UPDATE 1-EU states see considerable improvement in Italy's public finances - source

Representatives of European Union governments see a "considerable improvement" in Italy's fiscal plans after the government announced new measures this week, an EU official told Reuters.

The EU executive is expected to announce on Wednesday at about 1030 GMT whether it intends to recommend a disciplinary procedure against Italy over its large debt. EU governments have to endorse the European Commission's decision. In a meeting this week, they appeared to be pleased with concessions offered by the Italian government, the official said.

Italy's deficit this year is expected to be at 1.9% of output, much lower than previously forecast, EU governments' envoys said. Governments also saw a structural improvement of 0.3% this year, and "considerable improvement" in Italy's fiscal plans for next year, the official said.

However, some states led by Germany and the Netherlands showed scepticism over Italy's fiscal plans, the official said, while France was supportive of Italy's efforts.