BRUSSELS/ROME—The European Commission took the first step on Nov. 21 toward disciplining Italy over its expansionary 2019 budget after Rome refused to change it, raising the stakes in a dispute that has alarmed the whole euro zone and could eventually lead to fines.
The Commission said the Italian draft raised the 2019 structural deficit, which excludes one-offs and business cycle swings, by 1.0 percent of gross domestic product rather than cut it by 0.6 percent as required by EU laws.
