European Union may impose economic sanctions against Italy, if sides do not agree on next year’s budget of the country, Reuters reports.

We would like to remind that EU rejected Italy’s budget based on fact of fiscal rules violation and further growth of huge enough of state debt.

EU is ready to have dialogue, but it does not exclude possibility of sanctions, if agreement is not reached. Italy still has one week until November 13 to submit revised spending plan.

However, Italy still does not have Plan B. Moreover, Finance Minister insists that planned deficit will not cause debt growth, which is already 130% of GDP.

As a precaution measure, Brussels can ask Italy to transfer non-interest deposit equal to 0,2% of GDP to bloc’s rescue fund. Commission also can set deadlines for steps to reduce debt. If these deadlines are not met, then stricter sanctions may follow, including fine 0,2% of GDP, suspension of billions of euro in EU funds as well as closer monitoring on behalf of European Commission and ECB.