BRUSSELS: German Chancellor Angela Merkel and Italian Prime Minister Giuseppe Conte discussed on Friday Rome's 2019 draft budget, which the European Commission says in its original version would break European Union rules, officials said.
Conte told the European Commission on Wednesday he was lowering next year's deficit target to 2.04 percent of gross domestic product from the 2.4 percent that the Commission rejected in October as too high.
But it is not clear if the new target will stop the Commission from moving ahead with a disciplinary procedure against Rome, which could end up in fines, although the two sides are getting closer to a compromise.
Conte is also trying to arrange meetings with other EU leaders on the sidelines of an summit in Brussels on Friday to get their green light to the budget. EU states have the last say on opening a disciplinary procedure.
On Thursday, Conte met Portuguese Prime Minister Antonio Costa. Portuguese finance minister Mario Centeno chairs the Eurogroup of euro zone finance ministers.
Italian officials said Conte is also trying to arrange other meetings, including with Dutch Prime Minister Mark Rutte, who has been one of the staunchest critics of Italy's excessively expansionary budget.
(Reporting By Andreas Rinke and Francesco Guarascio, writing by Jan Strupczewski)