The European Parliament has reached an agreement this week on the legislative proposals known as the "two pack" during three way talks with the European Commission and the Irish Presidency. This provides the European Commission with new powers over the national budgets of member states in the eurozone, such as Malta. The pack consists of two pieces of legislation designed to deepen fiscal coordination on a European level by giving the Commission greater control over the national budgets of member states. In addition, the two pack provides for greater economic scrutiny. The two pack compliments the six pack and the fiscal compact which were introduced last year.

Both legislative measures contained in the two pack were first put forward by the Commission in November 2011. The first piece of legislation aims to strengthen economic and budgetary surveillance over member states facing possible economic difficulties. When the Commission deems it necessary it may put a member of the eurozone that is under market pressure under "enhanced surveillance". Once a member state is under surveillance it must regularly present the Commission with updates on the state of its banking and financial sectors. In addition, the member state is required to present a report on all of its economic prospects. A clause that would have allowed the Council to "recommend" that a member state under market pressure apply for a bailout was not included in the final piece of legislation. Member states that are under the surveillance of the troika are subject to reviews each quarter. Member states that have exited troika supervision are reviewed twice a year.

The second legislative measure in the two pack aims to improve the European coordination of member states national budget plans. Member states in the eurozone will have to make their national budgets for the following year public by 15th October at the very latest. The Commission will now have the power to evaluate the budget of the members of the eurozone. In addition, it will have the power to ask a member state to redraft their budget when it seriously deviates from the deficits obligations. A revised budget must be submitted three weeks after the initial deadline. However, the Commission can only requested a revised budget in exceptional cases. Member states can choose to ignore the Commission's request but must be prepared to face sanctions for doing so.

Trying to reach an agreement on the two pack has been a long and complicated process. The European Parliament was not against the Commission proposal as such, however, they wanted a European Redemption Fund to be introduced in return. This type of fund was proposed by a German economist. It would provide for the mutualisation of eurozone debts that reached over 60% of a member states GDP. This would then be paid down over 20 years at a cheaper rate. Member states such as Germany strongly opposed the setting up of such a fund. The creation of a European Redemption Fund was considered in the Commission's blueprint for a genuine Economic and Monetary Union as one of the medium term measures. A compromise was therefore reached; the Commission agreed to set up a panel that would examine the viability of such a fund. The panel will present its report and its recommendations in March 2014.

The two pack still needs to be formally adopted by the Parliament and the Council. This is due to take place in March and will therefore be applicable to the 2014 budgetary cycle of the eurozone member states. It is felt that the introduction of legislative measures such as the two pack and the six pack will assist in preventing economic crises in the future. Member states such as Germany had hoped to be more ambitious in the legislative measures. They had sought to further fiscal discipline; however, this is not possible under the current treaties and would therefore require treaty changes.