The Italian government has defied the European Commission by sticking to its big-spending budget plan. Deputy Prime Minister Matteo Salvini said a deficit target of 2.4% and a growth forecast of 1.5% were unchanged.
The EC - worried about the impact of high spending on already high levels of Italy's debt - had told Rome to revise the budget or face possible fines. It had set Tuesday as a deadline to Italy's governing populist parties to respond to its objections.
The EC's warning to Italy, the Euro zone's third-biggest economy, is an unprecedented move with regard to an European Union member state.
Salvini, who leads the League party, was speaking after a cabinet meeting on the highly controversial issue. In a statement, he said the government would stick to the budget's main parameters.
Meanwhile, Luigi Di Maio, the deputy PM from the Five Star Movement coalition partner, said: We have the conviction that this is the budget needed for the country to get going again.
The government has vowed to end poverty with a minimum income for the unemployed. Other measures include tax cuts and scrapping extensions to the retirement age - fulfilling several key campaign promises from the election in March.
A defiant Prime Minister Giuseppe Conte insisted earlier that the budget deficit would go no higher than 2.4% of GDP in 2019, although the target is three times than that of the previous government.
The government argues that servicing its debt of 131% of national output - second only to bailed-out Greece - would hurt Italians, who have still not recovered from the decade-old financial crisis.
Italy's economy is still smaller than it was in 2008. The governing coalition argues an increase in spending would kick-start growth.