Tria’s view is that the gap could rise to at least 1.5 percent of gross domestic product next year, newspaper La Stampa said, without saying where it got the information. That is higher than the 1.2 percent he previously predicted. Newspaper Il Messaggero said he could see a deficit up to 1.8 percent.

The latest reports highlight the struggle between Tria, a cautious academic, on the one side and the coalition partners Five Star Movement and League on the other.

Messaggero said the two parties are pushing for a 2019 deficit somewhere between 2 percent and 2.5 percent. A second top-level budget meeting is scheduled for today, where Messaggero says Tria has been asked to provide more information and solutions.

The figures reported in newspapers are still well below the 3 percent European Union limit, though markets have become increasingly worried about the constant uncertainty in Rome. Italy’s leaders have been whipsawing markets and the EU with contradictory statements all summer, pushing bond yields to a five-year high last week.

Barclays economists’ main scenario is for a deficit of 1.9 percent this year and 1.7 percent in 2018, according to a report late last month. While that would signal the government won’t allow a deterioration in the public finances of the size some had feared, slower consolidation “will set Italy’s debt equilibrium on an increasingly unstable path in the medium term,” it said in a research note.

The eventual makeup of the Italian budget has been an investor focus all summer, with bond yields pushed higher in response to the new populist government’s expensive electoral promises. Those include hefty tax cuts and some form of universal income for the poor that could have a negative impact on the country’s debt and deficit.

Tria hit back at charges the budget could go off the rails and breach agreed-upon European covenants including a deficit ceiling of 3 percent of gross domestic product. Despite wide-ranging promises made during the election season and seeming disagreements between coalition partners on priorities, “the government has an agreement on the confines of the budget” which will be respected. “By the end of September those commitments will become fact,” the minister said in the interview published Sunday.

‘Citizen’s Income’

Addressing concerns that the costly wish lists of the government’s two coalition partners — the rightist League, which favors a flat tax and the anti-establishment Five Star, whose program calls for a “citizen’s income” which critics have dubbed an expensive handout — Tria said that while all governments seek to build voter consensus through promises, “we have to judge by facts.” Voters, too know this, as “citizens have brains and the capacity to make judgments.”

The spread between Italian debt and German debt, which last week touched levels reminiscent of the financial crisis, will come down when budget details are unveiled, Tria said in the interview. “Budget stability will be respected,” the minister said. “The spread will narrow.”

The government is expected to set new public-finance and economic-growth targets by Sept. 27 and submit a draft budget to the European Commission by Oct. 15. On Aug. 20, Moody’s Investors Service extended a review of Italy’s credit rating to get “better visibility” on the fiscal path and reform agenda.

Italy’s current targets, agreed with the EU, see the deficit falling from 1.6 percent of GDP in 2018 to 0.8 percent in 2019, with a balanced budget in 2020. Tria told Bloomberg News in July that his aim is not to worsen the structural-budget situation and possibly to improve it. Still, he’s also said that slower-than-expected economic growth means the deficit is heading toward 1.2 percent in 2019.

The eventual end of the European Central Bank debt-purchasing program will be a “blow” to many countries, with the difference that Italy’s growth is “less strong.” Still, Tria insisted that Italy “isn’t fragile, it’s not the sick man of Europe”

1. Why is the Argentine peso collapsing now?

Though Argentina’s economic problems have been building for a while, the recent collapse was triggered by disjointed and vague communication by elected leaders. On the morning of Aug. 29, Macri said the International Monetary Fund had agreed to expedite cash payments to Argentina as part of a $50 billion credit line. But IMF officials didn’t comment for several hours, and Macri’s government was mum on details of timing and amounts. Eventually, the IMF said only that it would considerArgentina’s request to speed up disbursements. The Fund’s Director, Christine Lagarde, will meet with the country’s Treasury Minister, Nicolas Dujovne, on Tuesday to discuss revisions to the agreement.

2. How did we get here?

A mix of bad luck, bad communication and confusing policies have plunged the peso in 2018. The central bank unexpectedly cut interest rates in January despite no signs that inflation was slowing down. That raised questions about whether Macri’s administration was controlling monetary policy, despite publicly saying the central bank was independent. Then a historic drought ruined the country’s top export, soy. Rising U.S. interest rates and emerging market selloffs in May and August compounded Argentina’s problems. And Argentinians appear unconvinced that Macri has the political will before next year’s election to cut spending faster and cover debt payments.

