The controversial budget sparked fury in Brussels, with European Commission President Jean-Claude Juncker even warning Italy they would trigger a Greek-style depression.
The EU, the European Central Bank and the International Monetary Fund loaned Greece a total of £259 billion (€289 billion) in three successive bailout programmes in 2010, 2012 and 2015.
In what was the biggest bailout in global financial history, Athens only this summer finished completing the emergency loan programme.
Mr Juncker said this week: “Italy is distancing itself from the budgetary targets we have jointly agreed at EU level.
“I would not wish that, after having really been able to cope with the Greek crisis, we’ll end up in the same crisis in Italy. One such crisis has been enough.
“If Italy wants further special treatment, that would mean the end of the euro. So you have to be very strict.”
Angelo Ciavarella, Head of Global Markets INFINOX Capital Ltd, suggested the comments from Mr Juncker were overstretched as the state of both economies are too different to compare.
He told Express.co.uk: “I wouldn’t go that far – I would say that they are two different situations.
“Italy is a way bigger economy, the third biggest economy in the eurozone so the departure of Italy would really put in jeopardy the entire EU project.”
But he added: “I don’t think we are getting there, at least not in the short term.”
The Italian government later backtracked on its budget plan as it announced a somewhat watered down proposal by tapering deficit targets beyond 2020.
Prime Minister Giuseppe Conte acted to appease investors and EU creditors on Wednesday, saying the country was now eyeing deficits of 2.1 percent in 2020 and 1.8 percent in 2021.
Mr Ciavarella was not surprised by the turnaround, which came despite Deputy Italian Prime Minister Luigi Di Maio, of the Five Star Movement, having previously refused to “backtrack by a millimetre” on the budget proposals.
Mr Ciavarella said: “They are trying to accommodate some of the possible EU requests that they are going to make for sure.
“Italy is a dog that barks but doesn’t really bite because they need money, and they know it.
“They don’t really want to have a confrontational attitude with Europe.
“I’m positive they are going to find a compromise with the EU.”
Rome must submit its draft budget proposal to the European Commission for review by October 15, of which then the European Commission will make a decision.
Spokeswoman Natasha Bertaud said: “The position of the Commission remains unchanged.
“We will assess the draft budgetary plan for 2019 after its official presentation.”
The eurozone sets overall targets of 3 percent annual deficits and commits countries to move toward 60 percent overall debt.
Italy’s debt is already the second highest in the eurozone as a share of economic output after Greece, at about 131 percent of GDP.
Italian economy minister Giovanni Tria was forced to defend the deficit budget over the weekend as he pledged the debt level will be brought under control.
He suggested this would be possible by seeing growth in Italy through investments over the next two years.