Government borrowing would reach its highest level in more than half a century, a think tank warns.
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The election comes at a time of rapid economic growth under the minority Socialist government.
As Greece goes to the polls on 7 July, many young Greeks are turning from the left-wing Syriza.
The European Commission recommends that legal action be launched against Italy over its growing debt.
A committee of MPs also says the government's aim of eliminating the budget deficit has "no credibility".
Italy's parliament approves a budget for 2019, amid complaints it was revised to placate the EU.
A woman at the forefront of the "yellow-vest" movement wants a "truce" but others are unimpressed.
The government drops the measures it had initially postponed for six months after weeks of protests.
The European Commission says formal sanctions on Italy are warranted over its high-spending budget.
Italy's cabinet sticks to its big-spending budget plan despite a threat of fines from Brussels.