Italy will lower its budget deficit target under a revised spending plan for 2019 as Rome attempts to avoid potential sanctions from the EU, Italian Prime Minister Giuseppe Conte said, according to the Associated Press.

After meeting with European Commission President Jean-Claude Juncker in Brussels, Conte said the new draft budget trims the deficit target to 2.04% of GDP from a previous estimate of 2.4%.

Both the League and Five Star Movement, the parties making up Italy's coalition government, support the new proposed budget, according to Conte.

Conte said flagship government policies such as higher welfare payments would cost less than expected, allowing for a lower deficit target, the Financial Times reported.

A spokeswoman for Juncker said "good progress has been made," according to the FT.

The EU rejected Italy's budget plan in October on grounds of being in serious breach of EU rules.