BERLIN (Reuters) - German Finance Minster Olaf Scholz said on Monday he expected Italy to take steps to resolve a row with EU authorities over its 2019 budget.
The European Commission rejected the fiscal plan last month draft and has threatened to impose penalties if it is not revised to conform with EU regulations - something Rome has indicated it is unwilling to do.
Scholz said nobody would demand the Italian government pursue a policy of austerity.
"(But) whoever has 130 percent of their GDP in debt must act more cautiously than someone who is in a different position," told the foreign press association in Berlin.
"I expect the Italian government will take the necessary decisions that make it possible to avoid getting into difficulties ... We are quite optimistic that in the end there will be a good solution."
Turning to Brexit, he said no country in Europe would escape unharmed from a no-deal British exit from the European Union but that Britain would suffer most.
"For Britain, that would definitely be the worst option," Scholz said.
(Reporting by Paul Carrel and Thomas Escritt; Editing by Michelle Martin and John Stonestreet)