3. Is default a possibility?

Despite concerns among some weary Argentines, the nation isn’t staring another 2001 in the face and shouldn’t default anytime soon, according to Martin Vauthier, an economist at Buenos Aires-based consultancy Eco Go SA. That’s because its repayment schedule is manageable over the next year and much of the debt is in pesos, not dollars, he said.

4. Is this similar to or different from Turkey?

The challenges are similar but the policies are night and day. Both countries have large fiscal deficits and large amounts of debt denominated in U.S. dollars. But while Turkey’s President Recep Tayyip Erdogan has unorthodox economic vies, Argentina followed the textbook recipe of hiking interest rates, selling reserves and cutting spending faster. Markets however, are taking a dimmer view on Argentina based on fundamentals, writes Tom Orlik and Felipe Hernandez from Bloomberg Economics. ”Argentina has a larger fiscal deficit and higher inflation than Turkey,” they note.

5. What’s the IMF’s role in all of this?

The $50 billion credit line it extended to Argentina in June was supposed to ease investors’ concerns about Argentina’s large deficits and debt load. It didn’t work, as the peso continued to decline. The IMF planned to disburse money gradually over this year and next, before Macri asked for much or all of it up front. Though Director Lagarde continues to express support for Macri, the IMF is a deeply unpopular institution in Argentina. It loaned billions to the country in December 2000 but didn’t come to the rescue when Argentina defaulted on $95 billion of debt in 2001 — at the time, the largest default by a country in history. The default led to an unprecedented economic crisis, wiping out one-fifth of the economy and causing poverty to soar. This is why Macri’s decision to return to the IMF has been poorly received in Argentina.

6. What else can be done to contain the peso?

With the benchmark interest rate now at 60 percent, the world’s highest, Argentina must turn to less conventional ways to remove excess money in the market. The central bank has sold billions worth of dollars at auctions to defend the currency, but that hasn’t done much good. What Argentina really needs, if it’s going to stop traders fleeing from its currency, is a quick narrowing of the budget deficit. Coming into this year, Macri sought to gradually cut spending. “A fiscal adjustment shock,” Goldman Sachs economist Alberto Ramos wrote in a note, is “the antidote for the market’s lost confidence.”

7. Where does Macri stand politically?

His approval rating hit a new low in August, according to the key index published by a university in Buenos Aires. And he faces a difficult choice. He needs to close the budget deficit faster to get markets on his side, but austerity will probably anger voters already feeling the pain of inflation that’s eroding wages. The big question is whether Macri can get a budget bill for 2019 through Congress with opposition support, then execute it without provoking widespread social upheaval ahead of nationwide elections scheduled for October 2019, during which Macri plans to see for another term.

8. Why does Argentina seem always in crisis?

It’s a country of ample natural resources but a history of poor governance. Political polarization over decades and a tendency to opt for short-term solutions has led Argentina to cycles of boom and bust. The 2001 default that plunged millions into poverty followed a successful run in the 1990s, when one peso was worth one U.S. dollar, which many economists at the time said was an unsustainable policy. These days, $1 equals about 38 Argentine pesos. The 2001 crisis was then followed by years of strong economic growth fueled by a global boom in commodities.

Argentina’s government is weighing reinstating a 10 percent tax on corn and wheat exports, according to a person with direct knowledge of the matter who asked not to be named because talks are ongoing and no decision has been made. The taxes may be published Monday in the government gazette, the person said. Press offices for the agriculture and treasury ministries declined to comment.

Macri plans sweeping changes to restore confidence to markets as the economy enters the second recession in three years and inflation remains above 30 percent. Treasury Minister Nicolas Dujovne will unveil a new fiscal plan on Monday and will then travel to Washington to meet with International Monetary Fund officials to ask for money from a $50 billion credit line to be delivered more quickly.

Macri scrapped export taxes on corn and wheat when he took office in December 2015 as he turned to farmers to revive the economy. The farmers, in turn, lauded his rise to power after years of feuding with his predecessor, and planting soared. Macri also began reducing the tax on soybeans and soy meal and oil, made by crushing the beans.

“It’s not clear where they can rein in spending, so to close the deficit they’re going to have to suspend cutting taxes,” said Amilcar Collante, an analyst at La Plata-based economic research center CeSur.

Argentina is the world’s biggest exporter of soy meal and oil. The country’s crop shipments brought in $21.4 billion in 2017. After a crippling drought this year, production is set to rebound in 2019.