EU Commission President Jean-Claude Juncker welcomes Italian Prime Minister Giuseppe Conte at a working dinner in Brussels, late November. | Emmanuel Dunand/AFP via Getty Images Italy waves white flag on budget Rome will cut spending plans to avoid sanctions from Brussels.

ROME — The game of chicken between Rome and Brussels over the Italian budget could soon be over. Because Rome is about to give in.

Italy's populist ruling coalition is dialing back its spending plans to avoid triggering disciplinary action by the European Commission, according to two Italian officials in Rome briefed on the ongoing negotiations.

Rome proposed running a 2.4 percent deficit next year, putting it on a collision course with Brussels, which had threatened to slap Italy with an excessive deficit procedure as early as December 19, potentially costing the country up to €9 billion in sanctions. In a revision to its plans, the government intends to drop the proposed deficit for 2019 to 2 percent, according to the two officials.

"We didn't discuss numbers but we're working on a solution — which is both in Italy's and the EU's interest — to avoid the excessive deficit procedure ... we're in the same boat," Prime Minister Giuseppe Conte said on the sidelines of his meeting with European Commission President Jean-Claude Juncker and Economic Affairs Commissioner Pierre Moscovici at the G20 in Buenos Aires.

According to the two officials, the European Commission gave the Italian government a little leeway "provided the GDP-to-deficit ratio doesn't go over 1.95 percent." Italy had earlier agreed to keep the deficit at 1.8 percent.

For days, top Italian officials have repeated they aren't "fixated on decimal numbers" and signaled they are open to revisions. But on Monday, Interior Minister Matteo Salvini, head of the far-right League party, told reporters "the EU can't ask for a 1.9 percent deficit."

In a joint emailed statement on Sunday night, Salvini and his coalition partner Labor Minister Luigi Di Maio, leader of the anti-establishment 5Stars, said: "We are in good hands with Prime Minister Conte leading the negotiation."

Keeping the 5Stars and the League on board with spending cuts might prove to be the most difficult part of the prime minister's task.

The "substantial rework" of the budget demanded by the Commission would translate into less funding available for the ruling coalition's flagship measures — a limited universal basic income and a pension overhaul — which are due to start in early 2019, according to the government's stated plans.

Salvini and Di Maio have said they won't give up on either of them.

Conte's job isn't easy. As Italy's negotiator-in-chief, he has been tasked with avoiding a potentially catastrophic excessive deficit procedure while at the same time helping the government deliver on its promises to voters. According to the latest opinion polls, 68 percent of Italians want the government to rework the budget to avoid the collision with Brussels.

Two center-right MPs in Rome, who discussed the matter with top League officials and spoke on condition of anonymity, said "Salvini has passed the ball to Conte, and he's willing to play along to avoid further problems within his own party."

The MPs said top League officials are worried that the basic income pledge, which would mainly target Italians living in poverty in the south of the country, would alienate the party's base in northern Italy.

Meanwhile, 5Star officials privately insist they are keen on avoiding a disciplinary procedure and want to "engage in a constructive dialogue with the Commission" but also want the basic income and the pensions reform to be implemented as soon as possible.

"It's a work in progress," one 5Star official said.

On Monday, eurozone finance ministers will scrutinize individual country budgets, including Italy's. The ministers will be the ones to decide, at a later date, whether an excessive deficit procedure should be launched. On the sidelines of the meeting, Moscovici confirmed talks with Italy "are going in the right direction."

"We'll eventually avoid the disciplinary procedure, but the government must take things one step at a time without handing Brussels too many concessions or they will look weak in the eyes of voters," one technocrat at the Italian Treasury said.

Bjarke Smith-Meyer contributed reporting.