On 18 April, the Italian cut its economic growth and fiscal forecasts, warning that it won't balance its budget as previously committed in 2013, but instead will run a deficit equivalent to 0.5% of gross domestic product.
The economic and financial forecasts approved on this occasion also say that the economy will shrink this year by 1.2% compared with previous projections of a 0.4% decline.
The previous day, the principle of a balanced budget was written down in the Italian Constitution, as required by the EU's fiscal compact treaty, signed in March by 25 EU member countries but which still needs to be ratified in most of them, including France.
In August, Spain became the first EU country to follow the advice of Germany by starting a parliamentary procedure to enshrine a 'golden rule' in its constitution guaranteeing budgetary stability.
Berlin has led the way in pushing for eurozone governments to enshrine deficit-limiting rules in their constitutions on an obligatory basis.
Commission spokesperson Olivier Bailly said the EU Executive had taken note of Italy's adoption on Wednesday of a stability and reform programme, and was looking forward to receiving the details in order to assess the country's medium-term budget strategy.
Bailly said the primary view was that the revised Italian government economic growth projection for 2012 was in line with the Commission interim forecast, published in February. The Italian government now foresees a contraction of 1.2% of economic activity, slightly less than the Commission's 1.3% forecast published in February, Bailly said, adding that the the two analyses were on the same line.
He also said that the Commission believes that the full implementation of the fiscal measures already adopted in Italy will allow Rome to reap a sizeable primary budget surplus in 2013.
Bailly also commended Italy's introduction of the balanced budget rule in the Italian constitution.
An internal Commission document seen by Reuters also confirms that the EU executive takes the view that Italy's revised growth and budget targets are consistent with a balanced budget in the medium term, creating a "sizable" primary surplus to cut the country's massive €1.9-trillion debt.
The assessment, a technical document which will be submitted to senior EU officials, comes after Italy said on 18 April its deficit would be 0.5% of gross domestic product next year, up from a previous forecast of 0.1%, which will be reached instead in 2014.
Prime Minister Mario Monti, when he took office five months ago, signed up to predecessor Silvio Berlusconi's goal of balancing Italy's budget by next year (see background).
"The government's policy response has so far been determined and wide-ranging. It has to be implemented in full and as a matter of urgency," the document reads.
The commission document, like Monti himself, emphasised that Italy will post a structural - adjusted for the business cycle - budget surplus of 0.6% next year.
The important thing is that Monti presses ahead with labour market reforms and "sound" management of public finances are continued "beyond 2013," after next year's national election, the commission said.
It also urged Italy to make additional structural reforms aimed at boosting growth.
