EU reaches deal with Italy on budget

BRUSSELS – The European Commission says it has reached an agreement with Italy to avert legal action over the country’s budget plans, which the EU’s executive arm had warned could break euro currency rules.

European Commission Vice-President Valdis Dombrovskis said Wednesday that the “agreement is not ideal” but allows the Commission to avoid legal action against Italy — “provided that the measures are fully implemented.”

The threat of action is not rare in EU terms but it came amid growing tension between the Commission and Italy’s populist government, which had vowed to resist any pressure from Brussels.

Dombrovskis said “the Italian government has come a long way” from the heated rhetoric of a few weeks ago.