European government leaders have reached an agreement to overhaul the region’s coordinated economic policy, although the changes did not include any amendment to the central bank’s bond-buying program, according to The Wall Street Journal. On Tuesday, governments of the European Union agreed on six pieces of legislation that would improve budgetary policies, toughen budget-violation sanctions, and aim to correct and prevent macroeconomic imbalances that are seen as central to the eurozone’s debt crisis. The European Parliament needs to approve the measures before they become law.
The overhaul disappointed European Central Bank President Jean-Claude Trichet, who had been looking for measures that would allow rescue funds to be used for bond purchases, thereby allowing the central bank to halt its own program, adds Financial Times. The ECB has spent €77.5 billion on bond purchases since the height of the eurozone sovereign debt crisis last May, although recently purchases have slowed. Speculation has increased the policymakers with the ECB will slow bond purchases to put more pressure on governments to take action on growing financing needs themselves.