The European Commission has told Italy to revise its budget, an unprecedented move with regard to an EU member state.
The Commission is worried about the impact of higher spending on already high levels of debt in Italy, the eurozone's third-biggest economy.
Italy's governing populist parties have vowed to push ahead with campaign promises including a minimum income for the unemployed.
The country now has three weeks to submit a new, draft budget to Brussels.
The Commission said the first draft represented a "particularly serious non-compliance" with its recommendations.