A deal between the European Parliament and Council on twin legislative proposals to boost economic governance, the so-called two pack', could not be found before the year-end deadline set in the 2012 October European Council conclusions. The matter remains a priority and should be agreed in the first semester. Easing the deadlock will depend mostly on whether the guarantees provided by the Commission to push along the mutualisation of debt agenda in the short to medium-term are deemed satisfactory by a majority of deputies.

Over a year ago, in November 2011, the Commission published twin proposals on fiscal discipline for euro countries: one aiming at strengthening economic and budgetary surveillance of member states under market pressure - COM(2011)819 - and one to improve European coordination of national budgetary plans - COM(2011)821. EP and Council have reached an agreement on the former text, draftsman Jean-Paul Gauzes (EPP, France) explained to Europolitics.

Parliament and Council are, however, far apart on the second proposal, where Elisa Ferreira (S&D, Portugal) is the rapporteur. MEPs request commitments towards the setting up of a redemption fund that would part-mutualise government debt and the issuance of short-term eurobills. This is a no-go for a majority of member states, especially Germany, where general elections are scheduled for the autumn. Gauzes believes it is "a waste of time" to expect anything on this front from national governments.


Yet progress on the mutualisation of debt agenda is essential to garner the support of the S&D, ALDE and Greens-EFA groups in Parliament. To unlock...

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