Intensive negotiations on the proposals were launched in the final quarter of 2010. A tightening of the Stability and Growth Pact and the introduction of surveillance of macroeconomic imbalances, which can put public debt sustainability at risk even when fiscal policy-making is prudent, was proposed for both euro area and non-euro area countries, although sanction provisions for strengthening the enforcement of budgetary surveillance were proposed only for euro area countries in the first phase.
The aims of the proposals to enhance economic governance were to introduce more effective sanctions against euro area member states that breach the Maastricht fiscal rules and to strengthen the emphasis on prudent fiscal policy-making by the Member States even in situations where the reference values of the Treaty in the area of public finances are not exceeded.
The proposal laying down requirements for national fiscal frameworks was also the subject of a fundamental debate. The aims of this proposal are to enhance the transparency of the budget process and to increase the accountability of its individual players at the national level. To this end, the proposal will specifically concentrate on government accounting and statistics, macroeconomic and fiscal forecasts, numerical fiscal rules and medium-term budgetary frameworks.
The ECOFIN Council approved a general approach to the above proposals on 15 March 2011. At that moment, negotiations were launched with the European Parliament in order to reach agreement and pass the new legislation.