COMMISSION STAFF WORKING DOCUMENT 2022 Country Report – Slovakia Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Slovakia and delivering a Council opinion on the 2022 Stability Programme of Slovakia
Date: 2022-05-23
Institutions: European Commission, Secretariat-General
Subjects: Slovakia, economic policy, economic recovery, economic reform, energy policy, improvement of housing, public finance, renewable energy, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.5.2022  SWD(2022) 627 final  COMMISSION STAFF WORKING DOCUMENT 2022 Country Report – Slovakia Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of Slovakia and delivering a Council opinion on the 2022 Stability Programme of Slovakia {COM(2022) 627 final} - {SWD(2022) 640 final}  
 
 
Slovakia 
2022 Country Report 

Economic 
and 
Financial Affairs 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

A robust recovery has set in, but 
structural challenges remain 

After  fast  progress  in  catching  up  with 
the  EU 
in  many  areas,  Slovakia’s 
convergence slowed down in recent years, 
as the country faces long-term structural 
challenges. With the economy highly exposed 
to  manufacturing,  maintaining  productivity 
growth  in  the  face  of  the  green  and  digital 
transitions  requires  further  efforts,  and  a 
faster  shift 
to  a  more  diversified  and 
environmentally  sustainable  economy.  While 
inequality and poverty are relatively low, some 
weaknesses  in  social  and  regional  cohesion 
persist.  Macroeconomic  stability  faces  risks 
from  rising  household  indebtedness  in  the 
medium run, and from the effect of population 
ageing on public finances in the long run. 

Slovakia’s  economy  has  weathered  the 
COVID-19  pandemic 
relatively  well, 
although  the  recovery  has  been  slowing 
down,  and 
inflationary  pressures  are 
rising. After a sharp contraction in real GDP in 
2020,  economic  activity  bounced  back  in 
2021.  However,  the  recovery  slowed  down 
towards  the  end  of  the  year  due  to  a  new 
wave  of  COVID-19 
infections  and  global 
supply  bottlenecks,  which  adversely  affected 
Slovakia’s  industry-heavy  export  sector.  The 
Russian  invasion  of  Ukraine  is  expected  to 
cloud  the  economic  outlook  further  in  the 
coming  years,  lowering  projected  annual  GDP 
growth  to  2.3%  in  2022  and  3.6%  2023,  as 
increasing  energy  and  commodity  prices  raise 
production  costs  and  erode  the  purchasing 
power  of  households.  Nonetheless,  public 
investments  financed  by  the  Recovery  and 
Resilience Facility (RRF) and by the ESIF (1) are 
expected  to  benefit  economic  growth.  Fiscal 

support  measures  helped  mitigate  the  impact 
of  the  pandemic  on  the  labour  market,  with 
short-time work schemes containing the rise in 
(Graph  1.1).  However,  a 
unemployment 
tightening 
skill 
labour  market  due 
mismatches  and  labour  shortages  in  certain 
sectors could constrain production. Inflationary 
pressures  have  intensified  and  become  more 
broad-based 
recently,  driven  by  adverse 
rising 
developments 
supply 
production costs, which are set to push annual 
inflation  to  9.8%  this  year,  and  keep  price 
growth elevated in 2023 as well. (2)  

side 

and 

to 

Graph 1.1: Labour market indicators 

Source: Eurostat 

External vulnerabilities remain contained, 
but  dynamic  house  price  growth  requires 
continued  vigilance.  While  external  cost 
competitiveness  deteriorated  somewhat 
in 
recent  years,  export  performance  remained 
stable.  Despite  this,  the  recent  rise  in  import 
prices is set to weigh on the external balance 
in  the  coming  years,  but  as  the  inflow  of 
NextGenerationEU  funds  gathers  pace, 
it 
would contain the growth of external debt and 
the  associated  stability  risks.  However,  rising 
household debt might  pose  a  potential  risk to 
macroeconomic  and  financial  stability.  House 
prices have risen strongly over the past years 
(6.4%  in  2021),  with  benchmark  indicators 
suggesting  a  possible  overvaluation.  While 
banks  remain  sound  and  well-capitalized,  the 

(1)  2023 will be the last year of spending in the 2014-

(2)  See the Commission’s latest European Economic 

2020 programming period. 

Forecast (Spring 2022) and Annex 18. 

2 

56789101112132.3502.4002.4502.5002.5502.6002.6502.7002.7502.800% of the labour forcethousands personsEmploymentLabour forceUnemployment (rhs) 
                                                 
  
                                                 
 
the  banking  system 

increase in household indebtedness associated 
with this strong house price growth raised the 
exposure  of 
to  a 
potentially  overheating  housing market,  which 
regulatory 
therefore  warrants 
vigilance. (3)  In  addition,  the  availability  of 
affordable private, public and social housing in 
Slovakia  remains  very  low,  which puts  further 
pressure on house prices.  

continued 

the 

Poverty  and  social 
inequalities  are 
relatively  low,  but  certain  groups  remain 
disadvantaged,  and  regional  disparities 
persist.  Income 
is  among  the 
inequality 
lowest  in  the  EU,  due  to  a  low  dispersion  of 
pre-tax incomes rather than redistribution. The 
share  of  population  at  risk  of  poverty  is  also 
relatively 
low 
low.  However,  behind 
average  there  are  large  disparities.  Some 
regions (e.g. in Eastern Slovakia, see Annex 15) 
and  social  groups  (e.g.  marginalised  Roma 
communities) 
particularly 
remain 
disadvantaged, for example, because of lower 
employment rates. The unemployment rate of 
low-skilled  workers,  and  especially  of  low-
skilled  youth,  is  among  the  highest  in  the  EU. 
The  share  of  long-term  unemployment  also 
remains  high.  The  gender  employment  gap  is 
close  to  the  EU  average,  but  is  significantly 
for  women  of  childbearing  age, 
higher 
corresponding 
limited  use  and 
the 
availability  of  formal  childcare  under  the  age 
of  3.  This  hinders  equal  opportunities  in  the 
labour  market.  Gender  inequalities  in  pay 
remain high. Despite some challenges such as 
poor  childcare  enrolment,  Slovakia  performs 
relatively  well  on  many  dimensions  of  the 
Social  Scoreboard  supporting  the  European 
Pillar of Social Rights (see Annex 12).  

to 

Slovakia’s  progress  in catching up  to the 
EU has slowed down, with further growth 
opportunities lying in a more sustainable, 
higher-value-added  economy.  Slovak  GDP 
per  person  (at  constant  2015  purchasing 
power  parity)  has  stood  between  78%  and 
82%  of  the  EU  average  since  2015.  The 
country’s  export-driven  growth  model,  based 
on  low  labour  costs  in  industrial  production, 

(3)  The European Systemic Risk Board (ESRB) issued a new 
warning for Slovakia in 2022 about vulnerabilities in the 
residential real estate market and partially sufficient 
macroprudential policies (see Annex 16). 

3 

is 

system 

learning 

its  significant  car 
faces  challenges  as 
manufacturing  sector  is  heavily  exposed  to 
risks  posed  by  automation.  This  underscores 
the  need  to  speed  up  preparations  for  the 
transition.  Mismatches 
green  and  digital 
between  current  skillsets  of  the  labour  force 
and future labour market needs are high. The 
lifelong 
also 
underdeveloped,  hampering  human  capital 
accumulation.  Research  and  innovation  (R&I) 
spending  remains  relatively 
its 
governance  system  is  also  fragmented (see 
Annex  9).  Amid  high  energy  intensity,  the 
green  transition  lacks  sufficient  investment  in 
energy  efficiency,  renewable  energies,  and  a 
more  circular  economy.  Therefore,  raising 
long-term  productivity  growth  and  restarting 
convergence  requires  shifting  to  a  more 
diversified  and  environmentally  sustainable 
economy,  based  on  a  larger  share  of  high 
value-added  activities,  enabling  Slovakia  to 
remain  technologically  competitive 
in  the 
digital age. 

low,  and 

Slovakia  is  progressing  towards  the  UN 
Sustainable Development Goals (SDG) but 
still  lags  behind  in  some  areas.  Slovakia 
has  seen  progress  in  all  SDGs  related  to 
environmental  sustainability,  with  affordable 
and  clean  energy  (SDG  7)  improving  at  a 
slower  pace.  Moreover,  it  remains  well  below 
the EU average for responsible production and 
consumption  (SDG  12)  and  climate  action 
(SDG  13).  Performance  in  SDGs  on  fairness 
has  been  improving,  with  good  progress  in 
those on poverty, work and inequalities (SDGs 
1  and  8),  while  education,  health  and  gender 
balance (SDGs 3, 4 and 5)  are making slower 
progress  and  remain  below  the  EU  average. 
For  productivity  and  macroeconomic  stability 
(SDGs  4,  8,  9  and  16),  Slovakia  has  also 
progressed  well,  but  remains  below  the  EU 
average for most of them (see Annex 1).   

Public finances face sustainability 
challenges 

Fiscal  policy  provided  support  to  the 
economy  during  the  COVID-19  crisis, 
which is being phased out as the recovery 

 
                                                 
the 

limit 

takes hold. During the pandemic, the budget 
deficit widened from 1.3% in 2019 to 5.5% in 
2020  and  6.2%  in  2021  (see  Graph  1.2),  as 
fiscal  policy  was  mobilized  to  support  the 
socio-economic 
economy  and 
consequences  of  the  pandemic.  Budgetary 
revenues  weathered  the  crisis  relatively  well 
(remaining  stable  at  approximately  40%  of 
increased  from 
GDP),  while  expenditures 
40.7%  of  GDP  in  2019  to  46.8%  in  2021  on 
the  back  of  measures  to  support  selected 
sectors,  and  to  protect  employment  and 
household  incomes.  Consolidation  of  public 
finances is expected to start in 2022-2023, as 
COVID-19  support  measures  are  gradually 
withdrawn (depending  on the  evolution  of the 
time,  public 
pandemic).  At 
investment  (which  has  generally  been  lower 
than  in  other  Central  and  Eastern  European 
countries)  is  expected  to  rise  as  a  share  of 
GDP. Funding from RRF grants will support the 
increase 
investments  without 
compromising  the  consolidation  of  public 
finances.  

in  public 

same 

the 

Graph 1.2: Key fiscal indicators 

Source: European Commission 

Public debt is projected to stabilize in the 
coming  years.  During  the  pandemic,  the 
combination  of  sizeable  deficits  and  falling 
output  resulted  in  a  sharp  jump  of  the  public 
debt-to-GDP  ratio,  from  48.1%  prior  to  the 
crisis to 63.1% in 2021 (the change including 
also  an  adjustment  of  liquid  assets  of  about 
5%  of  GDP).  However,  declining  primary 
budget deficits, robust nominal GDP growth as 
well  as  a  persistently  low  interest  rates  are 
expected  to  contain  the  debt-to-GDP  ratio  in 
the coming years. 

Population ageing poses challenges to the 
long-term 
public 
sustainability 
finances.  Medium-term  and  long-term  fiscal 

of 

sustainability  challenges  are  substantial  for 
Slovakia (4). Ageing is the biggest challenge to 
long-term  fiscal  sustainability,  driven  mainly 
by pensions, and to a lesser degree by health 
care  and  long-term  care  costs.  According  to 
the  2021  Ageing  Report, 
the  old-age 
dependency ratio (the ratio of people over 65 
to people of working age, i.e. 20-64 years old) 
is  expected  to  almost  triple  from  2019  to 
2060  as  life  expectancy  is  increasing.  Given 
the  lack  of  a  link  between  population  ageing 
and the retirement age, as well as the level of 
pensions,  pension  expenses  are  estimated  to 
increase from 8.3% of GDP in 2019 to 13.4% 
in  2050,  one  of  the  highest  increases  in  the 
EU. Additional  mitigating measures could  help 
as 
reduce 
strengthening the labour market integration of 
women with young children and of vulnerable 
groups 
facilitating 
immigration.  Regarding  healthcare,  excessive 
reliance  on  hospitals  reflects  the  difficulty  of 
primary  care 
to  act  as  a  successful 
gatekeeper,  hindering  the  efficacy  of  the 
healthcare  system.  In  addition,  the  challenge 
of  providing  sustainable  and  adequate  long-
term  care  to  an  ageing  population  is  likely  to 
add to the pressure on public finances. 

such  as  Roma,  or 

burden, 

fiscal 

such 

the 

Economic and social consequences 
of the Russia’s invasion of Ukraine  

Slovakia’s  economy  is  highly  exposed  to 
the  effects  of  Russia’s 
invasion  of 
Ukraine,  which  clouds  the  near  term 
economic  outlook.    While  direct  exposure  to 
Russian and Ukrainian exports is relatively low, 
the  country  is  highly  exposed  to  a  possible 
disruption  of  Russian  energy  imports  and 
rising  import  costs,  which  would  adversely 
affect  the  supply  side  of the  economy.  Based 
on 2020 data, the dependence of Slovakia on 
Russian  fossil  energy  imports  is  one  of  the 
highest in the EU, particularly for crude oil and 
natural  gas.    In  addition  to  energy,  Slovak 
heavy  industry  also  depends  on  iron  imports 
from Russia, while shortages of cable harness 
and  neon  gas,  largely  imported  from  Ukraine, 

(4)  See Annex 19. 

4 

010203040506070-8-7-6-5-4-3-2-1020102011201220132014201520162017201820192020202120222023Government budget balanceGovernment budget balance (Forecast)Gross public debt (rhs)Forecast DataGross public debt (forecast) (rhs) 
  
                                                 
in  the 
are  expected  to  constrain  output 
automotive industry, also worsening the global 
semi-conductor  shortage,  which  has  already 
been  weighing  heavily  on  the  Slovak  car 
industry for the past year.  

