Italy avoids EU sanctions after reaching 2019 budget agreement

Compromise with European commission will reduce deficit target to 2.04% of GDP

Italy has managed to avert EU sanctions after reaching a compromise with the European commission over its 2019 budget.

The Italian prime minister, Giuseppe Conte, said the government had managed to reach an agreement to reduce the deficit target to 2.04% of GDP from 2.4%. This has been achieved without making drastic changes to key budget proposals such as the promise of a universal basic income and lowering the pension age.