The European Commission has told Italy to revise its planned budget for 2019 - an unprecedented move by the EU.

The populist Italian government has proposed spending plans that would see the country's deficit to increase to 2.4% of GDP.

In an opinion issued today, the European Commission warned that increase would be three times higher than the goal of a 0.8% deficit initially agreed between the EU and Italy.

The commission also says that high debt remains a 'major vulnerability' for the Italian economy, which has struggled to recover from the financial crisis.

It now says Italy must revise its plans 'as soon as possible' - giving it a deadline of three weeks to submit an alternative plan.

The Italian government faces potentially heavy fines if it does not change its proposed budget.

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, explained: "The opinion adopted today by the Commission should come as no surprise to anyone, as the Italian Government's draft budget represents a clear and intentional deviation from the commitments made by Italy last July.

"However, our door is not closing: we wish to continue our constructive dialogue with the Italian authorities. I welcome [Italian Finance Minister] Tria's commitment to this end and we must move forward in this spirit in the coming weeks."

Spending plans

The Italian government was formed earlier this year, led by the right-wing League and the populist Five Star movement.

Its first budget proposes measures such a tax cut and increased welfare spending.

Italy's deputy prime minister Matteo Salvini has been among those defiant about the government's budget plan, earlier saying they were 'not going back' on their proposals despite the expected EU rejection.

Italy's current debt of 131% of GDP is the second largest in the EU, behind only Greece.

Valdis Dombrovskis, the EU's Vice-President for the Euro and Social Dialogue, noted: "Italy's debt is among the highest in Europe, and Italian taxpayers spend about the same amount on it as on education.

"In this spirit, we see no alternative but to request the Italian government to revise its draft budgetary plan for 2019."