Italian Prime Minister Giuseppe Conte (center) with Deputy Prime Ministers Luigi Di Maio (left) and Matteo Salvini (right). Photo: Simona Granati - Corbis/Getty Images

In an expected but unprecedented step, the European Commission has rejected the budget proposal put forth by Italy's populist government, Bloomberg reports.

Why it matters: Italy's budget proposal included tax cuts and a guaranteed "citizens income" for the poor, and would have raised its annual budget deficit to 2.4% of GDP. Italy's debt is already the second-highest in Europe, and its plans to boost spending have sparked investor fears and prompted Moody's Investors Service to downgrade the country's debt to one level above junk.

The big picture: The European Commission asks all EU member states to submit budgets that keep their annual deficits below 3%. While Italy's proposal meets that limit, its overall debt currently sits at a sky-high 130% of GDP. Italy now has three weeks to revise its plans and submit a new proposal, but Prime Minister Giuseppe Conte has reportedly said the government has no "Plan B" for fiscal spending, per Bloomberg.

What to watch: The budget rift between Italy and Brussels will likely fuel even stronger feelings of discontent in one of the most Euroskeptic countries in the EU.

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Hong Kong media tycoon Jimmy Lai arrested under national security law

Media tycoon Jimmy Lai at the Next Digital offices in Hong Kong in June. Photo: Anthony Wallace/AFP via Getty Images

Hong Kong pro-democracy activist Jimmy Lai has been arrested for "collusion with foreign powers," said Mark Simon, an executive at the tycoon's media firm Next Digital Monday morning local time.

Why it matters: He was arrested under the new national security law that gives Beijing more powers over the former British colony. Lai is the most prominent person arrested under the law, which prompted the U.S. to sanction Chinese officials, including Hong Kong leader Carrie Lam, over Beijing's efforts to strip the territory of its autonomy.

New York reports new low positive coronavirus test rate

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New York Gov. Andrew Cuomo (D) announced Sunday 515 people, or 0.78% of those tested, returned a positive reading for COVID-19 the previous day.

Why it matters: It's the lowest single-day positive rate since the start of the pandemic. It's another sign that the state that was once a global coronavirus epicenter is curbing the spread of the virus. "Our daily numbers remain low and steady, despite increasing infection rates across the country, and even in our region," Cuomo said in a statement. "But we must not become complacent: Everyone should continue to wear their masks and socially distance."

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