"Intensive negotiations over the last two weeks have resulted in a solution for 2019. This allows us to avoid excessive deficit procedure at the given stage. This is, of course, provided that all agreed measures are implemented," Dombrovskis said.
READ MORE: Italy's Budget Deficit Issue 'Has Never Been as Serious as It is Now' — Prof
In October, the commission rejected Italy's draft 2019 budget, saying that it was not in line with EU rules on public spending. In November, Italian government submitted a new draft with only a few changes that was also rejected.
While Italy's budget deficit falls within EU limits set by the Stability and Growth Pact, which states that the deficit for EU members must not exceed 3 percent of their GDP, the country must also have a public debt that is below 60 percent of its GDP — Italy's debt exceeded 130 percent of its GDP in 2017.
