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Working Group on the Methodology to assess Lisbon related structural reforms

At the Lisbon summit in March 2000, European Union leaders set out the Lisbon strategy to modernize Europe and to strengthen the resilience of the EU's economy through structural reforms.

At the Lisbon summit in March 2000, European Union leaders set out the Lisbon strategy to modernize Europe and to strengthen the resilience of the EU's economy through structural reforms.


The Working Group on the methodology to assess Lisbon related structural reforms (LIME) was set up to drive forward the development of methodological approaches to track, analyse and model structural reforms carried out in the context of the Lisbon strategy.


Following the strengthening of the economic governance framework the main purpose of the working group is to contribute to the analytical underpinnings of the Macroeconomic Imbalance Procedure (MIP), including the design of the scoreboard in the Alert Mechanism Report (AMR), and to the development of tools and surveillance instruments for the assessment of the nature and drivers of imbalances and their spillovers as well as policy responses which could be relevant for their correction. The LIME working group should also contribute to the development of analytical tools that allow evaluating the impact and interlinkages of structural policies and their reforms. The LIME working group will also provide input on specific issues at the request of the EPC.


The LIME working group will continue to be a technical and methodological group.

Main tasks

1. Regarding work related to the MIP the working group should focus on the following main areas:


  • Assess the appropriateness of the AMR scoreboard indicators and thresholds and of the auxiliary indicators of the MIP (including social indicators). When necessary, the scoreboard can be updated as new information and possibly better indicators become available and LIME should be active in ensuring they are appropriately analysed and maintained. LIME should also have a role in the review of the application of the MIP which is established by the corresponding regulations, in particular if this implies any revision of the scoreboard.


  • To ensure transparency and robustness work on the analytical frameworks underpinning the implementation of the MIP and in particular methodologies that can underpin the identification, nature and degree of severity of external and internal imbalances, the nature of the on-going rebalancing and what are effective policy responses. This work shall also include an ex post evaluation of these analytical frameworks used in the MIP following their implementation. LIME should also work on the policies to facilitate the reduction of internal and external imbalances.


  • LIME will organise its work related to the MIP around four thematic work streams covered by the main variables of the scoreboard:


    • Deleveraging of private sector balance sheet positions;
    • Drivers of external price and non-price competitiveness developments;
    • Housing and mortgage market developments;
    • External sustainability assessment
    • In this context also work will be done to explore the nature of inter-linkages and spill-overs across countries, sectors and markets as well as some additional thematic aspects relevant for the MIP (including rescue and recovery frameworks as well as work on the 'internal' exchange rate that impact the allocation between tradable and non-tradable sectors).


  • Discuss technical and analytical aspects of the In-depth Reviews (IDRs) in preparation for subsequent EPC discussions considering the often rather complex issues related to the cause of macroeconomic imbalances, and in view of the wide range of possible policy responses. The discussion in LIME should focus on how the methodologies were used for the identification of imbalances and how they support the assessment of the imbalances done by the Commission.


2. Structural reforms are also an important area for the work of the group. The working group will focus its work on: 

  • Methodologies and analytical tools that can help identify, notably in the context of the European Semester and the Europe 2020 strategy, growth-enhancing structural reforms drivers of potential growth and assess the impact of structural reforms on growth, employment and competitiveness as well as the adjustment capacities of economies in EU/EMU. The working group could also explore the inter-linkages across policy goals by assessing either qualitatively or quantitatively the impact of structural reforms on competitiveness, potential output, public finances and the correction of imbalances.


  • Prepare thematic reviews for the EPC on the basis of the work in the thematic work streams. LIME could also contribute to other country reviews sessions when dealing with issues related to macroeconomic imbalances and/or raising growth potential, and to make sure that the analytical work developed effectively underpins the surveillance procedure in the European Semester. 


  • A new task for the LIME will be to prepare subsequent EPC discussions on the implementation of country specific recommendations and country specific and horizontal challenges as presented in the Staff Working Documents in the context of the European Semester. No additional working groups will be required for this task. 


In order to carry forward the work, LIME will continue drawing, among others, upon analysis and technical notes provided by the Commission services. LIME Members, including the ECB, are also invited to actively contribute, both individually and/or in small groups of countries, in the preparation of technical inputs on issues where they have expertise.


The members of the working group comprise representatives with an economic background from all Member States, the Commission and ECB. The Group could also involve other experts from research institutions etc. (e.g. OECD). Membership in the LIME would be of up to two experts from each Member State wishing to participate, based on the capability to contribute. Participation could be varied according to the topics being examined.


On an ad-hoc basis, when discussing the implementation of country specific recommendations, representation by Member States in LIME can be supplemented by one additional participant.   

Interactions with the work carried out by other groups

In carrying out its mandate, LIME should work closely with the other working groups of the EPC taking full advantage of their specific expertise. Tasks assigned to the Output Gap Working Group and/or the Ageing Working Group shall not be duplicated, but their work could be used by LIME when it provides a useful input for carrying out the mandate of LIME. While the MIP are within the exclusive remit of LIME/EPC/ECOFIN, LIME discussions on the evolution of the social indicators added in 2013 to the auxiliary indicators accompanying the scoreboard may involve a consultation of the Employment and Social Protection Committees. This could be done with the Chairman of LIME attending the discussions in the Employment and Social Protection Committees on these issues and reporting back to LIME.

Work programme and reporting

LIME will draw up a biannual work programme. The work programme will be presented to the EPC for information. Summary reports on LIME activities and outputs will be submitted by the Chair to the EPC subsequent to each LIME meeting.


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