The  supply-side  disruption  and  rising 
import  costs  caused  by  the  military 
aggression  are  expected  to  amplify 
inflationary  pressures  and  dampen 
economic growth. The sharp rise in imported 
energy  and  commodity  prices  leads  to  a 
deteriorating  terms-of-trade,  which  transfers 
purchasing power from Slovakia to the rest of 
the world. Slovakia is particularly vulnerable to 
this shock since, due to the relatively large role 
of  industry,  its  economy  is  among  the  most 
energy intensive in the EU. This aggravates the 
adverse  supply  side  effects  of  higher  energy 
costs,  constraining  production  and  increasing 
the  prices  of  a  broader  set  of  goods  and 
services.  In  addition,  the  share  of  energy 
expenditures in household consumption is one 
of  the  highest  in  the  EU,  magnifying  also  the 
direct  impact  of  higher  energy  prices  on 
inflation.  The 
the 
purchasing power of households is expected to 
lower consumption, while higher uncertainty is 
forecast 
investments. 
Manufacturing  exports  are  expected  to  suffer 
from  intensifying  supply  chain  disruptions, 
rising  production  costs,  and  weaker  growth  in 
trading  partners,  worsening  the  outlook  for 
near term GDP growth. 

resulting  erosion  of 

to  weigh 

on 

The  humanitarian  crisis  in  Ukraine  will 
create new social, health care and labour 
market  challenges  for  Slovakia.  As  of  9 
May  2022,  approximately  74  519  displaced 
persons  from  Ukraine  have  applied  for 
temporary shelter in Slovakia. Their integration 
will  require  significant  adaptations  in  the 
health  and  social  care  system,  as  well  as  in 
education. 
implemented 
measures under the EU’s Temporary Protection 
into 
Directive. 
an 
mainstream 
immediate  priority 
language 
courses  and  psychological  support  to  those 
fleeing Ukraine, as well as support to teachers. 
As  the  number  of  displaced  persons  from 
is  growing,  potential  challenges 
Ukraine 
the  kindergarten  and  school 
to 
related 

integration 
became 
it 
to  provide 

facilitate 
education, 

Slovakia 

has 

To 

capacities,  as  well  as  sufficient  educational 
staff  will  need  to  be  addressed.  Support  will 
also be needed to facilitate the labour market 
integration  of  people  fleeing  Ukraine,  which 
the 
would  benefit 
participation  of  adults  in  learning  in  Slovakia 
was  well  below  the  EU  average  (see  the 
Section  3)  the  up-  and  reskilling  schemes  will 
be needed also for the refugees. The influx of 
refugees put additional pressure on availability 
of social housing for vulnerable groups.   

supply.  As 

labour 

Additional  government  measures  might 
slow the pace of the fiscal consolidation, 
but  higher  inflation  could  provide  relief 
to public finances. Fiscal policy may need to 
to  a  weakening 
extend  further  support 
economy  in  order  to  mitigate  the  effects  of 
energy  price  increases  on  households  and 
businesses  (a  cap  on  wholesale  electricity 
prices  for  households  has  already  been 
agreed).  Additionally,  measures 
taken  by 
Slovakia to accommodate the arrival of people 
fleeing  Ukraine  could  also  put  additional 
pressure on efforts to keep public expenditures 
under control, constraining the pace of budget 
deficit  reduction.  On  the  other  hand,  higher 
nominal  GDP  growth  due  to  rising  inflation  is 
set  to  have  a  positive  impact  on  fiscal 
revenues, cushioning the budget balance. 

from 

exceptional 
Slovakia  will  benefit 
flexibilities provided in the framework of CARE 
Regulation  and  additional  pre-financing  under 
REACT-EU  to  urgently  address  reception  and 
integration needs for those fleeing Ukraine as 
a result of the Russian invasion.  

5 

 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

Slovakia‘s  recovery  and  resilience  plan 
(RRP)  puts  forward  investments  of  EUR 
6.3  billion  (about  6.7%  of  2019  GDP)  to 
address 
the  country’s  main  socio-
economic  and  environmental  challenges. 
In particular, the plan’s ambitious reforms and 
investment  will  contribute 
to  effectively 
addressing  a  significant  subset  of    structural 
challenges  identified  in  the  country-specific 
recommendations of 2019 and 2020. The plan  
focuses on policies for the next generation (in 
particular, 
public 
productivity-enhancing 
governance 
investment  in  the  green  and  digital  transition 
and smart growth. It also contributes to social 
and territorial cohesion supporting the goals of  
the European Pillar of Social Rights. Moreover, 
it 
fiscal 
sustainability,  notably  of  the  pension  system. 
This  makes  it  a  comprehensive  and  adequate 
response  to  the  challenges  Slovakia  is  facing 
(see Graph A2.1 in Annex 2).  

includes  measures 

inclusive 
and 

education), 

improve 

to 

One landmark initiative of the RRP is the 
educational  reform  package.  The  level  of 
basic  skills  of  Slovak  teenagers  is  below  the 
EU  average,  and  the  proportion  of 
low 
achievers  is  significantly  higher  than    the  EU 
average  (31%  vs  22.5%  in  reading,  29%  vs 
22.3%  in  science,  and  25%  vs  22.9%  in 
mathematics 
(PISA  2018).  By  expanding 
quality  early  childhood  education  and  care, 
launching  the  school  curricula  reform  and 
modernising  teacher  education,  the  reform 
package  is  geared  towards  improving  pupils’ 
including  digital  skills,  and 
basic  skills, 
developing 
like  critical 
transversal  skills 
thinking,  problem-solving,  or  working  in  a 
team.  Reforms  in  higher  education  aim  to 
improve its quality assurance, governance and 
financing 
to  be 
strengthened  at  all  levels  of  education.  The 
research,  development  and  innovation  (RDI) 
reform  will  strengthen  coordination  and  RDI 
performance.  

Inclusion 

systems. 

is 

6 

The  plan  proposes  a  comprehensive 
response  to  healthcare  challenges.   It 
envisages  measures  to  improve  the  health 
system’s  capacity  and  infrastructure,  as  well 
as  improved  provision  of  primary  care  in 
adopted 
underserved 
legislation  on  the  hospital  network  has  the 
potential  to improve the  quality  of  healthcare 
and cost-efficiency. Moreover, plan focuses on 
home-based  and  community-based  provision 
of the long-term and care services, reinforcing 
of  palliative  care  and  addressing  this  sector’s 
fragmented governance. 

Recently 

areas. 

Slovakia’s  plan  is  tackling  the  green 
transition  with  comprehensive  measures. 
They  are  targeted  at  renovating  buildings, 
modernising  railways,  decarbonising  industry, 
accelerating 
renewable 
deployment 
energies, and adapting to climate change. 

of 

The  plan  is  expected  to  accelerate  the 
digital transition across the economy and 
society. Slovakia is Investing in and reforming 
  digital  economy.  This  supports  e-
its 
government, digital skills education and digital 
innovation.  The  drive 
for  better  digital 
capabilities and services extends to education, 
healthcare, public administration and research 
(R&I).  Slovakia  will  also 
and 
participate 
four  multi-country  digital 
projects,  including  the  deployment  of  Digital 
Innovation Hubs and joining the European High 
Performance Computing project. 

innovation 

in 

to 

RRP 

brings 

changes 

significant 
Slovakia’s 
structural 
public 
administration  and  institutions.  Notably, 
reforms  of  the  justice  system  and  the  fight 
against  corruption  and  money  laundering  are 
set to have a lasting impact.  Work to digitalise 
a  wide  range  of 
institutions  and  public 
administration  has  the  potential  to  improve 
the efficiency and quality of public services. In 
addition,  the  reform  of  public  procurement 
investment 
should  significantly  speed  up 

 
 
 
procedures,  thanks  in  part  to  digitalisation. 
Well-functioning  public  procurement  is  crucial 
for  the  investments  planned  under  the  RRF 
and Cohesion Policy. 

Implementation of the RRP is progressing. 
Slovakia  has  taken  the  first  steps  to  reform 
key  areas.  These  include  merging  of  higher 
institutions,  publishing  of  an 
education 
investment plan for the Slovak railway system, 
the  adoption  of  a  broader  methodology  for 
carrying  out  projects 
to  support  cycling 
infrastructure),  as  well  as  the 
(primarily 
adoption of the concept of the Development of 
Intermodal  Transport  in  the  Slovak  Republic 
until  2030  or  the  national  park  reform  which 
sets  the  first  step  in  the  transition  to  the 
unified  management  of  state-owned  lands 
located in the national parks. 

Box 1: 

Key  deliverables    expected  under  the  Recovery  and  Resilience  Plan  in  2022-
2023 

  Reform of the education system to enhance its quality and inclusiveness. 

  Strengthening  the  governance  structure  at  the  universities  to  increase  their 

performance and RDI reform. 

  A new hospital network delivering better healthcare. 

  Support schemes improving energy efficiency of family houses 

  A pension system reform improving long-term fiscal sustainability 

  A streamlined judicial map to foster the quality and efficiency of the justice system 

7 

 
  
 
 
FURTHER PRIORITIES AHEAD 
FURTHER PRIORITIES AHEAD 

taxation, 

enhancing 

Beyond  the  challenges  addressed  by  the 
recovery and resilience plan (RRP), as outlined 
above,  Slovakia  faces  additional  challenges 
not  sufficiently  covered  in  the  plan.  Policy 
attention  and  further  progress  are  required  in 
public 
sustainable 
administration,  addressing  skills  mismatches, 
inclusion, 
rental  and  social  housing  and 
advancing 
and 
green 
strengthening  the  energy  sector.  Addressing 
these challenges will also help to make further 
progress in achieving SDG indicators related to 
decent  work  and  economic  growth,  peace, 
institutions,  quality 
justice  and 
education, reduced inequalities and affordable 
and clean energy.  

transition 

strong 

the 

and 

fiscal 

Slovakia’s  competitive  sustainability  can 
be  further  strengthened  beyond  the 
measures in the RRP. The tax system can be 
tailored  to  better  enhance  productivity  and 
growth,  fairness  and  social  inclusion,  and 
environmental 
sustainability. 
Strengthening skills by addressing mismatches 
and  investing  in  lifelong  learning  can  play  a 
part in closing the labour productivity gap with 
the  EU  and  reap  the  benefits  of  the  twin 
transition.  Investment  in  social  housing  and 
infrastructure  can  help  better  provide  for 
inclusion  of  disadvantaged  groups,  such  as 
marginalised  Roma  communities,  and  ensure 
more  inclusive  growth.  Improvements  to  the 
regulatory  environment  can  help  businesses 
and the government invest in and deliver more 
productivity  gains  in  the  future.  Closing  the 
gap  in  regional  disparities  would  stimulate 
long-term  sustainable  and  inclusive  growth 
boosting  the  economic  potential  of  Slovakia’s 
less-developed 
further 
steps  to  move  to  a  more  resource-efficient 
and  circular economy  can  help  Slovakia move 
forward  on 
to  environmental 
sustainability.  

regions.  Moreover, 

the  path 

Reforming the tax system to boost 
the twin transition and safeguard 
public finances 

system 

to 
and 

long-term 

tax 
improving 

can 
A  well-designed 
efficiency, 
contribute 
fiscal 
fairness, 
sustainability.  The  tax  burden  on  workers  is 
high,  particularly  for  low-income  earners.  This 
can discourage people from taking up work. By 
contrast,  environmental  and  property  taxes 
play a limited role in Slovakia. A shift towards 
green  and  property  taxation  that  carefully 
weighs  social  considerations  could  improve 
employment  and  growth  prospects  and  fiscal 
sustainability.  

Further  efforts  simplifying  taxes  and 
improving compliance can increase public 
revenues,  and  ensure  fairness.  Despite 
some  improvement,  the  VAT  compliance  gap 
remains  high  (16.1%  vs  10.4%  in  the  EU). 
Further 
improvement, 
including  electronic  invoicing,  pre-filled  tax 
returns  and  more  digitalisation,  could  help 
improve  revenue  by  reducing  leaks  in  the  tax 
system.  

tax  administration 

the 

Fiscal  policy  and  taxation  are  not  yet 
green 
supporting 
sufficiently 
transition.  Most  CO2  emissions  have  a  price 
that is too low given their environmental costs. 
Even  though  the  economy  has  an  energy 
intensity, environmental taxes were only 2.4% 
of GDP in 2020, close to the EU average. The 
indexation of environmental taxes and charges 
would  prevent  further  reductions  of  this 
revenue  over  time.  Road  taxes  and  vehicle 
registration  fees  could  better  reflect  emission 
intensity  by 
increasing  them  for polluting 
vehicles. Moreover, revised EU rules for taxing 
into 
energy  are  expected  to  better  take 
account  negative  environmental  effects  of 

8 

 
 
 
investments. Gaps in  the quality  of  the  public 
administration  also  have  an  impact  on  the 
effective  and  timely  implementation  of  EU 
Funds,  which  remains  a  key  challenge  (see 
Annex 11). 

public 

efficient 

More 
investment 
governance  could  help  unlock  Slovakia’s 
full  investment  potential.  A  reform  of  the 
construction  laws    could  address  the  lengthy 
construction  permit  process,  which 
is  a 
bottleneck  for  public 
investment  and  the 
housing  market.  Public  participation  and 
access  to  justice  need  to  be  ensured.    While 
Slovakia is implementing reforms to speed-up 
public  procurement  procedures,  the  use  of 
quality criteria remains limited. In 2020, about 
94%  of  contracts  in  Slovakia  were  awarded 
based  only  on  the  lowest  price.  This  is  well 
above  the  EU  average  of  64%  and  limits 
competition  based  on  quality.  It  also  reduces 
the  possibility  for  strategic  use  of  public 
support  other  policies, 
procurement 
to 
innovation. 
social  and 
including  green, 
Furthermore,  the  professional  services  sector 
remains highly regulated (see Annex 10). 

