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As Italian bonds have come under renewed pressure in recent days, Trichet repeated a warning that Prime Minister Silvio Berlusconi’s centre-right government had to meet last month’s pledge of a clear plan to balance the budget by 2013.“This is absolutely decisive to consolidate and reinforce the quality and the credibility of the Italian strategy and its creditworthiness”, he told a conference in the northern Italian town of Cernobbio.
The European Central Bank, which has been buying Italian bonds in the market to try to hold down yields and stop borrowing costs for the eurozone’s third-largest economy from spiralling out of control, has been stepping up its warnings that Rome must act quickly. Adding his voice to calls for action, Italian President Giorgio Napolitano said successive governments had failed to prevent a mountainous public debt from getting out of control and swift action was essential.
“We have hesitated from resolutely and coherently addressing constraints that should have been loosened and broken from the heavy weight of accumulated public debt”, he told the Cernobbio conference.
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