From L-R: Five Star's Di Maio, Prime Minister Conte, Lega's Salvini. Photo: Antonio Masiello/Getty Images

Italy's populist government is offering only limited concessions to the European Commission, which rejected Rome's big-spending budget last month and said the country risked "sleepwalking into instability."

Where things stand: The budget includes a deficit target of 2.4% of GDP, which Brussels says is too high for the debt-strapped country. Finance Minister Giovanni Tria has said the government must consider “the fears of our European partners," but Deputy Prime Minister Matteo Salvini said today that the government wouldn't consider bringing the target below 2.2%, per Bloomberg.

Michele Geraci, Italy's undersecretary of state for economic development, argued today at the Peterson Institute that what Brussels fears is a scenario in which economic growth is lower than the Italians project, bringing the 2.4% figure up to, say, 2.9%.

  • He says the government will crunch the numbers in the summer and, if they are on pace to exceed 2.4%, cut discretionary spending by delaying or pulling back on some programs "so that we never, never cross 2.4%."
  • Any fines from the European Commission are months away, he says, and will only come in the unlikely event that Italy massively overshoots their targets.

The bottom line: Geraci says the standoff has been more about "personality and politics than economics" and is already dying down. "If you have an argument, once you start smiling, usually the other guy starts smiling back at you," he said.

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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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