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BREAKING NEWS

Italy budget crisis averted after EU agreement

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Italian PM Giuseppe Conte and Jean-Claude Juncker
Italian PM Giuseppe Conte and Jean-Claude Juncker -
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A deal between Italy and the European Commission over its contested 2019 budget has been reached.

The clash with the EU, whose fiscal rules are designed to protect the euro zone from a debt crisis, has worried investors, pushing up Italy's borrowing costs and depressing bank stocks.

Italian Prime Minister Giuseppe Conte heralded the budget deal with the European Commission, saying the long-awaited accord allowed his government to honour its main commitments and boost the economy.

Rome agreed to lower its deficit targets for the next three years, which led to the EU Commission to sign off on the Italian 2019 budget. But in a speech to parliament, Conte said he had resisted calls for even greater cuts and had safeguarded key measures.

"At the end of tough negotiations, conducted with tenacity, we have reached a point of sustainable equilibrium, sticking to a higher (deficit) figure than that deemed appropriate by Europe," Conte told the upper house Senate.