Italy's budget drama – all you need to know

The eurozone's third biggest economy is heading for a clash with Brussels over deficit plan

The financial markets are het up about events in Rome for three reasons. First, Italy is the third biggest economy in the eurozone after Germany and France. Second, its banking system is fragile after two decades in which the economy has posted precious little growth. And third, it has a new populist government - a coalition of the League and the Five Star Movement - with a radical agenda that includes raising pensions and introducing a basic income.

Related: Italy agrees high public spending reforms in potential clash with EU