The European Union could derail Italy's big spending plans this week, with speculation mounting that officials in Brussels are set to reject the anti-establishment government's 2019 draft budget.
The European Commission, the EU's executive arm which checks and approves euro zone budgets before they are adopted by national parliaments, could decide for the first time ever on Tuesday to ask a member state to revise its draft budget.
The Commission has already indicated that it is not happy with the plans, warning last Thursday that the draft is in serious breach of, and an "unprecedented" deviation from, EU spending rules. However, a Commission spokesperson told CNBC that no decision on the budget has been taken yet.
"The European Commission is assessing the Italian draft budget in an objective way, to check whether it respects the commitments Italy took last July before all EU countries. To be clear, there is no legal way for the Commission to 'reject' a draft budget. But the Commission can ask a government to submit a revised version of the draft budgetary plan."