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The European Union has warned the Italian government it could face disciplinary action if it does not take steps to reduce its mounting debt.

The European Commission's latest findings report that Italy's national debt was 130% of GDP in 2018, and is likely to continue rising in 2019 and 2020. The EU's rules stipulate a government's debt should not be more than 60% of GDP.

Valdis Dombrovskis, the EU's commissioner for the euro and social dialogue, said there were signs in the country's economy of "the damage recent policy choices are doing". He called for "renewed reform effort, not spending more where there is no fiscal space to do so".

Italy's leaders were defiant in their response, defending their economic policies.

Deputy Prime Minister Matteo Salvini said: "I'm sure that in Brussels they will respect our will. The only way to cut the debt created in the past is to cut taxes.

"Cuts, sanctions and austerity have only produced more debt, poverty, precariousness and unemployment. We need to do the opposite."