The EC recommendations were published by La Repubblica and have been seen by ANSA.
The law, which enables regions to keep much of their tax take for their own spending, has been accused of worsening the inequality between Northern and Southern Italy.
However, Giorgia Meloni says it will make Italy stronger and more democratic.
In its recommendations, the EC said, “the devolution of further competences to the Italian regions entails risks for the country’s cohesion and public finances, as well as on the front of inequalities between regions”.
The EC working document on Italy was drafted in the context of the recommendations on economic, social, employment, structural and budgetary policies.
The opposition is collecting signatures to put the law to a referendum, saying it unduly changes the Constitution and aggravates existing imbalances, especially between affluent northern regions and worse-off southern ones in areas like healthcare.
When it was approved after an all-night session in the House Wednesday morning, government parties waved the flags of Italy’s 20 regions while the centre-left opposition waved the Italian flag.
It was passed by 172 votes to 99.
ANSA