Brussels rejects Italy budget, paves way for sanctions

Brussels officially rejected Italy's big-spending budget on Wednesday, clearing the path for unprecedented sanctions and deepening a bitter row with Rome's populist government.

"With what the Italian government has put on the table, we see a risk of the country sleepwalking into instability," Commission Vice President Valdis Dombrovskis told a press conference in Brussels.

"We conclude that the opening of a debt-based excessive deficit procedure is... warranted," he added, referring to the EU's official process to punish member states for public over-spending.