By Axel Bugge and Sergio Goncalves
LISBON (Reuters) – Eurogroup head Mario Centeno said on Monday the latest messages from Rome and the European Commission over Italy’s 2019 budget are “very positive” and he expects agreement to be reached on the blueprint.
“That is what I expect,” Centeno told Reuters in an interview, referring to a likely agreement between Italy and the commission over next year’s budget.
Italy told the commission on Monday it would stick to its contested 2019 budget plans in defiance of European Union fiscal rules, but promised not to inflate its deficit any further in the years ahead.
Centeno said the response, which followed the commission’s warning letter to Rome last week, was “constructive”.
Italy’s government, comprised of the right-wing League and anti-establishment 5-Star Movement, has alarmed investors with its spending plans, sending its bond yields sharply higher in the past few months.
(Reporting By Axel Bugge; Editing by Toby Chopra)