Working Group on the Methodology to assess Lisbon related structural reforms

Scope

The LIME working group is intended to drive forward the development of methodological approaches to track, analyse and model structural reforms carried out in the context of the Lisbon strategy and the Integrated Guidelines in order to increase transparency, visibility and ownership of the Lisbon process.

It should continue its work on the development and refinement of relevant methodologies to assess structural reforms at national and EU level and contribute to the debate on the Lisbon strategy post-2010 and the role of structural reforms in exit strategies from the economic crisis. Basic documentation for the working group should be made available by the Commission, but also other available material can be used if and when appropriate.

Main tasks

The working group will cover important aspects of the assessment methodologies presented by the Commission services or other suggestions related to the topic. Inter alia, this implies that the group will work on:

• Develop operational guidelines to evaluate progress with structural reforms. Based on the work carried out under its previous mandate, additional guidelines need to be developed on further relevant policy areas.

• Help ensure that the tools and methodologies developed in LIME are used to underpin discussions in the CRWG. The analytical tools for an economically sound assessment of progress with structural reforms developed during previous mandates need to be used operationally. LIME together with the CRWG and the Commission will discuss how to best use the tools in the next annual country-specific assessment and the thematic country reviews. In light of this application possible refinements in the framework may be considered.

• Help develop the MACMIC database. MACMIC needs to be completed and used for policy analysis. LIME could assist the Commission in accomplishing both tasks. Particular attention should be paid to extending MACMIC to help develop operational approaches to quantify the budgetary impact of structural reforms.

• Explore modelling issues in assessing structural reforms. The Network of modelling experts will continue its work in supporting LIME and facilitate the exchange of experiences in modelling structural reforms.

• Develop methodologies for sectoral analysis further. As a complement to the existing methodologies, it is important to have a better understanding of the functioning of the different economic sectors. The market monitoring exercise is an important starting point.

• Support the contribution of the EPC on the Lisbon strategy post-2010. Particular attention will be paid to the appropriate use of targets for the purpose of improved communication on structural reforms in the Lisbon. Similarly, it is important to analyse the role of evidence-based surveillance in strengthening incentives to undertake structural reforms and the appropriate choice and design of indicators from an economic perspective.

• Analyse progress with relevant reforms at EU level and their interaction with reforms at national level. It is necessary to explore the methodological issues involved in producing an overall framework for assessing progress towards overarching Lisbon goals that takes account of measures undertaken at both EU and national level. This could be based on a case study, for example in the field of R&D and innovation.

Participation

The members of the working group will comprise representatives from national authorities, 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 three experts from each Member State wishing to participate, based on the capability to contribute. Participation could be varied according to the topics being examined.

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. In particular, LIME should co-operate closely with the Country Review Working Group (CRWG) to ensure that the methodological framework can effectively underpin the overall evaluation process. Its work on growth accounting should be consistent with the work of the Output Gaps Working Group (OGWG). It should also ensure close collaboration with groups attached to other Council formations which are also working on methodological issues regarding the assessment of structural reform in the context of the Lisbon strategy. This includes the work on methodology underway in the Employment Committee (EMCO) and in the High-Level-Group (HLG) attached to the Competitiveness Council.

Milestones

It is envisaged that the LIME will submit to the EPC a contribution on the Lisbon strategy post-2010 by November 2009, in time to feed into an EPC contribution for the December European Council. A further progress report on LIME activities will be submitted to the EPC by June 2010. On the basis of the progress report, the EPC will review at this point how best to take forward any outstanding actions/further work. It was agreed that the LIME remains a time-limited Working Group.