The European Commission has sent a letter to the Italian government seeking explanations over its excessive debt levels, giving Rome until May 31 to respond to the letter.
The letter comes ahead of an EU report on Italy's borrowing next week, which is likely to recommend a disciplinary procedure against Italy, a move that could eventually result in a €3.5 billion fine, though it looks politically unlikely at this point, Reuters reported, citing unnamed officials.
Under the EU law, a member state's budget deficit must not surpass 3% of GDP, while public debt must be no more than 60% of GDP.
Italy's debt-to-GDP ratio stood at 132.2% in 2018, the second highest across the eurozone. The country's budget deficit narrowed to 2.1% of GDP from 2.4% in 2017.
France, Belgium and Cyprus also received similar letters, Reuters reported.
Last year, the Italian government dodged potential disciplinary procedures from the EU after it agreed to cut its 2019 headline deficit target to 2.04% of GDP from 2.4%. But recent remarks from Italian Deputy Prime Minister Matteo Salvini, who has been pushing for tax cuts, have fueled concerns that Rome could again find itself on a collision course with the bloc.
Meanwhile, 5-Star Movement chief Luigi Di Maio, who is also deputy prime minister, called for a party confidence vote, due to take place May 30, Reuters reported, citing a post on the 5-Star's blog.
Salvini's League party clinched the first spot in the European parliamentary elections with 34.3% of the votes, while its coalition partner in the national government, 5-Star Movement, came in third with 17.1% of the votes.
Following the election results, Salvini reportedly said his party's performance reflected public support for tax cuts and changes to the EU's budgetary rules.
Salvini recently dismissed talks of a coalition reshuffle in the wake of the results, while Di Maio said his party did not demand his resignation.