Mubasher: Italy’s populist government could propose a 2% fiscal target for the next year to the European Union (EU), a news report said.

Italian Prime Minister Giuseppe Conte is due to present the new figures to the European Commission President Jean-Claude Juncker in Brussels in Wednesday evening, according to a spokesperson for the premier’s office.

This follows a meeting in which the proposal was discussed between Conte and key ministers working on the budget.

The deficit target will be 2%, Bloomberg News reported, citing a treasury official. The figure was not confirmed by an official at the premier’s office.

The mood among ministers is “positive,” as Prime Minister Conte will present “good arguments” to Juncker in a bid to reach an agreement on Italy’s budget plans, the official said.

The populist coalition of the League and the anti-establishment Five Star Movement has been embroiled in a dispute with the EU over its proposed budget deficit target of 2.4% for the next year.

While the EU insisted that Italy will be sanctioned if its budget plans does not adhere to the bloc’s spending rules, the leaders of the ruling coalition’s two parties stated that they are not willing to back down on their electoral pledges, including pension reform.

A deficit of 2% is not sufficiently low to avoid potential EU sanctions.