During the eurozone crisis, economists at Bocconi University in Milan popularized the idea of “expansionary austerity:” government spending cuts stimulating confidence and growth. The years after the financial crisis showed how wrong that was. Now economists seem to have a new meme : contractionary fiscal expansion, stimulus that negates itself by undermining confidence and pushing up interest rates.

Either way, these arguments are not decisive. Even on the European Commission’s pessimistic assumptions, the deficits proposed by Rome wouldn’t send the debt burden out of control. What would tip Italy into real crisis would be a sudden upward adjustment in yields not to 3 percent but to 5 percent or more. If that were to happen, caused by a shock to the market’s confidence in Italy, there would be an explosive surge in debt service costs. The government could find itself shut out of funding markets. Italy’s banks would require support from the European Union. Help would be forthcoming only after agreement on a deficit-cutting package. Barring that, Italy could find itself on the way out of the eurozone. This risk is what makes the confrontation between Rome and the commission so worrying. The game of chicken could easily spook the markets.

Currently, market confidence is still supported by European Central Bank bond purchases. In 2019 the E.C.B.’s outgoing president, Mario Draghi, a longtime advocate of Italian discipline, is stopping the bank’s bond buying. Tension is set to rise.

The European Commission is, of course, bound to defend its rules. But how does the European Union expect the confrontation to play out?

Brussels has a limited range of sanctions at its disposal. Unlike Greece, which was a net recipient of European Union largess, Italy is a net contributor to the European Union’s budget. It won’t be easy to make penalties and fines stick.

It will therefore have to be the markets that deliver the discipline. But that is a terrifying prospect: Not only is Italy’s debt huge, but Italy’s banks are not minnows, either. Italy is both too big to fail and too big to bail.

So what is the game plan? If the commission is gambling that the budget crisis will force Italy’s government to fold, what direction does it imagine the government folding in?