in 

regions  governed  by 

Strengthened regional administration and 
capacities  would  help  to  fully  address 
complex  challenges,  including  the  twin 
transition.  Implementation  pressure  on  the 
ground  to  ensure  strategic  policy  coordination 
and  synergies  among  different  investment 
interventions is enormous. At the same time, a 
new  structure  to  facilitate  the  cohesion  policy 
the 
investment 
Partnership  Council is not mature enough and 
requires  additional  administrative  support. 
Targeted regional initiatives funded by the EU 
funds  (e.g.  catching-up  regions)  contribute  to 
building up knowledge, but successful regional 
transformation  requires  skilled  human  capital 
and  strong  coordination  of  investments    (see 
Annex 3 for an overview of the EU instruments 
for  recovery  and  growth  in  Slovakia).  Some 
progress has been made in strengthening local 
high 
governance 
fragmentation 
services 
centres.  However,  the  overall  reform  of 
territorial  consolidation  for  municipalities  is 
still work in progress.   

addressing 
shared 

and 
through 

different  energy  sources  when  setting  taxes 
for them.  

for 

but 

formation, 

responsible 

Environmental  charges  relating  to  waste 
management  and  air  pollution  could 
better  promote  resource  efficiency.  Poor 
air  quality  is  harmful  for  health.  Nitrogen 
smog  and 
oxides  are 
the 
particulate  matter 
corresponding tax has not been adjusted since 
2008.  While  fees  increased  in  2019,  50%  of 
municipal waste was still disposed at landfills 
in 2020 compared to 23% in the EU). In 2022, 
Slovakia encouraged more people to recycle by 
introducing a deposit refund system for single-
use  drink  containers,  prevention  further  step 
for  the  circular  economy. Still,  the  use  of 
economic  incentives  and  disincentives  lacks 
coherence  and  is  not  always  in  line  with  the 
polluter pays and the user pays principles. 

despite 

taxation, 

Property 
being 
relatively  growth-friendly,  is  not  used  to 
its full potential. The revenue from recurrent 
property  taxes  is  relatively  low  (0.5%  of  GDP 
vs  1.2%  in  the  EU;  see  Annex  18)  Slovakia’s 
tax  system  favours  home  ownership  more 
than other EU countries. Updating the tax base 
to reflect market values can increase revenue 
without  increasing  tax  rates.  Without  proper 
indexation,  the  eroding  tax  base  could  also 
contribute  to driving  up  house  prices.  When 
reforming  property  taxes,  social  implications 
need to be considered carefully.  

Strengthening public 
administration and regulation to 
foster investment 

The  public  administration´s  ability  to 
invest and reform is a decisive factor for 
transforming the country. The low capacity 
of  the  public  administration  is  a  serious 
bottleneck  for  investments  and  reforms.  The 
lack  of  human 
resource  management, 
effective  governance,  and  coordination  across 
areas  such  as  administration,  justice,  services 
to  people  and  businesses  and  research  and 
innovation  often  result  in  delayed  or  only 
reforms  and 
partial 

implementation  of 

9 

 
Late  payments  and  poor  access  to 
finance  hamper  business  investment  in 
Slovakia.  Average  payment  times  by  public 
hospitals  exceed  400  days,  affecting  SMEs’ 
liquidity  and  investment  potential.  In  2020, 
late  payments  were  one  of  the  biggest 
problems for 40% of companies. Furthermore, 
45%  of  Slovak  businesses  declared  that 
payment delays were a risk to their survival in 
2021 (5). This was in addition to challenges in 
accessing  finance  with  loan  requests  rejected 
or  refused  for  around  26%  of  companies (6). 
is  also  underdeveloped,  
Equity  financing 
venture  capital  investment  is  only  0,02%  of 
GDP (7) (see Annex 10).   

Fostering a more inclusive society 

Poverty  and  social  exclusion  remain  a 
serious challenge in some regions and for 
marginalised  Roma  communities.  In  2020, 
the ‘at-risk-of poverty or social exclusion’ rate 
dropped from 14.9% to 13.8%, remaining well 
below  the  EU  average.  However,  almost  200 
000  Roma  people  continue  to  live  in  deprived 
and  excluded  conditions,  often  with  unmet 
basic  needs  for  adequate  housing  and  access 
to drinking water, electricity and heating (8). 

The  availability  of  rental  and  social 
housing  remains  a  key  challenge  for 
addressing  social  exclusion.  EU-SILC  data 
shows  that  the  share  of  households  living  in 
rental  flats  owned  by  the  public  sector    in 
Slovakia (1.6%) is significantly lower than the 
EU average (10.8%) (9). This constraints access 
of disadvantaged groups to the rental housing, 
as  well  as  the  ability  of  public  authorities  to 

(5)  Intrum, European payment Report 2021 

(6)  Survey on access to finance of enterprises (SAFE 

survey), 2021 

(7)  EIF Access to Finance Index – Equity, 2020 

(8)  Atlas of Roma Communities (2019), Office of the 
Slovak government Plenipotentiary for Roma 
communities, Bratislava  

(9)  Ondrušová, D., ‘Dôležité je nestratiť bývanie. Ako štát v 
súčasnej situácii môže pomôcť skupinám obyvateľstva 
najviac ohrozeným prepadom do pouličného 
bezdomovectva’. Analytický komentár IVPR 1/2020. 
Available here. 

for 

schemes. 

flagship  area 

The 
housing 
social 
develop 
government  programme 
for  2020-2024 
indicated  the  state  supported  rental  housing 
as  a 
reforms  and 
investments. So far, there are some measures 
deployed  under  the  European  Social  Fund  to 
support soft “Housing First” projects (10) based 
on  the private  rental market in  several  bigger 
increase 
cities. 
housing supply and develop the rental market 
and public housing may  contribute to address 
these constraints.  

Introducing  measures 

to 

for 

The government has not approved the national 
and 
strategy 
ending 
preventing 
homelessness  yet,  despite 
it  being  a 
continuing  problem.  Around  23000  are 
homeless  and  between  4%  and  8%  of  the 
population  are  at 
their 
homes (11). Tackling these challenges is crucial 
for  Slovakia  to  contribute  to  reaching  the 
2030 EU headline target on poverty reduction. 

risk  of 

losing 

Inequalities widened due to the COVID-19 
in  education.  A 
pandemic,  especially 
significant 
low-achieving 
of 
proportion 
students  are  from  a  disadvantaged  socio-
economic  background  (see  Annex  13).  In 
2020-2021, schools were closed for 38 weeks 
in  Slovakia  and  provided  distance  education 
instead.  Research  shows  that  10%  of  pupils 
were  not  or  very  poorly  involved  in  distance 
learning (12),  including  a  significantly  higher 
proportion  of  disadvantaged  students (13).  The 
RRP  contains  remedial  classes  for  12000 
school  pupils  in  2022  and  a  study  on  the 
impact of COVID-19 on primary and secondary 
school  pupils.  However,  further 
remedial 
measures  may  be  needed  to  mitigate  the 
long-term  negative  impact.  To  provide  quality 

(10)  This initiative is funded through the European Social 

Fund via the REACT-EU fund for recovery. It focuses on 
finding decent accommodation in the general rental 
market in Slovakia.   

(11)  Ondrušová, D., et al. "Ľudia bez domova: príprava a 
realizácia empirického výskumu, analýza nástrojov 
prevencie a riešenia bezdomovectva" (2015). 

(12)  Comenius Institute: Report from a representative survey 
on the course and impact of distance learning in the 
school year 2020/2021, available in Slovak here.  

(13)  Gardoňová, K. & Rybanská, V. ‘Obmedzená škola, 

obmedzená budúcnosť: Vplyv obmedzenia školskej 
dochádzky ako opatrenia proti šíreniu Covid-19 na 
populáciu slovenských detí‘. Urad Vlady SR (2021). 

10 

 
                                                 
                                                 
widening  since  2010  unlike  in  most  peer 
countries (see Graph 3.1.). Moreover, shrinking 
working-age  population  will 
the 
contribution  of  labour  utilisation  to  economic 
growth.  

reduce 

Graph 3.1: Evolution of labour productivity 
towards the EU average (GDP per hour 
worked in PPS,  EU27_2020=100) 

the 

to  attract  and 

learning/skills 
education  and  address 
losses  due  to  COVID-19,  it  is  necessary  to 
ensure  a  sufficient  supply  of  qualified 
teachers.  While  the  RRP  aims  to  improve  the 
quality  of  teacher  training  programmes,  the 
low  salaries  in  the  teaching  profession  cause 
shortages.  This  indicates  the  need    for  a  pay 
rise 
retain  high-skilled 
professionals. The share of early leavers from 
education  and  training  increased  in  2020, 
rising  to  7.6%  from    6.9%  in  2015.  Early 
school  leaving  is  particularly  common  among 
Roma (72% in 2018 for the 18-24 age group) 
due  in  part  to  limited  access  to  inclusive 
education  at  pre-primary,  primary  and 
secondary level (14).  

Developing skills through lifelong 
learning to boost productivity 

Source: Eurostat 

on 

growth. 

Skills mismatches and skills shortages in 
Slovakia are high and this has a harmful 
effect 
The 
economic 
employment  gap  between  high-  and  low-
skilled people is the highest in the EU, with the 
latter  suffering  the  highest  unemployment 
rate in the EU (42.9% in Q3-2021).  Moreover, 
Slovakia  suffers  from  a  low  level  of  the 
graduates  in  science,  technology,  engineering 
and  mathematics  who  achieve  better  labour 
market  outcomes  than  people  who  choose 
more general education fields. Cedefop’s Skills 
Panorama  suggests  that  Slovakia  is  likely 
experiencing  shortages  both  across  high-
skilled  and  medium-skilled  jobs.  Teachers, 
healthcare  and  IT  professionals  are  among 
high shortage occupations. Likewise, the green 
transition put pressure on further development 
green skills to fill out the green jobs.  

in  adult 

Addressing skills mismatches and further 
investing 
learning  will  be 
essential  to  increase productivity  growth 
and improving living standards. The labour 
productivity gap with the EU average has been 

(14)  Kahanec, Martin, et al. "The social and employment 

situation of Roma communities in Slovakia." European 
Parliament, https://www. europarl. europa. 
eu/RegData/etudes/STUD/2020/648778/IPOL_STU 
(2020) 648778_E N. pdf (2020). 

11 

in 

years, 

recent 

Despite 

learning  system 

is 
Slovakia’s  adult 
some 
underdeveloped. 
improvements 
the 
participation of adults aged 25-64 in formal or 
non-formal  education  and  training  over  the 
last  four  weeks  decreased  in  2020  and  is 
currently  the  fourth    lowest  in  the  EU (15). 
While  the  RRP  has  ambitions  in  education,  it 
does  not  tackle  the  main  adult  learning 
priorities.  The  Ministry  of  Education  presented 
a  draft  strategy  on  lifelong  learning  by  2030 
that announces reforms, such as a pilot for the 
individual learning accounts and strengthening 
basic  skills.  Tackling  these  challenges  is  key 
for  Slovakia  to  contribute  to  reaching  the 
2030 EU headline target on skills. 

Digital  skills  are  improving  slowly,  but 
persisting  gaps 
in  both  basic  and 
specialist  skills  are  a  barrier  for  the 
digital  transition  and  call  for  further 
action.  Slovakia  has  a  mixed  performance  in 

(15)  The indicator on adult learning participation over the 

previous four weeks is used in the country report, rather 
than the indicator on learning over the previous 12 
months, as Adult Education Survey (AES) data for the 
12-month indicator are only available for 2016 at the 
moment, while the new Labour Force Survey (LFS) 
indicator agreed for use in the social scoreboard and as 
2030 headline target on skills will only be available in 
2023 

5060708010111213141516171819202020=100CzechiaEstoniaLatviaHungaryPolandSlovakia 
                                                 
  
                                                 
the  DESI  human  capital  dimension,  with 
improvement in digital skills needed across the 
population. The country is somewhat below the 
EU  average  for  basic  and  expert  digital  skills, 
with substantial gaps to meet the 2030 Digital 
Decade targets (see Annex 8). A lack of digital 
skills  will  complicate  job  transitions  in  the 
ongoing  industrial  transformation  and  hinder 
people  from  benefiting  from  the digitalisation 
of  public  services.  The  RRP  substantially 
addresses  digital  skills 
in  education  and 
proposes  a  concrete  measure  for  older  and 
disadvantaged  people.  However,  the  national 
digital  skills  strategy  for  the  adult  population 
included  in the  RRP is  only  a  starting point  to 
address  the  issue  for  all  adults.  Measures  in 
the  strategy  could  be  aimed  at  a  wider 
audience ranging from ICT experts to the most 
vulnerable 
the  main 
bottlenecks  and  barriers  to  participation  in 
adult  learning,  and  adopt  a  specific  approach 
targeting small and medium-sized companies.   

address 

people, 

Advancing the green transition and 
enhancing resource efficiency 

The process to decouple economic growth 
from  negative  environmental  effects 
remains  a  major  challenge  for  Slovakia, 
partly  due  to  industry´s  significant  role 
in  the  economy (16).  The  country´s  energy 
intensity  was  70%  above  the  EU  average  in 
2020. Compared to 2000, the greenhouse gas 
intensity  of  Slovakia´s  energy  consumption 
has  decreased  only  by  17% (17).  Industrial 
production  and  use  of  fossil  fuels  are  the 
source  of  41%  of  all  emissions  produced  and 
industrial  emissions  remains  the 
reducing 
significant  challenge 
in  decarbonising  the 
Slovak  economy.  Since  2015,  the  progress  in 
reducing  net  greenhouse  gas  emissions  has 
stalled,  and  in  2020,  net  emissions  increased 
compared to 2019 (Annex 5). 

