Italy is preparing to negotiate a new deal with the EU that will allow it to reject the politics of austerity and boost public spending in an urgent bid to rescue its crumbling economy.

New figures released on Friday showed the Italian economy achieved 0 per cent growth in the second quarter of this year, down from an already disappointing 0.3 per cent in the first quarter. And experts fear the government could be forced to downgrade its growth forecast for this year to 0.8 per cent or even less.

Speaking to the daily newspaper La Stampa, Matteo Renzi’s economic development minister, Carlo Calenda, said Italy was “fighting to change” a deficit reduction target for 2017 of 1.8 per cent, set by the European Commission.

“We are discussing with Europe how to address the absolute necessity of boosting public and private investment,” Mr Calenda said.

Davide Policastro, an Italian political analyst, told The Independent that the government needs the EU to agree to relax the rules in order to “relaunch” its stalling economy.

It is the polar opposite of the UK’s policy of austerity - and risky, for a country which already has a ratio of debt to GDP of more than 130 per cent.

“The government wants a more expansive - and expensive - politics, but to do so it needs to break the EU cap of the deficit/GDP ratio,” he said.

“In the mind of the government, a new policy of increased expenditure in the public sector, on things like infrastructure projects, could relaunch the economy by boosting the movement of capital.”

6 ways Britain leaving the EU will affect you Show all 6 1 /6 6 ways Britain leaving the EU will affect you 6 ways Britain leaving the EU will affect you More expensive foreign holidays The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more nito100 6 ways Britain leaving the EU will affect you No immediate change in immigration status The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay Getty 6 ways Britain leaving the EU will affect you Higher inflation A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum AFP/Getty Images 6 ways Britain leaving the EU will affect you Interest rates might rise The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output Getty 6 ways Britain leaving the EU will affect you Did somebody say recession? Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018 AFP/Getty Images 6 ways Britain leaving the EU will affect you And we wouldn’t even get our money back All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget Getty Images

At the age of just 39, Mr Renzi was swept to power two years ago on a centre-left platform of progressive reforms.

He has since described the UK’s decision to leave the EU as an opportunity for a rethink of the bloc’s economic policy. He called for “more growth and more investment, less austerity and less bureaucracy”, adding that “this is the line we have proposed for two years, at the beginning in isolation”.