The European Parliament and Council negotiators finally agreed Wednesday on twin draft legislative proposals, also nicknamed the "two pack," to boost economic governance.

The "two pack" mainly aimed to strengthen Commission surveillance of national budgetary of all eurozone nations, not just those facing acute financial problems, their economic policies and enhance economic policy coordination.

"The next batch of European Union economic governance legislation should do more to deliver growth and the European Commission's new powers to vet Eurozone countries' budgets will be better democratically controlled," said a statement released by the Parliament.

The proposals were first presented in November 2011 by the Commission. However, it took more than one year before the proposal was approved by the Parliament.

It is reported that the Parliament demanded a debt redemption fund pledge by the Commission in return for its support, but the idea was strongly opposed by some member states, especially Germany.

The Parliament seems to have won an upper hand this time since the Commission has agreed to "establish an Expert Group to deepen the analysis on the possible merits, risks, requirements and obstacles of partial substitution of national issuance of debt through joint issuance in the form of a redemption fund and euro bills," according to the Parliament's statement.

European Commission Vice President Oli Rehn also welcomed the result. "Today, a breakthrough has been reached that will allow a further significant strengthening of economic governance in the euro area." Rehn said.

The deal still needs approval from the Parliament as a whole, the vote is expected to take place in the second week of March, before it comes into force.

"This will mean that the euro area can benefit from a more integrated and effective policy-setting framework already for the 2014 budgetary cycle. The rebuilding and reinforcement of our economic and monetary union is underway." Rehn said.