(16)  Making the Slovak republic more resource efficient 

economy (minzp.sk) 

increased 

The  Slovak  National  Energy  and  Climate 
Plan (NECP) (18) will require an update, in 
view  of  the  EU’s 
increased  climate 
ambitions for 2030 and the developments 
related  to  the  invasion  of  Ukraine.  The 
NECP 
emission 
reductions  target  for  sectors  outside  the  EU 
Emissions  Trading  System  to  20%  by  2030 
(compared  to  2005).  However,  the  measures 
to be taken now need to be described in detail, 
also  in  context  of  the  EU´s  recent  increased 
ambitions  to  reduce  emissions  by  55%  by 
2030. 

Slovakia´s 

Slovakia´s  energy-intensive  economy 
remains  highly  dependent  on  fossil 
imports.  The  share  of  natural  gas  in  the 
Slovak  energy  mix  was  24.9%  in  2020  (0.5 
percentage  point  higher  as  compared  to  the 
EU  average),  with  85%  of  supplies  imported 
from  Russia (19).  Over  90%  of  the  population 
has access to natural gas networks. The share 
of  nuclear  in  the  Slovak  energy  mix  stood  at 
24.6% in 2020 (compared to 13.1% in the EU). 
The  nuclear  fuel  and  crude  oil  are  supplied 
from  Russia  (at  the  rate  of  100%,  in  2020), 
while 
are  more 
diversified (20). The industry and heating sector 
make  up  a  significant  part  of  natural  gas 
consumption  in  Slovakia.  Large  consumers 
accounted  for  54.9%,  small  and  mid-size 
industries  for  16.6%  and  households  for 
28.4% of domestic natural gas consumption in 
2020 (21).  

imports 

hard 

coal 

is  making 

in 
Slovakia 
diversifying  energy  supplies  through  new 
cross-border  interconnectors.  A  new  gas 
pipeline  between  Slovakia  and  Poland (22)  is 

progress 

(18)  The Commission´s asessment of Slovakia National 

Energy and Climate Plan; 2020; page 7 

(19)  Eurostat (2020), share of Russian imports over total       
imports of natural gas. Total imports include intra-EU 
trade. 

(20)  Eurostat (2020), share of Russian imports over total  

imports of crude oil and hard coal. Total imports include 
intra-EU trade. Crude oil does not include refined oil 
products. 

(21)  The Annual Report 2020, the Office for Regulation of 
Network Industries of the Slovak Republic (URSO). 

(22)  The connection between Vel'ke Kapušany (Slovakia) –

(17)  EU Energy in figures 2020. Pages 122 and 125.  

Strachocina (Poland) 

12 

 
                                                 
                                                 
import  capacity 

expected to start operations in mid-2022. The 
gas 
from  Czechia  was 
strengthened  in  2019,  while  the  Adria  oil 
pipeline which connects Slovakia with Hungary, 
allows for imports from Adriatic Sea terminals 
and  provides  an  alternative  to  the  Druzhba 
pipeline  from  Russia.  Slovakia’s  electricity 
interconnection  capacity  stood  at  40.2%  of 
installed  capacity  in  2021,  well  above  the  EU 
objectives for 2020 and 2030 (10% and 15%, 
respectively). A significant improvement to the 
Slovak-Hungarian  electricity 
interconnection 
was  delivered  as  part  of  the  RRP  reform  in 
2021.  

for 

final 

fuel 

renewables 

is 
A 
faster  uptake  of 
Slovakia´s 
reduce 
to 
essential 
dependence  on 
imports. 
fossil 
Slovakia surpassed its 14% renewable energy 
target for 2020 by a large margin (17.3%), to 
a  large  extent  due  to  more  precise  statistical 
coverage  (reflecting  an  increase  in  biomass 
use  in  households´  heating) (23).  The  2020 
NECP  introduced  a  2030  renewable  target  of 
19.2% 
energy 
Slovakia’s 
consumption,  which  is  below  the  24%  level 
that results from formula of the Regulation on 
the  Energy  Union. 
the  Governance  of 
Slovakia´s  renewables  uptake,  in  line  with 
relevant  sustainability  criteria,  may  cover  a 
broad  range  of  technologies,  such  as  solar, 
wind,  geothermal,  sustainable  bio-methane 
technologies  and  heat  pumps.  There  is  also  a 
significant  potential  to  replace  natural  gas 
imports  by  domestic  sustainable  bio-methane 
production (24).  The  Slovak  authorities  are 
working  on  an  action  plan  that  will  aid 
investments  in  a  hydrogen  value  chain  and 
introduce 
regulatory 
framework. 

appropriate 

an 

Additional  reforms  would  help  fill  the 
investment  gap. 
significant  renewable 
legislative 
Following 

important 

recent 

initiatives, (25)  reforms  in  the  area  of  market 
design  and  support  to  renewables  are  in  the 
legislative pipeline for spring 2022, as part of 
the  RRP.  Further  reforms need  to  address  the 
outstanding  challenges in grid  connection  and 
network  fees  (the  G-charge),  access  to  land, 
digitalisation and streamlining of authorisation 
proceedings in a one-stop-shop. Efforts to roll-
the  energy  communities  and  build 
out 
capacities  at  regional  level  are  also  needed. 
The  development  of  regional  decarbonisation 
plans  could  be  facilitated  by  the  creation  of 
regional  sustainable  energy  centres.  The 
ample  public  funding  of  renewables  could  be 
further leveraged through deployment of more 
private resources. 

to 

volume 

increase 

investments 

the 
The 
flexibility  of 
the  Slovak  electricity 
network  would  help  to  accommodate  the 
intermittent 
of 
increasing 
renewables.  The  Slovak 
recovery  and 
resilience plan includes investments increasing 
the network balancing capacity (by at least 68 
MW).  A  higher  flexibility  at  the  level  of 
transmission  and  distribution  grids  would 
allow for increasing renewable capacity, in line 
with  the  NECP  update.  The  “stop-state”  for 
connection  of  renewables  to  the  grid  was 
terminated in April 2021 and a framework for 
reservation  of  new  electricity  generation 
capacity has  been  established.  A  forward-
looking  mechanism  providing  transparent  and 
predictable 
information  on  capacities  for 
connection  of  new  intermittent  renewables  to 
the grid still needs to be implemented. 

from 

suffers 

Slovakia 
insufficient 
incentives  for  deep  renovation  to  make 
public and private buildings more energy-
efficient and greener. Seizing the remaining 
energy  savings  potential  requires  accelerating 
towards  deep 
rate,  shift 
the 
renovation  of  buildings  to  be  combined  with 

renovation 

(23)  The support of biomass needs to comply with the “Do 
No Significant Harm” principle and ensure sustainable 
sourcing of biomass, in order to avoid negative impacts 
on carbon sinks and biodversity. 

(24)  A part of biogas stations currently operating in Slovakia 
is suitable for a repowering upgrade to bio-methane 
production. In early 2022, the first bio-methane station 
started operations in Slovakia 

(25)  As from 2022, the Slovak energy regulator (URSO) 

lowered both price for connecting of new sources of 
electricity and for access to distribution by electricity 
producers (so called G-component) by 50%. As from 
April 2022, new legislation delivered significant 
reduction of barriers for connection of local energy 
renewable sources. In particular, it raised the limits for 
renewables generation up to maximum reserved 
capacity and allowed for an increased excess electricity 
supply to the grid.   

13 

 
                                                 
                                                 
has  one  of  the  highest  rates  of  municipal 
landfilling  in  the  EU,  despite  a  decrease  from 
66% in 2016 to 50% in 2020 (the EU average 
in  2020  was  23%).  A  significant  number  of 
irregular  landfills  and  longstanding  burdens 
from  industrial  facilities  create  serious  risks 
for  health  and  the  environment,  including 
underground water sources. Recycling rates in 
Slovakia  have  climbed  sharply  over  the  past 
years (to 42% in 2020, compared to 47% for 
the EU-27 in 2020), although improvements in 
2014-2017  could  partly  be  due  to  changes 
how this was measured. 

can 

deliver 

in  Slovakia 

Slovakia  needs  more 
investments  to 
support  the  climate  and  biodiversity 
goals,  although  the  RRP  includes  a  reform  of 
nature  protection  parks  (targeting  also  the 
protected  areas  and  wetlands).  Restoration  of 
natural  ecosystems,  improvements  to  water 
retention  of  the  land  and  sustainable  forest 
management 
significant 
environmental  and  socio-economic  benefits. 
continuously 
Biodiversity 
worsening especially for birds, amphibians and 
reptiles,  agricultural  and  forest  habitats  in 
Natura  2000  sites,  and  aquatic  and  wetlands 
ecosystems (27).  The  government  has  not  yet 
adopted  a  detailed  circular  economy  strategy, 
although  work 
is  ongoing  on  a  circular 
economy roadmap (while further development 
is also hampered by data limitations). In 2022, 
the deposit-refund system for single-use drink 
containers  began.  The  availability  of  circular 
technologies  would  also  help  to  greening  of 
the sizeable industry sector.  

is 

for 

residential  buildings 

the  increased  use  of  renewable  heat  sources. 
renovation  schemes  are 
While  suitable 
available 
(67% 
renovated  multi-apartment  buildings,  49% 
houses) (26), 
single-family 
renovated 
renovation  of  public  and  private,  non-
residential  buildings  remains  untapped.  The 
RRP allocates around EUR 2billion (around 2% 
of  GDP)  to  this  effort  in  2021-2026,  but  the 
investment gap remains substantial. Achieving 
the  renovation  targets  will  require    tapping 
into  more  private  funding,  particularly  for 
public buildings, adjusting renovation schemes, 
through 
financing  approaches, 
improving the energy monitoring and planning 
as  well  as  promoting  dedicated  measures  to 
address  energy  poverty.    A  series  of  barriers 
such as lack of skilled workers and capacities, 
including  implementation  challenges  linked  to 
funding  programmes  further  prevent  market 
actors  from  realising  the  energy  savings 
potential. Promoting energy  efficient solutions 
and cleaner fuels and technologies would also 
contribute  to  improving  air  quality,  given  that 
domestic  solid  fuel  combustion  is  the  main 
source of particulate matter emissions.  

innovative 

and 

into 

The  uptake  of  green  modes  of  transport 
could  lower  greenhouse  gas  emissions 
and  demand  for  oil.  In  2021,  electric 
vehicles  still  represented  only  1.5%  of  new 
registrations  in  Slovakia  compared  to  9%  in 
the  EU,  partly  due  to  lower  income  levels  of 
the  Slovak  population.  The  investments  in 
Slovakia 
refuelling 
charging 
infrastructure  need  to  speed  up.  The  Slovak 
Automotive 
that 
between  21,000  to  27,000  by  2030  electric 
charging stations are needed in the country by 
2030. The RRP will contribute by investing into 
around  3,000  public  charging  stations  for 
alternative 
2026.  
Investments  in  Slovakia  (including  in  the  RRP) 
are  carried  out  to  enable  a  shift  from 
individual  automobile 
to  more 
environmentally  friendly  modes  of  transport 
such as rail, public transport or cycling. 

Association 

estimates 

transport 

vehicles 

fuels 

by 

As  regards  resource  efficiency,  more 
sustained  efforts  could  help 
lower 
municipal  landfill  rates.  Currently,  Slovakia 

(26)  SK Long-term Renovation Strategy 

(27)  Commission recommendations for Slovakia’s CAP 

strategic plan SWD(2020) 392 final 
EUR-Lex - 52020SC0392 - EN - EUR-Lex (europa.eu) 

14 

 
                                                 
 
 
                                                 
KEY FINDINGS 
KEY FINDINGS 

Slovakia’s  Recovery  and  Resilience  Plan 
includes measures to address a series of 
its  structural                                challenges 
through: 

  Improving the availability of early childhood 
education  and  care  and 
the  quality, 
inclusiveness  and  digitalisation  of  school 
education,  improving  governance,  quality 
and  relevance  of  higher  education  and 
curbing  segregation  of  Roma  pupils  in 
education. 

in 

renovating 

  Investment 
buildings, 
modernising 
decarbonising 
railways, 
industry  and  deploying  renewable  energy 
sources. 

  Digitalising  the  public  and  private  sector, 
and  reforming  research  and  innovation 
governance and funding.  

  Reforms  improving  the  efficiency  of  public 
administration and the effectiveness of the 
line  with  European 
justice  system 
standards, and fighting against corruption. 

in 

  Increasing efforts to promote inclusion of 
Roma marginalised communities and other 
disadvantaged 
by 
groups, 
improving  the  availability  of  rental  and 
social housing. 

including 

  Strengthening  the  capacity  of the public 
administration,  particularly  at  regional 
investment 
improving  public 
level,  and 
governance.  

an 

fossil 

energy 

sources, 

fuel 
accelerated 

  Reducing 
dependence 
of 
rollout 
through 
renewable 
including 
through  facilitation  of  grid  access  and 
measures  to  streamline  permitting  and 
administrative  procedures,  and  reducing 
reliance  on  natural  gas 
through 
increased  energy  savings  in  the  industry 
and  residential  heating  sectors,  with  the 
latter  focusing  on  deep  renovations  and 
renewable heat sources. 

  Improving 

the 

cost-
effectiveness  of  the  healthcare  system 
modernising the hospital network. 

resilience 

and 

Beyond  the  reforms  and  investments  in 
the RRP, Slovakia would benefit from: 

  Reforming 

the 

taxation  system 

to 
stimulate  the  circular  economy  and  green 
transition,  further  enhance  fairness,  and 
safeguard  the  long-term  sustainability  of 
public finances. 

