EU rejects Italian deficit budget, gears up for a showdown - Reuters

As reported by Reuters, the European Union leadership in Brussels has rejected Italy's proposed budget, setting the two sides up for a bitter fight in the future.

Key quotes

"Italian bond yields jumped on the unprecedented move by the EU executive which was exerting for the first time a power obtained in 2013 after a sovereign debt crisis to send back a budget of a euro zone country that violates the rulebook."

"The Commission has previously dealt with France, Spain, Portugal and past Italian administrations that broke EU fiscal rules, but none of those violations were as blatant as the latest Italian budget draft, the Commission said. “Today, for the first time, the Commission is obliged to request a euro area country to revise its draft budget plan,” Commission Vice President Valdis Dombrovskis told a news conference."

" “The Italian Government is openly and consciously going against the commitments it made.” "