UPDATE 1-EU's Moscovici says doesn't want crisis with Italy, expects answers on budget

The European Commission does not want any crisis with Italy over its budget plans, but it expects answers to its concerns, European Economic Affairs Commissioner Pierre Moscovici said on Monday.

An Italian government source said that Rome was expecting the EU executive to take the unprecedented step to ask it to revise its 2019 draft budget, which includes lifting the deficit to 2.4 per cent of GDP from 1.8 per cent in 2018.

"The European Commission does not want a crisis between Brussels and Rome," Moscovici told France Inter radio. "My state of mind is that of constructive dialogue."

Deputy Prime Minister Luigi Di Maio said on Monday that the Italian government was ready to discuss its budget targets with European Union authorities.

The Italian government is expected to send a letter on its budget to the Commission by noon. Moscovici said the European Commission would meet on Tuesday to discuss the response, adding that he could not say when it would take a decision.

"When you are an EU member and a member of the single currency, of the eurozone, you must respect a number of joint rules," Moscovici said, reaffirming the concerns the EU executive has expressed over the past weeks on Italy's budget plans. Italy's structural deficit is way too high, he said.