within three weeks.
It was the first time ever that Brussels had rejected a national government's proposed budget proposal.
Having termed the Italian government's proposed breach of its previously agreed commitments last week "unprecedented", on Tuesday the European Union's executive arm said they were "unreasonably optimistic".
To take note of, earlier in the session, Italian premier Giuseppe Conte had reportedly said "there is no plan B", telling Bloomberg: "I have said that the deficit at 2.4% of gross domestic product is the ceiling. I can say that this will be our ceiling."
Conte said the government might be able to make some tweaks, but not on the actual sums of spending involved, adding that "for me that would be difficult, I couldn't accept it."
He also reiterated his argument that growth was the best way for the country to escape from its debt trap and Italy's commitment to remaining in the euro, ANSA reported.
However, he reportedly said the government stood ready to cut government spending if necessary, telling Bloomberg: "We are ready to reduce maybe, to operate a spending review if necessary."
In parallel, deputy Prime Minister, Matteo Salvini, said there was no turning back and that the only body which could improve the budget was the country's parliament.
"We're not going to take even a cent from the pockets of the Italians. We listen to everyone but we won't go back".
Following the news, as of 1506 BST the yield on the benchmark 10-year Italian Treasury note was higher by four basis points at 3.53%.
In parallel, that on similarly-dated Spanish debt was down by three points to 1.66% while that on the 10-year Bund was off by four at 0.41% and at its session lows.