Meanwhile, the pressure on Italian assets continue to mount after the European Commission called Italy's spending plans "excessive" in a letter to Rome, even before the formal assessment of the fiscal plan is being released. The ratings firm also added that the government's policy proposals did not offer a set of reforms that could lift Italy from its anemic economic growth.
While Italy's deficit is well within the 3 percent limit laid out in treaties, the commission has demanded smaller gaps for Italy to bring down its debt load, the largest in Europe in absolute terms and second only to Greece's as a percentage of the economy.
He told a late-night talk show that the draft budget presented to President Sergio Mattarella's office contained a proposal to extend a tax amnesty on money held overseas and brought back to Italy.
The budget plans of Italy's populist government, which breach European Union borrowing rules, have prompted investors to shed €67bn ($77bn) of Italian government bonds since May.
But the country's populist coalition government has done the opposite - offering a draft budget that boosted overall spending.
After initially rebuffing criticism from Brussels over a sharp deficit increase in the draft 2019 budget, which the European commission has labelled an unprecedented breach of EU fiscal rules, Italy appears to have softened its stance. This means Italy will fall foul of a previously mandated maximum deficit level of 0.8% of GDP.
It includes a series of pension and tax changes that will cost 37 billion euros ($43 billion), of which 22 billion will be paid for by expanding the deficit.
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In the morning, Mr. Salvini had assured that the government was not going to be "intimidated by the rating agencies, which have done in the past, errors of judgment, vivid, and who are wrong this time". Both the budget's fiscal expansion plans "and the size of the deviation are unprecedented", they said.
Analysts say Rome is in a good bargaining position, given the Eurozone's ongoing difficulties with Brexit.
"Given how damaging Brexit is to the European Union project, a loss of Italy would be devastating and to be avoided at all costs - hence I think (that) Italy's hand is quite strong".
Without recourse to investors, bank chiefs would be left seeking a further bailout from ministers, but growing uncertainty over Italy's prospects would make it hard for them to raise capital.
The so-called structural deficit, a key measure for the commission, which strips out effects of the economic cycle and one-off spending items, is also off the mark.
The spread between yields on Italian and German bonds climbed to its highest level in nearly five years on Friday as a row between Rome and Brussels over the country's budget threatens to boil over.