ROME — Italy’s deputy prime minister Matteo Salvini on Tuesday threatened to seek damages from European Commission president Jean-Claude Juncker for scaring off investors by attacking Rome’s budget plans.

The budget drafted last week raises spending and pushes the public deficit to around 2.4 per cent of gross domestic product, which will hike public debt above its already sky-high level of 131 percent of GDP.

"Juncker and other European bureaucrats’ words and threats continue to increase the spread," said Salvini, who is head of the far-right League, which governs Italy with the populist Five Star Movement.

The closely watched "spread" is the difference between the rates on 10-year debt paid by Italy compared with those offered by Germany.

It hit its highest level in a month on Monday as fallout from the budget plans continued to shake markets.

Salvini accused Juncker of unjustly comparing Italy to Greece after the head of the EU executive said on Monday that "after the toughest management of the Greece crisis, we have to do everything to avoid a new Greece -- this time an Italy -- crisis".

"Is the aim to attack the government and Italian economy? We are ready to ask for compensation from those who wish Italy ill," Salvini said on Twitter.

The spread, which stood at 233 points last Wednesday, rose to 267 points the day after Thursday’s budget announcement, and by Tuesday was at 290 points, according to Italy’s RadioCor agency.

"I think there was some of which was lost in translation..." said EU commission spokesman Margaritis Schinas, adding that Juncker had been speaking in German, which was simultaneously translated into English, and from that into Italian.

"It was not said as reported in these dramatic tones."

Prime Minister Giuseppe Conte sought to assuage concerns over the budget on Tuesday, vowing to speed up Italy’s efforts to reduce its mountainous public debt -- the eurozone’s second biggest after Greece.

The government has agreed to work to lower debt levels "consistently over three years", Conte said in a statement after meeting other top ministers to discuss the issue.

The previous centre-left government had aimed to reduce the public deficit to 0.8 per cent of GDP, but deputy prime minister Luigi Di Maio on Tuesday stood by the planned rise.

"We can confirm the figure of 2.4 per cent and are targeting a reduction of public debt in coming years thanks to future growth and spending cuts," he told broadcaster La 7.

Another government meeting would be held on Wednesday to finalise the budget, added Di Maio, head of the populist Five Star Movement (M5S) which formed a government with Salvini’s League.

In itself the budget plan is not in breach of the EU deficit ceiling of 3.0 per cent, but its inflation of Italy’s debt burden -- already way above the 60 per cent EU ceiling -- has worried investors.

The budget is due to be submitted to the European Commission for review on October 15. — AFP