In late September the European Parliament approved new legislation to tackle the shortcomings in the existing economic governance framework for co-ordinating fiscal and structural policies. The so-called “Six Pack” is a step in the right direction as the Stability and Growth Pact will be strengthened; imbalances and competitiveness will be monitored at an earlier stage.
The central bank will decide separately on a list of eligible securities on the basis of proposals made by the Finance Ministry. The banks must start complying with new reserve requirements from 11 January 2023, using domestic government debt securities to meet a portion of their required reserve ratios if they chose to do so.