Budget "in Italian", rejected by the Eurogroup

Titian  Wikimedia CCTitian’s Europa The economy was bullish for a while but not right now

Many are concerned that Europe would be subjected to unprecedented financial turmoil if Italy were to lose control of its finances.

In an interview with Bloomberg TV, European Commission Vice President Valdis Dombrovskis cited the risk that Italy's economy might "slow even further" under the current plan.

European Commissioner for Economy and Finance Pierre Moscovici that the cost of servicing Italian public debt is already equal to the country's entire spending on education - €65 billion a year, before adding that the Commission and the Italian government are not now involved in negotiations on a compromise regarding a revised budget. Finance Ministers from the 19 nations using the euro currency gather in Brussels on Monday to debate draft budget plans amid tensions over whether Italy's planned spending package breaks promises to cut public debt.

EU Economic Commissioner Pierre Moscovici said the Commission would wait until Nov 13 before deciding on any disciplinary action against Italy over the budget, hoping Rome would change the higher borrowing assumptions.

The situation is reminiscent of the Greek debt crisis, except with Italy's much bigger and more central eurozone economy at the heart of the storm, the size of the bailout would be so large as to make it virtually impossible.

Rome was given a week to prepare a new state budget, on the Eurogroup meeting it was felt that a draft law with the European Union regulations is not entirely consistent.

Asked whether some deal or compromise could be found between Brussels and Rome, Moscovici said: "No".

"No, we're not negotiating".

"We are looking forward to very constructive discussion and hopefully we will get a new draft budget plan and then come back to this in December", Centeno told reporters in Brussels.

He recalled that the cost of servicing Italian public debt is already equal to the country's entire spending on education - 65 billion euros ($74 billion) a year, or about 1,000 euros per citizen.

Moscovici said the Commission fully expects Italy to submit a revised plan by the upcoming deadline.

This would already be more than enough to cause deep concern as eurozone finance ministers meet for the first time since Brussels rejected Rome's 2019 budget.

Once Italy responds to the commission, the EU's executive arm will have three weeks to publish its final assessment - which may include triggering a procedure that could eventually lead to financial sanctions for the government in Rome. But countries still determine their spending priorities and Italy's government appears determined to go its own way.

The Goldman Sachs economist suggested market pressure will play a "key role" on whether the Italian Government carries out its plans despite having signalled no intention to give up the proposed budget.

Italian Finance Minister Giovanni Tria, right, talks to French Finance Minister Bruno Le Maire during a meeting of Eurogroup Finance Ministers at the European Council headquarters in Brussels, Monday, Nov. 5, 2018.

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