MILAN (AP) — The International Monetary Fund is warning that Italy’s plan to sharply increase spending carries “substantial” risks and would leave the country vulnerable to market turmoil.

In a regular review of the Italian economy, the IMF says Tuesday that “Italy needs to put to rest any concern about public debt sustainability, which recently has resurfaced.”

Italy’s populist government has proposed a budget that would see its deficit bloat to 2.4 percent of gross domestic product, more than three times its previous target. That would keep it from reducing its debt load.

The European Union has asked Italy to revise the budget by the end of Tuesday and the standoff has unsettled investors. They have sold off Italian debt, pushing up borrowing rates.

The IMF recommends Italy tighten its public finances instead.