The latest draft proposals from the Council presidency, presented last night to Parliament, appear to offer a breakthrough on the economic governance package, the so called '6-pack of legislative measures to strengthen surveillance and sanctions in the eurozone in the wake of the financial crisis which exposed deep flaws in the system.

Guy Verhofstadt, leader of the Liberal and Democrat group in the Parliament welcomed the progress in the negotiations as a sign that there could soon be a satisfactory agreement:

"We are not completely out of the tunnel yet but the end is in sight.  It is a positive step that Member States are now accepting automatic sanctions in the preventive arm of the Stability and Growth Pact, and not just in the corrective arm. The details still need to be ironed out but the principle now appears to have been accepted, and indeed has been born out by the summer of crisis and instability."

"The ALDE group in particular feels vindicated in its insistence on this point in June that it is fundamental for the preventive arm of the Pact to be strengthened in this way. The Roman axiom that 'prevention is better than cure' applies particularly in this case. The devastation in the financial markets, stock exchanges and national treasuries is ample evidence of this. It is logical to have corrective sanctions for breach of a deficit ceiling but more important to avoid such a breach in the first place."

Sylvie Goulard (Modem, FR), one of parliament's negotiators as rapporteur on the enhancement of budgetary surveillance in the legislative package added:

"After such a crisis, we have to put in place a strict system of surveillance, at an early stage, of the fiscal policies of the Member States. We also need a bold macroeconomic surveillance that checks all the imbalances, surpluses, as well as deficits. On this last point we are waiting for a move from the Council."

In a parallel development today, the German Constitutional Court ruled that support for Greece was not unconstitutional, whilst underlining the future role of the Bundestag.  ALDE MEPs welcome the judgement which enables the strengthening of economic governance to go ahead and consider that eurobonds remain important for both discipline and solidarity in the eurozone.