The vote was not without acrimony as centre left and centre right groups were divided on whether the timing was right for a vote.  “The world was a different place when the Commission made its proposals and the Council is also shifting its position on how much austerity is needed”, said Elisa Ferreira (S&D, PT), one of the rapporteurs, said before the vote.

“Changes in the political environment happen all the time.  We should vote because this legislation should enter into force as quickly as possible in view of the persisting crisis” Jean-Paul Gauzes (EPP, FR), the other rapporteur, replied. A slim majority was then secured for the votes to be taken.

Both texts were subsequently adopted with only slim majorities and a decision was then taken not to open negotiations with the Council and instead turn to the plenary to test the level of backing of the whole house. The first negotiation meeting, scheduled for Tuesday, is therefore cancelled.

In line with shifting sentiment, both texts stress the need to ensure that fiscal monitoring does not hamper growth. The Commission’s country-by-country assessments would therefore need to be more comprehensive, to ensure that budget cuts are not made at the cost of killing off investments with growth potential.  Moreover, for countries being asked to undertake significant cuts these efforts must not harm investments in education and healthcare.

Member States would also be required to detail which of their investments had a growth and jobs potential and the deficit reduction timetables would be applied more flexibly in exceptional circumstances or in a severe economic downturn.

The adopted texts take up the debt issuance reporting requirements advocated by Member States in their common position on the “two pack”, but also go much further. For example, a specific process for coordinating debt issuance annually is proposed and countries would be required to report in advance on their debt issuance plans to the Commission and Council.

Most importantly on the matter, a European Debt Redemption Fund would be set up and, one month after the legislation’s entry into force, the Commission would present a roadmap for introducing Eurobonds and a proposal for a growth instrument, which would mobilise around 1% of GDP per year over a ten-year period for infrastructure investment.

However, the centre right group stressed that it would fully support the principle of a redemption fund only if the proposal were backed by an analysis, which the text calls on the Commission to carry out by the end of this year.

A further addition to the Commission’s proposals is a provision on legal protection to countries facing bankruptcy, to give them more stability and predictability in tackling their problems.  Such a rule would provide more clarity where a country is on the verge of default.  Once under such protection, a country could not be declared to have defaulted, its creditors would need to make themselves known to the Commission within two months, and loan interest rates would be frozen.