The Italian government has capitulated to Brussels on its budget:
Prime Minister Giuseppe Conte forged a deal with populist leaders to submit a revised budget proposal to the European Commission, in a bid to avert fines against Italy.
Conte’s euroskeptic deputies Matteo Salvini and Luigi Di Maio, who hold most of the political power in the administration, set aside their opposition to concessions at talks running late into Sunday night and agreed on a new package to send to Brussels, government officials said.
Because shrinking your economy is the best way to get out of debt, if you are a mad dog or a German economist.
The Italian budget is already in primary surplus (excluding debt payments), but more cuts are demanded because of an unwillingness to recognize that Brussels’, and Berlin’s, world view is creating poverty and right wing populism.
Why on earth would you exclude debt payments?
Because it means that the demands of the EU are contractionary, and as such it means that they are asking Italy to pay off its debts by cutting its "wages".
Take, for example, the drop in debt to GDP ratio in the US after WWII.
It occurred from economic growth, the dollar value of the debt actually went up a bit.
The EU practices German economics, which is what made the German experience during the great depression particularly brutal, and led to that bad man in a mustache.
It's bad economics, and it leads to the rise authoritarian/Fascist movements in Europe, just like the last time.