The EU's executive Commission, which must vet Italy's 2019 draft budget, has already warned that the nation's significantly higher deficit targets represent a deviation "unprecedented in the history" of EU budget rules.
Moscovici met Economy Minister Giovanni Tria in Rome to present a letter outlining concerns over Italy's draft budget.
Arriving at the EU summit in Brussels, Conte acknowledged that budget plans to boost welfare spending, cut the retirement age and hike the deficit were unlikely to please the European Commission, which polices euro zone states' fiscal policies.
Before the meeting, Austrian Chancellor Sebastian Kurz said fiscal rules should be respected by all. The EU ceiling is 60 percent.
The decision cited "material weakening in Italy's fiscal strength, with the government targeting higher budget deficits for the coming years", as well as debt holding near the current 130 percent of GDP "rather than start trending down as previously expected".
Italy's budget proposal is considered out of line with commitments made earlier, with a proposed deficit of 2.4 percent.
The EU commission chief said Italy have used all the elements of flexibility of EU rules, and that leaders don't want to add more room for manoeuvre for Italy.
Brussels began on Thursday an arm of iron, with the populist coalition in power in Italy in calling for a formal "clarification" to Rome on its fiscal slippage "unprecedented".
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In what could be a further source of concern, Deputy Prime Minister Luigi Di Maio, leader of the 5-Star party, said on Wednesday a legislative text on a partial tax amnesty had been "manipulated" before its final approval. The 5-Star Movement opposes such a move as it risks laundering "corrupt or mafia capital".
Concerns over Italy's budget spending adding to the massive debt of the eurozone's third largest economy could hamper efforts to reform the framework of the EU's single currency, Dutch prime minister Mark Rutte warned his Italian counterpart on the sidelines of the European Union summit on Thursday (18 October).
Matteo Salvini, the leader of the League party, called the accusation "surreal".
If it is not amended, the Commission could reject the draft by October 29 in what would be an unprecedented move that could further rattle financial markets.
Premier Giuseppe Conte told reporters in Brussels that he would review the draft law line by line when he returns Friday to Rome.
Dutch Prime Minister Mark Rutte said on Twitter he had expressed his concerns to Conte on Thursday, and that the Commission had the Netherlands' full support in making sure European Union fiscal rules were respected.
At the heart of the concerns is Italy's public debt, which amounts to 2.3 trillion euros, or 131 percent of Gross Domestic Product (GDP), the highest rate in the eurozone after Greece.