Trichet :Italy's deficit cuts 'absolutely decisive'

European Central Bank chief Jean-Claude Trichet told Italy on Saturday that meeting its deficit reduction targets was absolutely decisive for the country's credibility. "It is essential that the target which was announced to diminish the deficit will be fully confirmed and implemented," Trichet said at an economic forum in northern Italy. In an interview with the Italian business daily Il Sole 24 Ore Trichet had said Friday that the 45.5-billion-euro ($65.6-billion) package announced last month was of "extreme importance" and it was "therefore of the essence" that the amount be confirmed. It "is absolutely decisive to consolidate and reinforce the quality and the credibility of the Italian strategy and of its creditworthiness," he told politicians and business leaders meeting at the Forum Ambrosiano until Sunday. Italian President Giorgio Napolitano, who spoke via video link from Rome, said he was "convinced that it is essential that the targets are confirmed and materialise". Napolitano expressed his "confidence" that this will happen and called on Prime Minister Silvio Berlusconi's coalition government and the opposition to rapidly approve the austerity package in parliament. The European Central Bank had to step in last month and buy tens of billions of eurozone bonds after investors fled Italian and Spanish debt and sent their borrowing costs to unsustainable levels. The ECB did so only after having sent Italy a list of budget reforms it considered essential. Rome has announced the outline of the package, but Berlusconi's coalition is now engaged in a divisive debate over the painful measures before their parliamentary approval, and recently backed down on part of a pensions reform following public disapproval.