The Italian government is planning to moderate its deficit plans after coming under fire from the European Union and financial markets, reports said on Wednesday.

In recent days, Italy announced a deficit target of 2.4 per cent of gross domestic product (GDP) for 2019 to 2021, under the eurozone limit of 3 per cent but much higher than previously budgeted.

According to the La Repubblica and Corriere della Sera dailies, the government is now considering to hit 2.4 per cent in 2019, and to lower the figure to 2 per cent by 2021.

Financial markets reacted positively to the report.

The spread, a key sovereign risk indicator, which measures the yield differential between Italian and benchmark German 10-year bonds, fell to 284 basis points at the start of trading.

On Tuesday, it jumped above 300 basis points, the highest level since March 2014.

Meanwhile, the main index of the Milan stock exchange opened on Wednesday 1.3 per cent up.

Italy’s budget plans are still unclear because the government has not yet published its full deficit, debt and growth targets in writing, as it should have done on Thursday.

Instead, Rome’s populist government only communicated deficit figures verbally, while it is expected to release a budget planning document later. (dpa/NAN)