Italy’s new finance minister Giovanni Tria pledged in an interview with local daily Corriere della Sera  that the country’s new government is committed to the single currency and public debt reduction, saying the recently formed populist coalition will work to meet debt targets for 2018 and 2019 and that the government’s growth objectives will not be met via deficit spending.

Markets welcomed Tria’s measured tone, with Italian 10-year bond spreads (BTP) and the German Bund closing somewhat on Monday morning.

The head of Italy’s Associazione Bancaria Italiana banking association, Antonio Patuelli, expressed his concern over the widening spread between Italy’s 10-year bonds and the German Bund, noting that it could set the debt-to-GDP ratio towards an upward trajectory.

“The spread is a tax that Italy pays on the international markets,” Patuelli told ACRI – Italy’s congress of joint-stock savings banks and banking foundations. “The more the spread rises, the more Italy gets poorer.”

Recalling that a deficit and high debt were present when Italy had its own national currency, Patuelli told the congress, “We must not kid ourselves and put all of the blame on Europe. The rates on the lira in the 1980s were 19.5%,” Pateulli said, noting that the lira was historically one of Europe’s weakest and most volatile currencies prior to Rome’s switch to the euro.

Following a meeting before the weekend’s G7 summit in Canada, Italian Prime Minister Giuseppe Conte, European Commission President, Jean-Claude Juncker, and European Council President Donald Tusk attempted to downplay speculation of a growing confrontation between Conte’s newly formed government and Brussels.

Juncker said the discussion focused mostly on the EU budget, making it clear that Italy “needs Europe and Europe is not complete without Italy,” to which Conte responded positively by calling for “greater solidarity” in Europe when it comes to the issue of migration and growth.