Italy must avoid “at any cost” an EU infringement procedure over its deficit and public debt and negotiate with Brussels a “serious, gradual and structural” budget adjustment for the next three years, business lobby Confindustria said.

The European Commission is closely watching Italy because of the country’s huge public debt, proportionally the second highest in Europe after that of Greece. The Commission will issue a report on Italy’s state finances on June 5 that could call for the start of disciplinary measures.

“An infringement procedure has to be avoided at any cost”, Vincenzo Boccia, head of Confindustria, said, adding that Rome should craft a 32 billion euro budget for next year to comply with EU budget rules.