  Boosting  competitiveness  and  labour 
productivity 
skills 
mismatches  and  improving  adult  learning, 
including digital skills.  

addressing 

by 

15 

 
 
 
ANNEXES 

 
 
 
LIST OF ANNEXES 

Cross-cutting progress indicators 

Annex 1: Sustainable Development Goals 

Annex 2: Recovery and Resilience Plan -implementation 

Annex 3: Other EU instruments for recovery and growth 

Annex 4: Progress in the implementation of country-specific recommendations 

Environmental sustainability 

Annex 5: Green Deal 

Annex 6: Employment and social impact of the green transition 

Productivity 

Annex 7: Resource efficiency and productivity 

Annex 8: Digital transition 

Annex 9: Innovation 

Annex 10: Industry and single market 

Annex 11: Public administration 

Fairness 

Annex 12: Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

Annex 13: Education and skills 

Annex 14: Health and health systems 

Annex 15: Economic and social performance at regional level 

Macroeconomic stability 

Annex 16: Key financial sector developments 

Annex 17: Taxation 

Annex 18: Key economic and financial indicators 

Annex 19: Debt sustainability analysis 

LIST OF TABLES 

Table A2.1: 
Table A4.1: 
Table A5.1: 
Table A7.1: 
Table A8.1: 
Table A9.1: 
Table A10.1: 

Key elements of the Slovak RRP 
Summary table on 2019, 2020 and 2021 CSRs 
Indicators underpinning the progress on EU Green Deal from macroeconomic perspective 
Selected resource efficiency indicators 
Key Digital Economy and Society Index Indicators 
Key research, development and innovation indicators 
Key Single Market and Industry Indicators 

19 

21 

21 

23 

24 

27 

30 

30 

33 

35 

35 

37 

39 

41 

43 

46 

46 

48 

51 

53 

55 

55 

57 

59 

60 

23 
28 
32 
36 
38 
40 
42 

 
 
 
Table A11.1: 
Table A12.1: 
Table A13.1: 
Table A14.1: 
Table A15.1: 
Table A16.1: 
Table A17.1: 
Table A18.1: 
Table A19.1: 
Table A19.2: 

Public administration indicators – Slovakia 
Social Scoreboard for Slovakia 
EU-level targets and other contextual indicators under the European Education Area strategic framework 
Key health indicators 
Slovakia, selected indicators at regional level 
Financial soundness indicators in Slovakia 
Indicators on taxation 
Key economic and financial indicators 
Debt sustainability analysis for Slovakia 
Heat map of fiscal sustainability risks for Slovakia 

LIST OF GRAPHS 

Graph A1.1: 

Progress towards SDGs in Slovakia in the last five years (1) 

Graph A2.1: 

Share of RFF funds contributing to each policy pillar 

Graph A3.1: 

ESIF 2014-2020 Total budget by fund (EUR billion, %) 

Graph A3.2: 

Cohesion policy contribution to the SDGs (EUR billion) 

Graph A4.1: 

Slovakia's progress on the 2019-2020 CSRs (2022 European Semester cycle) 

Graph A5.1: 

Fiscal aspects of the green transition Taxation and government expenditure on environmental protection 

Graph A5.2: 

Thematic – Energy Share in energy mix (solids, oil, gas, nuclear, renewables) 

Graph A5.3: 

Thematic – Biodiversity  Terrestrial protected areas and organic farming 

Graph A5.4: 

Thematic – Mobility  Share of zero emission vehicles (% of new registrations) 

Graph A6.1: 

Fair green transition challenges 

Graph A6.2: 

Energy poverty by income decile 

Graph A7.1: 

Economic importance and expansion of the circular economy 

Graph A11.1: 

Open data maturity 

Graph A11.2: 

Performance on the single market public procurement indicator 

Graph A13.1: 

Isolation index of disadvantaged students, PISA 2018 

Graph A14.1: 

Life expectancy at birth, years 

Graph A14.2: 

Projected increase in public expenditure on health care in 2019-2070 (reference scenario) 

Graph A15.1: 

Territories most affected by the climate transition in Slovakia 

Graph A15.2: 

Unemployment rate (2020) in Slovakia 

Graph A17.1: 

Indicators on tax wedge 

45 
46 
49 
52 
53 
56 
57 
59 
60 
62 

22 

23 

24 

25 

27 

30 

30 

31 

31 

34 

34 

35 

43 

43 

50 

51 

51 

54 

54 

58 

20 

 
 
 
 
CROSS-CUTTING PROGRESS INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

This  Annex  assesses  Slovakia’s  progress  on 
the  Sustainable  Development  Goals  (SDGs) 
along  the  four  dimensions  of  competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change,  while 
ensuring that no one is left behind. The EU and its 
Member  States  are  committed  to  this  historic 
global  framework  agreement  and  to  playing  an 
active  role  in  maximising  progress  on  the  SDGs. 
The graph below is based on the EU SDG indicator 
set  developed  to  monitor  progress  on  SDGs  in  an 
EU context. 

Slovakia  performs  very  well  or  is  improving 
on 
indicators  related  to  environmental 
sustainability (SDG 2, 6, 7, 9, 11, 13 and 15). 
Slovakia further improved in  sustainable mobility 
(public  transport  share  increased  to  26.2%,  well 
above the EU average of 17.2%) and has reduced 
severe  housing  deprivation  (at  3.2%  compared  to 
the  EU  rate  of  4.2%).  Notably,  Slovakia  has 
potential  to  reap  the  economic  benefits  of 
innovation  and  clean  energy  (SDG  7,  9). 
In 
particular, although the share of renewable energy 
has increased from 12.9% to 17.3% and Slovakia 
exceeded  its  2020  target  (in  large  part  due  to 
revised  statistical  assumptions),  it  remains  below 
the EU average of 22.1%. Energy productivity has 
improved only marginally, resulting in an increased 
gap compared to the EU average (from 4.8 to 5.0 
the  average  EU 
EUR/kgoe, 
improvement  of  7.8  to  8.6  EUR/kgoe).  Measures 
included  in  the  recovery  and  resilience  plan’s 
components 
industry 
decarbonisation,  energy  efficiency  and  R&D  will 
help 
improve  performance  on 
environmental SDGs. 

renewables, 

compared 

further 

on 

to 

to 

Slovakia is performing very well on one SDG 
related to  fairness  (SDG  1)  and  is  improving 
on most of the others (SDG 2, 3, 4, 5 and 8) 
although  at  an  uneven  pace.  Slovakia 
outperforms  the  EU  average  in  one  indicator  on 
poverty  and  inequality  (SDGs  1),  which  can  be 
attributed  to  low  wage  dispersion  rather  than  the 
social welfare system. Slovakia improved on some 
quality  education 
like 
‘participation in early childhood education’ (72.2 % 
in 2015, 78.1 % in 2020) although Slovakia is still 
lagging  behind  the  EU  average  in  this  area.  The 

(SDG  4), 

indicators 

indicators for early leaving from education and the 
adult  learning  participation  deteriorated,  which 
pose  important  challenges  for  the  productivity 
growth.  The  RRP  includes  measures  to  improve 
pupils’ skills and ensure inclusiveness at all levels 
of  education,  notably  by  expanding  pre-school 
education,  reforming  school  curricula,    teacher 
education  and  professional  requirements,  and 
curbing  the  segregation  of  Roma  communities. 
(Component 6, 7, 8). 

the  EU  average  of  1.4%. 

Slovakia  is  improving  on  SDG  indicators 
related  to  productivity  (SDG  4,  8,  9).  R&D 
spending in Slovakia has been stagnating recently. 
At  0.9%  of  GDP  in  2020,  it  remains  markedly 
below  the  EU  average  of  2.3%,  which  does  not 
bode  well  for  innovation  and  technology-driven 
productivity 
increases.  The  share  of  R&D 
personnel,  has  been  increasing  and  reached  0.8% 
of  the  active  population  in  2020,  but  remains 
below 
  Tertiary 
educational  attainment,  a  crucial  element  of 
improving  the  quality  of  human  capital  and 
transitioning  to  a  knowledge  based  society,  has 
been steadily increasing and, at 39.5% of the 25-
34-aged population in 2021, has almost caught up 
with the EU average of 41.2%. However, the share 
of adults participating in learning remains very low 
at 4.8%, which is below the EU average of 10.8% 
in  2021.  The  share  of  households  with  at  least 
100 Mbps internet connection has been increasing 
to  26%  in  66.7%  in  2021  (below the  EU  average 
of 70.2%), while 55% of adults had at least basic 
digital  skills  in  2021,  slightly  above  the  EU 
digital 
average 
infrastructure and educational  reforms outlined in 
the  RRP  are  expected  to  boost  these  sources  of 
long-term productivity further. 

Investment 

of  54%. 

in 

Slovakia  is  improving  on  SDG  indicators 
related  to  macroeconomic  stability  (8,  16). 
in  Slovakia  has  been 
Real  GDP  per  capita 
increasing,  reaching  15,660  €  in  2020  in  real 
terms  (up  from  14,550  € in  2016). However,  it is 
still substantially below the EU average (27,810 € 
in 2021), with convergence slowing down (even at 
comparable  purchasing  power  standards).  The 
investment  share  of  GDP  declined  markedly  from 
23.8%  in  2015  to  19.6%  in  2020,  which  is  now 
also  below  the  EU  average  of  22.3%.  With  the 
exception  of  the  period  during  the  pandemic,  the 
employment  rate  has  been  increasing  steadily, 
reaching  74.6%  of  the  population  aged  20-64 

21 

 
 
 
 
Graph A1.1: Progress towards SDGs in Slovakia in the last five years (1) 

For detailed datasets on the various SDGs see the annual ESTAT report ‘Sustainable development in the European Union’, 
https://ec.europa.eu/eurostat/web/products-statistical-books/-/KS-03-21-096; Extensive country specific data on the short-term 
progress of Member States can be found here: Key findings - Sustainable development indicators - Eurostat (europa.eu) 
Source:  Eurostat, latest update of 28 April 2022. Data mainly refer to 2015-2020 and 2016-2021.Eurostat 

of 

The 

73.1%. 

average 

years in 2021, and staying consistently above the 
EU 
long-term 
unemployment  rate  has  increased  somewhat  (to 
3.9% in 2021) and remains above the EU average 
of  2.8%.  Public  investments  and  the  reforms 
outlined in the Slovak RRP could help address low 
investment  rates  and  further  reduce  the  share  of 
long-term unemployment. 

22 

 
 
 
 
 
 
 
ANNEX 2: RECOVERY AND RESILIENCE PLAN -IMPLEMENTATION 
ANNEX 2: RECOVERY AND RESILIENCE PLAN -IMPLEMENTATION 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the  centrepiece  of  the  EU’s  efforts  to 
support  its  recovery  from  the  COVID-19 
pandemic,  fast  forward  the  twin  transition 
and  strengthen  resilience  against  future 
shocks.  Slovakia  submitted 
its  recovery  and 
resilience  plan  (RRP)  on  29  April  2021.  The 
Commission’s  positive  assessment  on  16  June 
2021  and  Council’s  approval  on  13  July  2021 
paved  the  way  for  disbursing  EUR  6.3  billion  in 
grants under the RRF in 2021-2026. The financing 
agreement  and  operational  arrangements  were 
signed on 7 October 2021 and 16 December 2021 
respectively.  The  key  elements  of  the  Slovakian 
RRP are set out in Table A2.1. 

The  share  of  funds  contributing  to  each  of  the 
RRF’s  six  policy  pillars  is  outlined  in  the  graph 
below.  

Table A2.1: Key elements of the Slovak RRP 

(1) See Pfeiffer P., Varga J. and in ’t Veld J. (2021), 
“Quantifying Spillovers of NGEU investment”, European 
Economy Discussion Papers, No. 144 and Afman et al. (2021), 
“An overview of the economics of the Recovery and Resilience 
Facility”, Quarterly Report on the Euro Area (QREA), Vol. 20, 
No. 3 pp. 7-16.   
Source: European Commission 2022 

by  Slovakia 

progress  made 

in 
The 
implementing  its  plan  is  published  in  the 
Recovery  and  Resilience  Scoreboard.  The  pre-
financing  payment  of  EUR  823  million  was  made 
on  23  October  2021  and  Slovakia  has  submitted 
its  first  payment  request of  EUR  458.3  million  on 
29  April  2022.  The  Scoreboard  also  gives  an 
overview  of  the  progress  made  in  implementing 
the RRF. 

