The European Commission has taken the first steps in fining Italy over its national budget, saying it deviates from the European Union's fiscal rules and commitments made by the previous government.

The move comes as Italy, which received a European Commission request to adjust its 2019 budget to meet EU parameters, refused to make any substantial changes.

The fear is that the row could escalate into a debt crisis that would hurt the bloc.

"We're already seeing indications from the European Commission that they're not prepared to tolerate what are some fairly ambitious growth targets from the Italian government and a budget deficit, that this point in the cycle, is not consistent with getting their debt burden, which is about 130 percent of GDP, under control," explains Simon French, chief economist at Panmure Gordon & Co. 

"So, what the European Commission's going to do is get the Italian government to come in with more realistic expectations of what can be done over the near-term in terms of fiscal stimulus but also balancing the long-term sustainability of their finances."

It will not escalate into a wider debt crisis for the bloc, says French, "as the contagion risk around the eurozone is fairly limited, particularly with the European Central Bank still in its bond-buying programme. The issue is much more idiosyncratic to Italy rather than the presenting a structural risk of the type that we saw in 2011-2012."

Being a member of the euro remains very popular among the Italian electorate ... But what they're uncomfortable with is the obligations that come with the privilege of being in the eurozone.

Simon French, chief economist, Panmure Gordon & Co.

According to French, Italy's an example of "a slow-burning crisis of what I would describe as 'democratic legitimacy' of the eurozone project in Italy. Being a member of the euro remains very popular amongst the Italian electorate - two-thirds still support ongoing membership. But what they're uncomfortable with is the obligations that come with the privilege of being in the eurozone."

"The obligations are to be relatively austere in terms of their fiscal outlook and something that successive Italian governments have been fairly poor at doing. They've run an average deficit of three percent of GDP over the last 20 years. So, to be asked to pair that back at this time towards two percent, at the same point as they've elected a coalition government who are wanting to be much more expansionary - comes with its democratic challenges rather than its financial challenges."

"The problem is that having gone down the road of the last 20 years of eurozone membership with the economic policy prescription we've had, Italian growth has been less than one percent over the 20-year period. That's simply unsustainable."

"What you need to see to break this impasse is the Italian government saying, 'Look we want to be more expansionary on the fiscal side, but we're also going to do a lot more on the structural reform side to raise the trend rate of growth in Italy,' because ultimately that's what all sides of the discussion want to see."

Cryptocurrencies sell-off 

This time 12 months ago, Bitcoin-mania was all around. But the crypto-hype hasn't been matching reality lately. Bitcoin is down around 75 percent from its all-time high of nearly $20,000, depending on the exchange.

The other major digital coins are also feeling the pain. The sell-off is being blamed on regulatory pressure. As part of a bigger government crackdown on fraud in the digital currency industry, the US Justice Department is reportedly investigating whether last year's 1,500-percent bitcoin rally was due to manipulation.

The securities and exchange commission also announced its first civil penalties this month against crypto founders who failed to register new coin offerings. Digital assets have now lost almost $700bn of market value since crypto-mania peaked in January.

WATCH: Cryptocurrencies sell-off (5:38)

While the value of cryptocurrencies has fluctuated over the years, "there's a growing acceptance and acknowledgement, not just by technologists, but also regulators that blockchain technology and cryptocurrency are very much part of the future architecture of our financial system," says Garrick Hileman, economist at the London School of Economics and head of research at blockchain.com.

Regarding speculation of market manipulation last year, "academics and others looking at trades on certain exchanges that do look suspicious, I think there's a big question mark around that and there's questions around how much trading volume is real, how much is spoofed or is wash-trading."

"There's a general consensus there's been some monkey business at work in some exchanges, and that's all part of the maturing of the space that needs to get cleaned up for institutional investors and retail investors to feel more confident and comfortable owning cryptoassets," he says.

Ultimately, "anyone trading crypto assets needs to do their homework and look under the hood of what exchange or what project they might be interested in. There's still a lot of need for greater regulatory clarity, better data, better research - all of these things are happening but they take time," says Hileman.

Also on this episode of Counting the Cost:

Iran saffron: While US sanctions on Iran have been reinstated, one industry group, in particular, believes it's virtually sanction-proof - the growers and traders of saffron. Zein Basravi reports.

Nissan chair: Despite being regarded as the man who brought back Nissan from the brink of extinction, Carlos Ghosn was arrested and fired this week from Nissan Motors. He is charged with underreporting his income and misuse of company funds. Ghosn was also the driving force behind the Renault-Nissan-Mitsubishi alliance. There is now a leadership vacuum in the operation which sold 10.6 million cars last year, as Natasha Ghoneim reports.

AirBnB: Palestinians have welcomed the move, but lawyers in Israel have launched a class action lawsuit against Airbnb for removing its listings of properties in illegal settlements in the occupied West Bank, as Stefanie Dekker reports.

Tanzania's cashews: Government leaders in Tanzania may soon have 200,000 tonnes of cashew nuts on their hands. They plan to buy the entire crop to try and end a price dispute between farmers and traders, as Catherine Soi reports from the south of the country.

Source: Al Jazeera