Italian Economy Minister Pier Carlo Padoan denied a report in La Stampa newspaper on Sunday which said he threatened to resign if effective reforms and planned privatisations are not carried out. In a statement, the Treasury said the article placing doubts over Padoan continuing his tenure was "totally unfounded" and dismissed the quotes attributed to the minister as fictional.

"The minister calls the rumours of his resignation 'absurd' and instead confirms his determination to press ahead in coming months with the reform efforts and the moves to rebalance the budget and to support growth launched by the Italian government in 2014," the ministry said.

Since former Prime Minister Matteo Renzi stepped down last year after losing a referendum on constitutional changes, the ruling party has been plagued by internal conflict and prospects for economic reforms have dwindled. There is also growing sentiment across the political spectrum against Brussels.

The European Commission had asked Italy in January to cut its budget deficit this year by some 3.4 billion euros ($3.6 billion) more than Rome had targeted in its 2017 budget. Italy said it would increase revenues and cut spending to meet Brussels' concerns and the fiscal correction would be contained in a multi-year budget plan, known as the Economic and Financial Document, to be presented in April.

Copyright Reuters, 2017