Graph A2.1: Share of RFF funds contributing to each policy pillar 

Source: European Commission 2022. As each measure contributes towards two policy areas of the six pillars: primary (dark blue) 
and secondary assignments (bright blue), the total contribution to all pillars displayed in this graph amounts to 200% of the RRF 
funds allocated to the Member State 

23 

Total allocation EUR 6.3 billion in grants (6.7% of 2019 GDP)Investments and Reforms 58 investments and 58 reforms Total number of Milestones and Targets196Estimated macroeconomic impact (1) Raise GDP by 2.1% by 2026 (0.6% in spillover effects)Pre-financing disbursed EUR 823 million (October 2021)First instalment Slovakia submitted its first payment request in April 20220%10%20%30%40%50%60%Green transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic, socialand institutionalresiliencePolicies for thenext generation 
 
 
  
 
 
 
  
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The EU’s budget of more than EUR 1.2 trillion 
for  2021-2027  is  the  investment  lever  to 
help  implement  EU  priorities.  Underpinned  by 
an  additional  amount  of  about  EUR  800  billion 
largest 
through  NextGenerationEU  and 
instrument, the Recovery and Resilience Facility, it 
represents  significant  firepower  to  support  the 
recovery and sustainable growth. 

its 

Graph A3.1: ESIF 2014-2020 Total budget by fund 
(EUR billion, %) 

support 

In  2021-2027,  EU  cohesion  policy  funds (28) 
will 
development 
long-term 
objectives in Slovakia by investing EUR 13.31 
billion (29).  This  includes  EUR  459.0  million  from 
the  Just  Transition  Fund  directed  to  alleviate  the 
socio-economic  impact  of  the  green  transition  in 
the  most  vulnerable  regions.  The  2021-2027 
cohesion policy funds partnership agreements and 
programmes are designed taking into account the 
2019-2020  country  specific  recommendations 
(CSRs)  and  investment  guidance  provided  as  part 
of the European Semester, ensuring synergies and 
complementarities  with  other  EU  funding. 
In 
addition, Slovakia will benefit from EUR 3.4 billion 
support for the 2023-27 period from the Common 
Agricultural 
social, 
environmental,  and  economic  sustainability  and 
innovation 
rural  areas, 
contributing  to  the  European  Green  Deal,  and 
ensuring long-term food security. 

in  agriculture  and 

Policy,  which 

supports 

(1) EUR billion in current prices, % of total  
The data for the EAFRD and REACT-EU refer to the period 
2014-2022 
Source: European Commission, Cohesion Open Data 

In  2014-2020,  the  European  Structural  and 
Investment Funds (ESIF) allocated invest EUR 
16.47  billion (30)  from  the  EU  budget  to 
Slovakia.  The  total  investment,  including 
national  financing,  amounts  to  EUR  20.77 
billion  (see  Graph  3.1).  This  represents 
around  3.40%  of  GDP  for  2014-2020  and 
investment (31).  By  31 
70.72%  of  public 
December 2021, 96% of the total was allocated to 
specific projects, and 52% was reported as spent, 
leaving EUR 10.05 billion to be spent by the end of 
2023 (32).  Among  the  eleven  objectives  the  most 
relevant  ones  for  cohesion  policy  funding  in 
Slovakia  are  network  infrastructure  in  transport 
and energy, environmental protection and resource 
efficiency,  competitiveness of small and medium-
sized  companies 
research  and 
innovation (in total EUR 11.3 billion). By the end of 
2020,  cohesion  policy  investments  supported  12 
025  companies,  renovated  schools  for  91  773 
pupils,  improved  waste-water  treatment  for  37 

(SMEs)  and 

(30)  ESIF includes cohesion policy funds (ERDF, ESF+, CF, Interreg) 
and European Agricultural Fund for Rural Development 
(EAFRD) and European Maritime and Fisheries Fund (EMFF). 
According to the ‘N+3 rule’, the funds committed for the 
years 2014-2020 must be spent by 2023 at latest (by 2025 
for EAFRD). Data source: Cohesion Open data, cut-off date 
31.12.2021 for ERDF, ESF+, CF, Interreg; cut-off date 
31.12.2020 for EAFRD and EMFF. 

(28)  European Regional Development Fund (ERDF), European 

(31)  Public investment is gross fixed capital formation plus 

Social Fund+ (ESF+), Cohesion Fund (CF), Just Transition Fund 
(JTF), Interreg. 

(29) Current prices, source: Cohesion Open Data  

capital transfers, general government. 

(32)  Including REACT-EU. ESIF data on 

https://cohesiondata.ec.europa.eu/countries/SK 

24 

4,78713562823%3,07491577615%0,0127812580%9,31685112945%3,39418536816%0,187471321%CFEAFRDEMFFERDFESFYEI 
 
                                                 
  
                                                 
 
280  more  people  and  constructed  62  km  and 
renovated  267  km  of  roads.  By  the  end  of  2021, 
European  Social  Fund  (ESF)  investments  provided 
different forms of support reaching approximately 
893 000 projects’ participants. 

Graph A3.2: Cohesion policy contribution to the 
SDGs (EUR billion) 

are 

funds 

policy 

Cohesion 
already 
substantially contributing to the Sustainable 
In  Slovakia, 
Development  Goals 
cohesion policy funds are supporting 11 of the 17 
SDGs  with  up  to  90%  of  the  expenditure 
contributing to reaching the goals.  

(SDGs). 

REACT-EU 

instrument 

The 
(Recovery 
Assistance  for  Cohesion  and  the  Territories 
of Europe) under NextGenerationEU provided 
EUR  616  million  of  additional  funding  to 
2014-2020  cohesion  policy  allocations  for 
Slovakia  to  ensure  a  balanced  recovery,  foster 
convergence  and  provide  vital  support  to  regions 
following  the  coronavirus  outbreak.  REACT-EU 
support  in  Slovakia  contributed  to  the  short-time 
work  schemes,  strengthened  education,  training 
energy 
and 
efficiency  and  green  infrastructure  and  reduced 
material deprivation with direct food delivery. 

development, 

promoted 

skills 

Investment 
The  Coronavirus  Response 
Initiative (33) provided the first EU emergency 
support  to  Slovakia  for  the  COVID-19 
pandemic.  It  introduced  extraordinary  flexibility 
enabling  Slovakia  to  reallocate  resources  for 
immediate  public  health  needs  (EUR  25  million) 
and  support  for  companies  (EUR  355 million).  For 
instance,  Slovakia  shifted  resources  to  purchase 
protective  equipment,  vaccines  and  healthcare 
supplies,  strengthen  primary  healthcare,  provide 
working  capital  for  SMEs,  and  help  digitalise  the 
education  system  and  the  public  administration. 
Slovakia also benefited from the temporary 100% 
EU 
incurred 
measures,  with  approximately  EUR  521  million  in 
2021 through 100% co-financing. 

  cohesion  policy 

financing  of 

(33)  Re-allocating ESIF resources according to Regulation (EU) 

2020/460 of the European Parliament and of the Council of 
30 March 2020, and Regulation (EU) 2020/558 of the 
European Parliament and of the Council of 23 April 2020. 

25 

Source: European Commission 

received 

support  under 

the 
Slovakia 
European  instrument  for  temporary  support 
to  mitigate  unemployment  risks 
in  an 
emergency  (SURE)  to  finance  short-time 
work  schemes. The  Council  granted  financial 
assistance  under  SURE  to  Slovakia  in  September 
2020  for  a  maximum  of  EUR  630  million,  which 
was  disbursed  by  16  March  2021.  SURE  is 
estimated  to  have  supported  approximately  30% 
of  workers  and  25%  of  firms  for  at  least  one 
month  in  2020  and  10%  of  workers  and  15%  of 
firms 
in  manufacturing, 
wholesale  and  retail  trade,  and  accommodation 
and  food  services.  Slovakia  is  estimated  to  have 
saved  a  total  of  EUR  8  million  on  interest 
payments  as  a    result  of  SURE’s  lower  interest 
rates. 

in  2021,  primarily 

via 

the 

Technical 

The  Commission  is  provides  tailored-made 
Support 
expertise 
Instrument  to  help  Slovakia  design  and 
implement growth-enhancing reforms and its 
recovery and resilience plan (RRP). Since 2016, 
Slovakia  has  received  assistance  through  57 
technical  support  projects.  Projects  delivered  in 
2021 aimed, for example, to help Slovakia prepare 
the RRP, prepare and implement its territorial just 
transition plan and develop a strategy for the use 
of  artificial 
in  healthcare.  The 
Commission  also  assisted  Slovakia  in  designing 
the  overall  RRP  communication  strategy  and 
and 
implementing 
investments in the RRP, for instance, for improving 
the quality and attractiveness of higher education. 
In 2022, new projects will start to support, among 

intelligence 

reforms 

specific 

RRP 

0,290,480,550,650,680,730,790,851,273,156,16048SDG 11 Sustainable cities…SDG 15 Life on landSDG 13 Climate actionSDG 12 Responsible…SDG 3 Good health and well…SDG 1 No povertySDG 4 Quality educationSDG 6 Clean water and…SDG 7 Affordable and clean…SDG 8 Decent work and…SDG 9 Industry, innovation,… 
                                                 
   
others, building renovations set out in a number of 
RRP components.  

include 

  from  other  EU 
Slovakia  also  benefits 
programmes.  These 
the  Connecting 
Europe  Facility,  which allocated  EUR 559.2 million 
in  funding  to  specific  projects  on  strategic 
transport  networks,  and  Horizon  2020,  which 
allocated EUR 138.8 million in funding. 

26 

 
 
 
 
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 
RECOMMENDATIONS 

recommendations 

the  2019-2021 
The  Commission  assessed 
(CSRs) (34) 
country-specific 
addressed  to  Slovakia  in  the  context  of  the 
European  Semester.  The  assessment  takes  into 
account  the  policy  action  taken  by  Slovakia  to 
date (35),  as  well  as  the  commitments  in  the 
Recovery  and  Resilience  Plan  (RRP) (36).  At  this 
early  stage  of  the  RRP  implementation,  overall 
39%  of  the  CSRs  focusing  on  structural  issues  in 
2019  and  2020  have  recorded  at  least  “some 
progress”, while 61% recorded “limited” (see Graph 
in 
A4.1).  Considerable  additional  progress 
addressing structural CSRs is expected in the years 
to  come  with  the  further  implementation  of  the 
RRP.  

Graph A4.1: Slovakia's progress on the 2019-2020 
CSRs (2022 European Semester cycle) 

Source: European Commission 

(34)  2021 CSRs: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A32021H0729%2822%29&qi
d=1627675454457  
2020 CSRs: https://eur-
lex.europa.eu/search.html?textScope0=ti&lang=en&scope=E
URLEX&qid=1526385017799&type=quick&AU_CODED=CO
NSIL&DD_YEAR=2020&andText0=recommendation&DD_M
ONTH=07  
2019 CSRs:  https://eur-
lex.europa.eu/search.html?textScope0=ti&lang=en&scope=E
URLEX&qid=1526385017799&type=quick&AU_CODED=CO
NSIL&DD_YEAR=2019&andText0=recommendation&DD_M
ONTH=07  

(35)  Incl. policy action reported in the National Reform 

Programme, as well as in the RRF reporting (bi-annual 
reporting on the progress with implementation of milestones 
and targets and resulting from the payment request 
assessment). 

(36)  Member States were asked to effectively address all or a 

significant subset of the relevant country-specific 
recommendations issued by the Council in 2019 and 2020 in 
their RRPs. The CSR assessment presented here takes into 
account the degree of implementation of the measures 
included in the RRP and of those done outside of the RRP at 
the time of assessment.  Measures foreseen in the annex of 
the adopted Council Implementing Decision on the approval 
of the assessment of the RRP which are not yet adopted nor 
implemented but considered as credibly announced, in line 
with the CSR assessment methodology, warrant “limited 
progress”. Once implemented, these measures can lead to 
“some/substantial progress” or “full implementation”, 
depending on their relevance. 

27 

Limited Progress61%Some Progress36%Substantial Progress3% 
 
                                                 
 
  
 
 
Table A4.1: Summary table on 2019, 2020 and 2021 CSRs 

(Continued on the next page) 

28 

SlovakiaAssessment in May 2022*RRP coverage of CSRs until 20262019 CSR1Limited ProgressAchieve the medium-term budgetary objective in 2020.Not relevant anymoreNot applicableSafeguard the long-term sustainability of public finances, notably that of the healthcare and pension systems.Limited ProgressRelevant RRP measures planned as of 2021, 2022, 2023 and 2025.2019 CSR 2Limited ProgressImprove the quality and inclusiveness of education at all levels and foster skills.Limited ProgressRelevant RRP measures planned as of 2021, 2022, 2023. Enhance access to affordable and quality childcare and long-term care.Limited ProgressRelevant RRP measures planned as of  2022, 2023, 2024Promote integration of disadvantaged groups, in particular Roma.Limited ProgressRelevant RRP measures planned as of  2022, 2023, 20242019 CSR 3Limited ProgressFocus investment-related economic policy on healthcare,Limited ProgressRelevant RRP measures planned as of  2022, 2023, 2024, 2025research and innovation,Limited ProgressRelevant RRP measures planned as of  2021, 2022, 2023transport, notably on its sustainability,Limited ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2025 and 2026.digital infrastructure,Limited ProgressRelevant RRP measures planned as of 2021, 2022, 2023. energy efficiency,Some ProgressRelevant RRP measures planned as of 2022, 2024 and 2026.competitiveness of small and medium-sized enterprises,Some ProgressRelevant RRP measures planned as of 2023, 2024 and 2025.and social housing, taking into account regional disparities.Limited ProgressIncrease the use of quality-related and lifecycle cost criteria in public procurement operations.Limited ProgressRelevant RRP measures planned as of 2022 and 2023.2019 CSR4Some ProgressContinue to improve the effectiveness of the justice system, focussing on strengthening its independence, including on judicial appointments.Some ProgressRelevant RRP measures planned as of 2021, 2023 and 2024.Increaseeffortstodetectandprosecutecorruption,inparticularinlarge-scale corruption cases.Limited ProgressRelevant RRP measures planned as of 2021, 2022 and 2023.2020 CSR1Some ProgressInlinewiththegeneralescapeclause,takeallnecessarymeasurestoeffectivelyaddressthepandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuringdebtsustainability,whileenhancinginvestment. Not relevant anymoreNot applicableStrengthentheresilienceofthehealthsystemintheareasofhealthworkforce, critical medical products and infrastructure.Limited ProgressRelevant RRP measures planned as of 2022, 2023,2024 and 2025. Improveprimarycareprovisionandcoordinationbetweentypesofcare.Some ProgressRelevant RRP measures planned as of 2022, 2023,2024 and 2025. 2020 CSR2Some ProgressProvide adequate income replacement, Substantial Progressand ensure access to social protection and essential services for all. Limited ProgressStrengthen digital skills. Limited ProgressRelevant RRP measures planned as of 2022, 2023 and 2024.Ensure equal access to quality education.Limited ProgressRelevant RRP measures planned as of 2021, 2022, 2023 and 2024.2020 CSR 3Some ProgressEffectively implement measures to ensure liquidity for small and medium-sized enterprises and self-employed. Some ProgressClose digital infrastructure gaps. Limited ProgressRelevant RRP measures planned as of 2021, 2023 and 2024.Front-load mature public investment projects Some ProgressRelevant RRP measures planned as of 2022, 2023 and 2026.and promote private investment to foster the economic recovery. Some ProgressRelevant RRP measures planned as of 2022, 2024 and 2026.Focusinvestmentonthegreenanddigitaltransition,inparticularonclean and efficient production and use of energy and resources, Limited ProgressRelevant RRP measures planned as of 2022, 2024 and 2026.sustainable public transport, Limited ProgressRelevant RRP measures planned as of 2021, 2022, 2023, 2025 and 2026.and waste management. Some ProgressRelevant RRP measures planned as of 2022.2020 CSR 4Some ProgressEnsureeffectivesupervisionandenforcementoftheanti-moneylaundering framework. Some ProgressRelevant RRP measures planned as of 2021, 2022 and 2023.Ensure a favourable business environment Some ProgressRelevant RRP measures planned as of 2023, 2024 and 2025.andqualitypublicservicesthroughenhancedcoordinationandpolicy-making. Limited ProgressRelevant RRP measures planned as of 2022, 2023, 2024 and 2026.Address the integrity concerns in the justice system.Some ProgressRelevant RRP measures planned as of 2021, 2023 and 2024.2021 CSR1Some ProgressIn2022,maintainasupportivefiscalstance,includingtheimpulseprovidedbytheRecoveryandResilienceFacility,andpreservenationally financed investment. Substantial ProgressNot applicableWheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Substantial ProgressNot applicableAtthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticular investment supporting the green and digital transition. Substantial ProgressNot applicableGiveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Limited ProgressNot applicable 
 
