Second, the funding should be distributed on the basis of a quality assessment rather than in proportion to a country’s entitlement to a “slice of the pie”. To strengthen such an assessment, the funds themselves should be linked to the packaging of reforms, reforms with short-term fiscal costs or the funding of flanking policies4.
Pension reforms would be a suitable example, since they can come with short-term fiscal costs5. Third, proper and powerful clawback mechanisms should be built in so that the funds could be recuperated if reforms are reversed. While the Commission mentions such a mechanism, the identification of reversals is left overly vague.