As I said, whether the Italian proposal is goo or bad is besides the point. The Italian government is being prevented from governing its own economy on a matter of vital economic importance and in the way it sees fit, by EU regulation. It may be that the Italians are wrong and Brussels is right, but that seems to me like a pretty clear loss of sovreignty over the second most vital national interest (after security).
LOLZ. Of course it is. This was a central issue in designing the union which would have a single currency and CB but multiple fiscal authorities. It would make it impossible for the CB to use monetary devices to do its job of steering the economy. The limits on the EU governments' fiscal policies was a critical factor that was necessary to make the EU work and everyone understood it before they signed on.