 
 
   
 
Table (continued) 

 * See footnote 36  
Source: European Commission 

29 

 
 
   
 
ENVIRONMENTAL SUSTAINABILITY 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 5: GREEN DEAL 
ANNEX 5: GREEN DEAL 

intends 

The  European  Green  Deal 
to 
transform the  EU  into a  fair and prosperous 
society,  with  a  modern,  resource-efficient 
and competitive economy where there are no 
net  emissions  of  greenhouse  gases  in  2050 
and  where  economic  growth  is  decoupled 
from resource use. This annex offers a snapshot 
of  the  most  significant  and  economically  relevant 
developments in Slovakia in the respective building 
blocks  of 
is 
complemented by Annex 6 on the employment and 
social impact of the green transition and Annex 7 
for circular economy aspects of the Green Deal.  

the  European  Green  Deal. 

It 

Slovakia  has  a  long  way  to  go  in  its 
transition  to  a low-carbon  economy.  Between 
1990  and  2019,  economy  wide  greenhouse  gas 
(GHG)  emissions  decreased  by  43%,  which  was  a 
marked  fall  even  in  the  regional  context  of  the 
transition to a market economy. At the same time, 
the  greenhouse  gas  intensity  of  the  economy 
remains  significantly  higher  than  the  EU  average. 
GHG  emissions  in  non-Emissions  Trading  System 
sectors  are  currently  projected  to  increase,  which 
makes  meeting    the  national  target  of  a  23% 
reduction  by  2030  particularly  difficult.  Slovakia’s 
projections  in  the  National  Energy  and  Climate 
Plan  indicate  a  further  decrease  of  net  removals 
from the land use and forestry sink by 2030. In its 
Recovery  and  Resilience  Plan  (RRP),  Slovakia 
allocates  43%  of  spending  to  climate  objectives 
and  outlines  crucial  reforms  and  investments  to 
support the transition to a more sustainable, low-
carbon and climate-resilient economy. 

taxes 

Slovakia  is  performing  close  to  the  EU 
average  in  collecting  environmental  taxes 
and  government  spending  in  environmental 
protection but could face climate adaptation 
challenges.  Despite  the  high  energy  intensity  of 
the  economy,  environmental  taxes  stood  at  2.4% 
of  GDP  in  2020,  close  to  the  EU  average,  with 
energy 
largely  driving  environmental 
taxation,  and  a  smaller  extent  being  attributed  to 
transport  and  pollution  taxes.  At  the  same  time, 
government  expenditure  share  on  environmental 
protection  is  higher  than 
in  the  EU  overall. 
Slovakia’s estimated climate protection gap today 
places  it  into  an  overall  low-to-medium  risk 
category from the point of view of insured losses. 
However,  it  is  in  a  medium–to-high  risk  category 
for  floods  and  wildfires,  with  low  to  very  low 
insurance  coverage  for  these  hazards  that  are 

either  already  significant  (floods)  or  becoming 
more significant (wildfires). For more indicators on 
taxation, see Annex 18. 

Graph A5.1: Fiscal aspects of the green transition 
Taxation and government expenditure on 
environmental protection 

Source: Eurostat 

Graph A5.2: Thematic – Energy 
Share in energy mix (solids, oil, gas, nuclear, 
renewables) 

The energy mix is based on gross inland consumption, and 
excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste 
Source: Eurostat. Share of renewables include waste 

Slovakia  largely  relies  on  fossil  fuels,  with 
the share of natural gas in the energy mix in 
2020 being 24.9% and crude oil being 21.9%. 
Nuclear  had  a  share  of  24.65%  and  the  share  of 
coal and lignite stood at 14%. Finally,  renewables 
and  biofuels  have  reached  14.5%,  including  8% 
for  primary  solid  biofuels  and  1%  for  non-
renewable  waste.The  Commission  estimates  that 
Slovakia's  renewable  energy  contribution  to  the 
EU’s 2030 target of  19.2% by 2030 will need to 
be reviewed upwards to be in line  with the ‘Fit for 
55’ objectives. 

In the building sector, insufficient awareness about 
energy  renovation,  the  low  quality  of  the  current 
building  energy  performance  certificates  and  a 
lack  of  advisory  services  are  all  barriers  to 
improvement. 

30 

0.01.02.03.04.05.06.07.08.0Environmental taxes (%of GDP)Environmental taxes (%of total taxation)Government expenditureon environmentalprotection (% of totalexpenditure)SK (2020)EU27 (2020)0102030405060708090100200520102015201820192020Solid fossil fuels, peat and oil shaleOilGasNuclearRenewables 
 
 
   
 
   
 
 
comply  with 

not 
commitments for ammonia from 2030 on. 

the  emission 

reduction 

in  newly 

In  terms  of  mobility,  the  share  of  zero-
emission  vehicles 
registered 
passenger  cars  in  Slovakia  is  only  1.5% 
(compared to EU average of 9%), which is in 
large part  due to the higher price of electric 
cars and lower household income levels. While 
this  share  is  one  of  the  lowest  in  the  EU,  the 
country  is  showing  a  very  positive  trend  with 
higher  growth  than  the  EU  average  (despite  no 
incentive  programme  in  place).  Slovakia  also  is 
experiencing  increases  in  the  emissions  of  the 
transport sector.   

Graph A5.4: Thematic – Mobility  
Share of zero emission vehicles (% of new 
registrations) 

Source: European Alternative Fuels Observatory. Zero 
emission vehicles (passenger cars) include battery and fuel 
cell electric vehicles (BEV, FCEV). 

protection  areas 

In  terms  of  biodiversity,  by  2021,  37.4%  of 
Slovakia  was  covered  by  protected  areas, 
which  is  significantly  above  the  EU  average 
(25.7%).  Special 
(SPAs) 
classified under the Birds directive covered 26.7% 
(EU  average  12.8%)  and  sites  of  Community 
importance  (SCIs)  designated  under  the  Habitats 
Directive  covered  12.5%  (EU  average  14.2%)  of 
is  experiencing 
the  Slovak  territory.  Slovakia 
specific  problems  with  the  sustainable  forest 
management 
in  the  protected  areas.  Slovak 
forests in Natura 2000 sites are facing high levels 
forest 
in 
of  sanitary 
disturbances,  such  as  bark  beetle  infestation    or 
storm  damage.  Nonetheless,  since  2020  and 
based  on  the  amended  legislation,  only  close-to-
nature  forestry  is  possible  within  national  parks 
(97 % of national  parks area overlap with Natura 
2000 sites), while zoning of national park will lead 
to  no-intervention  regime  at  50  % 
(where 
appropriate) of their territories. In 2022 the reform 
of national  parks also established administrations 
of  9  national  parks,  providing 
them  with 
management  rights  over  the  forest  land.  With  an 
estimated  11.,7%  of  the  area  under  organic 
farming,  Slovakia  is  marginally  above  the  EU 
average of 9,1%. 

reaction 

logging 

to 

Graph A5.3: Thematic – Biodiversity  
Terrestrial protected areas and organic farming 

For terrestrial protected areas data for 2018, and data for the 
EU average (2016, 2017) is lacking 
Source: EEA (terrestrial protected areas) and Eurostat 

On  air  quality,  the  situation  in  Slovakia 
continues  to  be  of  great  concern.  Fine 
particulate  matter  has  led  to  significantly  more 
years  of  life  lost  than  the  EU  average  in  2019. 
However, pollution from nitrous oxide has a limited 
impact  on  health  compared  to  the  EU  average. 
Slovakia  expects  to  reach  emission  reduction 
commitments  for  all  air  pollutants  under  the 
Directive  in  2020-2029  and  for  most  pollutants 
from 2030 onwards. However, these projections do 

31 

0102030402016201720192020Terrestrial protected areas (% total area)Area under organic farming (% total utilised agricultural area)EU27 (terrestrial)EU27 (organic)0.02.04.06.08.010.0201620172018201920202021% of new registrationsSKEU27 
   
  
 
Table A5.1: Indicators underpinning the progress on EU Green Deal from macroeconomic perspective 

32 

TargetTarget2005201920202030WEMWAM2030WEMWAMNon-ETS GHG emission reduction target (1)MTCO2 eq; %; pp (2)23.1-13%-15%-12%-24-15-23%-34-26200520162017201820192020Share of energy from renewable sources in gross final consumption of energy (1)%6%12%11%12%17%17%19%Energy efficiency: primary energy consumption (1)Mtoe17.415.416.115.816.015.215.7Energy efficiency: final energy consumption (1)Mtoe11.610.411.111.111.210.410.3201520162017201820192020201820192020Environmental taxes (% of GDP)% of GDP2.52.52.52.52.42.42.42.42.2Environmental taxes (% of total taxation)% of taxation (3)7.77.67.57.27.06.86.05.95.6Government expenditure on environmental protection% of total exp.2.031.731.981.971.972.011.661.701.61Investment in environmental protection% of GDP (4) 0.820.360.400.37--0.420.380.41Fossil fuel subsidiesEUR2020bn0.380.450.450.440.43-56.8755.70-Climate protection gap (5)score 1-4Net GHG emissions1990 = 100555658585551797669GHG emissions intensity of the economykg/EUR'100.530.520.520.500.460.450.320.310.30Energy intensity of the economykgoe/EUR'100.210.210.210.200.200.200.120.110.11Final energy consumption (FEC)2015=100100.0103.4110.6110.4111.0103.0103.5102.994.6FEC in residential building sector2015=100100.0102.1106.1103.5133.0138.1101.9101.3101.3FEC in services building sector2015=100100.0100.7109.8101.294.085.3102.4100.194.4Smog-precursor emission intensity (to GDP) (4)tonne/EUR'10 (6)1.511.141.121.020.89-0.990.93-Years of life lost caused due to air pollution by PM2.5per 100.000 inh.1105101711981179934-863762-Years of life lost due to air pollution by NO2per 100.000 inh.51510102-12099-Nitrate in ground watermg NO3/litre12.814.213.314.412.6-21.720.7-Terrestrial protected areas% of total-36.437.4-37.437.4-25.725.7Marine protected areas% of total-------10.7-Organic farming% of total utilised agricultural area9.59.89.99.910.311.78.08.59.100-0606-1212-18Net land takeper 10,000 km213.011.05.0201520162017201820192020201820192020GHG emissions intensity of transport (to GVA) (7)kg/EUR'100.850.940.870.820.780.790.890.870.83Share of zero emission vehicles (8)% in new registrations0.20.10.20.30.21.21.01.95.43123348812Share of electrified railways%43.843.843.843.843.7-55.656.0-22.823.323.323.423.8-28.928.8-YearSKEUShare of smart meters in total metering points (9) - electricity% of total20185.135.8Share of smart meters in total metering points (9) - gas% of total20180.013.1ICT used for environmental sustainability (10)%202176.165.9Progress to policy targetsNational contribution to 2030 EU targetSLOVAKIAEU'Fit for 55'DistanceDistanceDigitalFiscal and financialindicators2.4 out of 4 (increase from historical level of 1.3). This is a low/medium risk category (4 being a high risk).ClimateEnergyPollutionBiodiversity2000-20062006-20122012-20186.313.87.2MobilityNumber of plug-in electric vehicles per charging pointCongestion (average number of hours spent in road congestion per year by a representative commuting driver) 
 
 
 
