Also on Friday, the European Central Bank reported that in August this year, foreign investors sold off 17.9 billion euros' worth of Italian sovereign bonds and company stocks - another sign of waning confidence in Italy's ability or willingness to repay its debts.
The Italian government has until midday Monday to respond to the European Union letter, which expresses concern about Italy's structural deficit and its high debt level, and seeks more information about Italy's growth outlook from its new populist government.
In a letter addressed to Italian Finance Minister, Giovanni Tria, the European Commission rejected Italy's 2019 budget draft, labelling it a serious breach of EU budget rules after the Italian government said it planned to increase its already record-high spending, which would cause Italy's public debt to be out of line with the EU's rules on stability and growth.
Moscovici called the difference "unprecedented".
"If one breaks these rules", Kurz said, "then this means that Italy is endangering itself, but of course also is endangering others beyond that".
"I cannot imagine the euro without Italy and Italy without the euro, " Moscovici said after his meeting with Tria during which he delivered the letter.
He joined other government members in efforts to dispel concerns about Italy's euro membership. The two have argued that Italy needs the extra spending to help boost economic growth. He said he hoped that when Italy explained the structural reforms included in the bill that would bring the two sides' positions closer together. "It's a good budget and we'll see it through to the end".
Italy's euroskeptic government is pushing for a reduction of tensions between the European Union and Russian Federation but risks isolation in Brussels as EU partners seek instead stronger measures to deter Moscow from interfering in EU affairs. "In contrast, a more lenient approach would further undermine the credibility of the EC's tortuous fiscal rules and irritate some member states from Northern Europe".
The 5-Star Movement leader, Luigi Di Maio, insists that the draft contains unauthorized changes to extend a tax amnesty to Italians with bank accounts overseas.
Luigi Di Maio, the head of the 5-Star Movement, on Thursday threatened to lodge a formal criminal complaint.
For Rome standing up to Brussels could...
Luigi Di Maio told a late-night talk show that the draft presented to the Italian president contained a proposal to extend a tax amnesty on money held overseas and brought back to Italy.
The 5-Star has opposed tax amnesties in the past but they are popular with the League's voter base, which traditionally comprises self-employed businessmen.
Both parties want to maintain their populist government at least until the European Parliament elections in May, the outcome of which could shift the delicate balance in the governing coalition.