The European Commission has asked Italy to reduce its budget deficit this year, signalling Brussels wants Rome to reverse plans to overshoot previously agreed targets.

"We are negotiating, we are working," Gentiloni said in a joint news conference with Spanish Prime Minister Mariano Rajoy.

"As always we will respect the EU's rules but we will do so without taking any measures that could depress the economy."

(Writing by Isla Binnie; editing by Francesca Landini)