The Italian parliament has backed the populist government's fiscal proposals, including a deficit target of 2.4% of GDP in 2019 that has drawn criticism from European Union officials, Bloomberg News reported Oct. 12.

The government also set a deficit goal of 2.1% of GDP in 2020 and 1.8% in 2021, down from original deficit targets of 2.4% for each of the next three years. Both houses of Italy's parliament approved the targets even as top European Commission officials expressed concerns that the proposed spending plans "point to a significant deviation" from fiscal recommendations adopted by EU finance ministers in July.

The EC is set to inspect a draft budget Oct. 15, Bloomberg said.

The yield on 10-year Italian government bonds was down 4 basis points to 3.53% and Italy's FTSE MIB index rose 0.36% at around 5 a.m. ET. Italian bonds and stocks have slumped amid investor concerns on Italy's plan to widen its fiscal deficit, and finance industry executives have said they believe markets will play a bigger role than the EC in keeping the country's spending plans in check.