The Italian government has approved a series of reforms designed to reduce 3.4 billion euros from its deficit this year. The cut is equivalent to 0.2 percent of GDP and will include measures to fight tax evasion and reduce public spending. 

Rome also adjusted its 2017 growth target to 1.1 percent, up from 0.9 percent in 2016. Prime Minister Paolo Gentiloni has pledged to reduce the deficit-to-GDP ratio to 2.1 percent in 2017. 

Italy has the second highest public debt among all European Union countries, standing at 133 percent of its GDP in 2016. The country's fiscal policy has come under increasing pressure from Brussels, as it warned of restricted access to EU funds if Rome did not stick to the EU's Stability Pact rules.