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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.

Go deeper

Dion Rabouin, author of Markets
20 mins ago - Economy & Business

First glimpse of the Biden market

Photo: Jonathan Ernst-Pool/Getty Images

Investors made clear what companies they think will be winners and which will be losers in President Joe Biden's economy on Wednesday, selling out of gun makers, pot purveyors, private prison operators and payday lenders, and buying up gambling, gaming, beer stocks and Big Tech.

What happened: Private prison operator CoreCivic and private prison REIT Geo fell by 7.8% and 4.1%, respectively, while marijuana ETF MJ dropped 2% and payday lenders World Acceptance and EZCorp each fell by more than 1%.

Mike Allen, author of AM
52 mins ago - Politics & Policy

Biden-Harris, Day 1: What mattered most

President Joe Biden and first lady Dr. Jill Biden arrive at the North Portico of the White House. Photo: Alex Brandon-Pool/Getty Images

The Axios experts help you sort significance from symbolism. Here are the six Day 1 actions by President Biden that matter most.

Driving the news: Today, on his first full day, Biden translates his promise of a stronger federal response to the pandemic into action — starting with 10 executive orders and other directives, Caitlin Owens writes.

2 hours ago - Politics & Policy

Read: Pete Buttigieg's opening statement ahead of confirmation hearing

Pete Buttigieg, President Biden's nominee to be secretary of transportation, in December. Photo: Kevin Lamarque/AFP via Getty Images

Pete Buttigieg, President Biden's nominee to lead the Transportation Department, will tell senators he plans to prioritize the health and safety of public transportation systems during the pandemic — and look to infrastructure projects to rebuild the economy — according to a copy of his prepared remarks obtained by Axios.

Driving the news: Buttigieg will testify at 10 a.m. ET before the Senate Committee on Commerce, Science and Transportation. He is expected to face a relatively smooth confirmation process, though GOP lawmakers may press him on "green" elements of Biden's transportation proposals.