  
(1) The 2030 non-ETS GHG target is based on the Effort Sharing Regulation. The FF55 targets are based on the COM proposal to 
increase EU's climate ambition by 2030. Renewables and Energy Efficiency targets and national contributions under the 
Governance Regulation (Regulation (EU) 2018/1999). 
(2)  Distance to target is the gap between Member States’ 2030 target under the Effort Sharing Regulation and projected 
emissions, with existing measures (WEM) and with additional measures (WAM) respectively, as a percentage of 2005 base year 
emissions.  
(3) Percentage of total revenues from taxes and social contributions (excluding imputed social contributions). Revenues from the 
ETS are included in environmental tax revenues (in 2017 they amounted to 1.5% of total environmental tax revenues at the EU 
level).  
(4) Covers expenditure on gross fixed capital formation to be used for the production of environmental protection services (i.e. 
abatement and prevention of pollution) covering all sectors, i.e. government, industry and specialised providers. 
(5) The climate protection gap indicator is part of the European adaptation strategy (February 2021), and is defined as the share 
of non-insured economic losses caused by climate-related disasters.  
(6) Sulphur oxides (SO2 equivalent), Ammonia, Particulates < 10µm, Nitrogen oxides in total economy (divided by GDP). 
(7) Transportation and storage (NACE Section H).  
(8) Zero emission vehicles include battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV).  
(9) European Commission Report (2019) 'Benchmarking smart metering deployment in the EU-28'.  
(10) European Commission (2021). Each year the DESI is re-calculated for all countries for previous years to reflect any possible 
change in the choice of indicators and corrections to the underlying data. Country scores and rankings may thus differ compared 
with previous publications. 
Source: Eurostat, JRC, European Commission, EEA, EAFO 

33 

 
 
 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 

The  green  transition  not  only  encompasses 
environmental 
to 
improvements 
sustainability, but also includes a significant 
social  dimension.  While  measures  in  this  regard 
include the opportunity for sustainable growth and 
job creation, it must also be ensured that no one is 
left  behind  and  all groups  in  society  benefit  from 
the  transition.  Slovakia´s  green  economy  is  still 
its  development,  supported  by 
limited  and 
investments and reforms included in the RRP, can 
foster sustainable growth and quality job creation; 
at the same time, the green transition is expected 
to affect low to middle-income groups to a larger 
extent. 

among 

belongs 

Slovakia 
the  most 
industrialised  countries  in  the  EU  and  the 
green transition might bring some challenges 
for  its  economy;  at  the  same  time,  Slovakia’s 
green transition benefits from a comparatively low 
carbon  energy  mix  and  strong  focus  on  green 
economy under the Recovery and Resilience Plan.  

transition. 

In  particular 

Slovakia’s  Recovery  and  Resilience  Plan 
(RRP) includes some major investments for a 
fair  green 
the 
investments  in  new  or  renovation  of  existing 
healthcare and long-term care establishments are 
all  planned  with  due  account  for  the  energy 
efficiency  standards.  Similarly,  the  completion  of 
the  school  infrastructure,  as  well  as  the  new 
investments  in  the  tertiary  education  will  all  be 
supporting  the  green  economy.  The  Slovakia’s 
integrated  national  energy  and  climate  plan 
(NECP)  of  December  2019  looks  into  the  matters 
of energy poverty with some distance, stating that 
it is more a matter for social than energy policy. In 
addition, the programmes under the ESF+ and the 
Just  Transition  Fund  (JTF)  will  provide  further 
to  green  skills  and  support  green 
support 
transition.   

(EII),  including  metals,  chemicals,  non-metallic 
minerals,  and  automotive  manufacturing (37), 
provides jobs for 5.7% of the total workforce, one 
of the highest share among EU Member States. In 
particular,  Slovakia’s  automotive  manufacturing 
sector is among the largest  in the EU  in terms of 
employment  share. 
In  this  context,  up-  and 
reskilling  could  be  particularly  important  (see 
Annex 15).  

As  for  the  social  dimension  of  the  green 
transition,  ensuring  access  to  essential 
transport  and  energy  services,  appears 
overall  less  of  a  challenge  in  Slovakia.  The 
share  of  the  rural  population  at  risk  of  poverty  is 
13.8%  against  the  EU  average  of  18.7% (38).  The 
share of the population being unable to keep their 
homes adequately warm is 5.8%, in 2020; a value 
that is virtually unchanged compared to 2015, and 
is below the EU average (8.2%). The lowest income 
decile is affected most (see Figure 2). The average 
carbon  footprint  of  the  top  10%  of  emitters  is 
about  4.3  times  higher  than  that  of  the  bottom 
50%,  which  represents  a  relatively  moderate  gap 
against the EU average of 5.3. 

Tax  systems  are  key  to  ensuring  a  fair 
transition  towards  climate  neutrality (39). 
Slovakia’s  revenues  from  total  environmental 
taxes  decreased  slightly  from  2.5%  of  GDP  in 
2015  to  2.39%  in  2019,  and  remained  relatively 
stable  in  2020  (against  2.24%  in  the  EU).  The 
labour  tax  wedge  for  low-income  earners (40) 
increased  from  32.8%  in 2015  to  37.3% in  2019 
(36.6% in 2021), compared to 31.9% in the EU in 
2021  (see  Annex  17).  Redistributive  measures 
accompanying  environmental  taxation  can  have 
the  potential  to  foster  progressive  measures  and 
to  have  a  positive  impact  on  the  disposable 
income  of  households  in  the  lowest  segments  of 
the income distribution (41). 

intensity  of 

The  economy  has  slightly  reduced  its carbon 
footprint,  while  energy-intensive  sectors 
remain  sizeable.  The  greenhouse  gas  (GHG) 
emissions 
the  Slovak  economy 
decreased  slightly  between  2015  and  2020  (in 
terms  of  gross  value  added),  but  stands  62% 
above  the  EU  average.  The  carbon  footprint  per 
worker is at 13.09 tons of GHG emissions around 
the  EU  average  (13.61)  (see  Figure  1).  Declining 
sectors  present  in  Slovakia  include  coal/lignite 
fuel  based  electricity 
extraction  and 
fossil 
industry 
production  Slovakia’s  energy-intensive 

(37)  2020 European Semester: Overview of Investment Guidance 
on the Just Transition Fund 2021-2027 per Member State 
(Annex D) 

(38)  Based on COM(2021) 568 final (Annex I) as a proxy for 

potential transport challenges in the context of the green 
transition (e.g. due to vulnerability to fuel prices). 

(39)  COM(2021) 801 final. 

(40)  Tax wedge for a single earner at 50% of the national 
average wage (Tax and benefits database, European 
Commission/OECD). 

(41)  SWD(2021) 641 final PART 3/3. 

34 

 
 
                                                 
 
Graph A6.1: Fair green transition challenges 

Numbers are the normalised indicator performance, signifying factors relative to the EU27 average. Carbon inequality average 
emissions per capita 10% vs bottom 50% (2019) 
Source: Eurostat, World inequality database 

Graph A6.2: Energy poverty by income decile 

HH050: Ability to keep home adequately warm 
HY020: Total disposable household income 
Source: Eurostat EU-SILC survey (2020) 

35 

0.000.501.001.502.002.50GHG_GVA(MS/EU)GHG_worker(MS/EU)Empl_share_EII(MS/EU)AROP_rural(MS/EU)Energy_poverty(MS/EU)Carbon_inequality(MS/EU)SlovakiaEU 2020Slovakia 20150%5%10%15%20%25%30%12345678910SlovakiaEuropean Union 
 
 
   
  
PRODUCTIVITY 
PRODUCTIVITY 
ANNEX 7: RESOURCE EFFICIENCY AND PRODUCTIVITY 
ANNEX 7: RESOURCE EFFICIENCY AND PRODUCTIVITY 

waste. 

while 

minimising 

The  efficient  use  of  resources  is  key  to 
ensuring  competitiveness  and open strategic 
autonomy, 
the 
environmental  impact.  The  green  transition 
presents  a  major  opportunity  for  European 
industry 
clean 
creating  markets 
technologies  and  products.  It  will  have  an  impact 
across  the  entire  value  chain  in  sectors  such  as 
energy and transport, construction and renovation, 
food  and  electronics,  helping  create  sustainable, 
local and well-paid jobs across Europe. 

for 

by 

In  2020,  circular  material  use  in  Slovakia 
was  6.4%,  only  half  the  EU27  average  of 
12.8%.  At  the  same  time,  the  circular  economy 
has  become  more  important  not  only  to  support 
the  green  transition,  but  also  the  strategic 
autonomy of the country. 

Resource  productivity  in  Slovakia  remains 
below the EU average. In 2020 it was 1.83 PPS 
per kg, while the EU average was 2.23 PPS per kg. 
and 
Fundamental 
consumption,  which  are  a  prerequisite  for  the 
transition  towards  sustainability,  are  even  more 
challenging  to  implement  in  Slovakia  due  to  its 
current economic model. 

production 

changes 

in 

Although 
generation 
Slovakia’s  waste 
remained  below  the  EU  average  in  2018 
(2.277kg/capita  vs  around  5.234  kg/capita), 
there  has  been  a  significant  increase  since 
2016 
first  waste 
prevention  programme  (WPP)  was  put  in  place  in 
2014,  but  it  has  had  no  effect  in  reducing 
municipal waste. Although Slovakia’s recycling rate 
has significantly increased since 2015, growth has 
not  been  decoupled  yet  from  its  generation  of 

(1.953  kg/capita).  The 

Graph A7.1: Economic importance and expansion of the circular economy 

Source: Eurostat 

36 

1.78%1.76%1.78%1.78%0.74%0.77%0.79%0.84%1.72%1.73%1.75%1.71%0.94%0.94%0.96%0.97%0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%1.8%2.0%2015201620172018Persons employed in the circular economy (% of total employment)Value added at factor cost (% of GDP )EU 27 (persons employed)EU 27 (value added) 
 
 
 
 
  
Table A7.1: Selected resource efficiency indicators 

Source: Eurostat 

37 

SUB-POLICY AREA201520162017201820192020EU27 CircularityResource Productivity (Purchasing power standard (PPS) per kilogram)1.71.71.61.61.81.82.22020Material Intensity (kg/EUR)0.80.80.80.80.80.70.82020Circular Material Use Rate (%)5.15.35.04.96.46.412.82020Material footprint (Tones/capita)------14.52019Waste Waste generation (kg/capita, total waste)-1 953-2 277--5 2342018Landfilling (% of total waste treated)-47.1-39.2-38.52018Recycling rate (% of municipal waste)14.92329.836.338.542.247.82020Hazardous waste (% of municipal waste)-5-4--42018CompetitivenessGross value added in environmental goods and services sector (% of GDP)------2.32018Private investment in circular economy (% of GDP)0.20.20.20.3--0.12018Latest year  
 
 
  
 
Slovakia  is  rolling  out  new  digital  public 
quality, 
poor 
their 
but 
services, 
interoperability 
user-friendliness 
and 
discourage people and businesses from using 
them. (44)  The  digital  public  services  for  citizens 
indicator is below the EU average. This difference 
is 
the  digital  public  services  for 
businesses  indicator.  The  recovery  and  resilience 
plan  contains  several  important  measures  aimed 
to improve and broaden the scope of digital public 
services.  

lower 

in 

ANNEX 8: DIGITAL TRANSITION 
ANNEX 8: DIGITAL TRANSITION 

The Digital Economy and Society Index (DESI) 
monitors EU Member States’ digital progress. 
The  areas  of  human  capital,  digital  connectivity, 
the 
technologies  by 
businesses  and  digital  public  services  reflect  the 
Digital  Decade  cardinal  points (42).  This  Annex 
describes Slovakia’s DESI performance. 

integration  of  digital 

The  digital  transformation  of  the  economy 
and  society  is  at  the  centre  of  Slovakia’s 
Recovery and Resilience Plan and amounts to 
21% of its total budget (43). Digital reforms and 
investments  in  the  plan  should  help  modernise 
Slovakia,  with  the  main  focus  on  public  services, 
skills and digitalisation of businesses.  

Slovakia  has  a  mixed  performance  in  the 
DESI  human  capital  dimension.  The  country  is 
just  above  the  EU  average  for  basic  digital  and 
below  EU  average  for  above-basic  digital  skills. 
Digital skills need to improve across the population 
to  successfully  meet  the  challenges  of  digital 
transformation.  The  share  of  ICT  specialists  in 
total  employment  has  grown  and  is  almost  equal 
to the EU average.  

Improving  very  high  capacity  network 
coverage would enable a wider use of digital 
technologies and services by households and 
businesses.  Recently,  the  share  of  households 
covered  by  fixed  very  high  capacity  networks 
increased, but remains below the EU average. 

there 

its  digital  economy,  but 

Slovakia  is  intensifying  its  efforts  to  scale 
up 
is 
improvement.  The 
considerable  room  for 
share  of  SMEs  reaching  at  least  a  basic  level  of 
digital  intensity  is  below  the  EU  average.  For  the 
use of advanced technologies, the country’s results 
are mixed: the gap with the EU  average for cloud 
services  is  rather  small  but  larger  for  artificial 
intelligence  and  big  data.  As  part  of  the  recovery 
and  resilience  plan,  digitalisation  of  companies, 
including  SMEs,  should  be  boosted  by  developing 
Digital Innovation Hubs and supporting the use of 
advanced digital technologies.  

(42)  2030 Digital Compass: the European Way for the Digital 

Decade Communication, COM (2021) 118 final 

(43)  The share of financial allocation contributing to digital 

objectives has been calculated using Annex VII of the RRF 
Regulation. 

(44)  Source: EGovernment benchmark 2021 

38 

 
 
                                                 
                                                 
 
Table A8.1: Key Digital Economy and Society Index Indicators 

Source: Digital Economy and Society Index 
(*)  The 5G coverage indicator does not measure users’ experience, which may be affected by a variety of factors such as the type 
of device used, environmental conditions, number of concurrent users and network capacity. 5G coverage refers to the percentage 
of populated areas as reported by operators and national regulatory authorities. 

39 

EUEU top-performanceHuman capitalDESI 2020DESI 2021DESI 2022DESI 2022DESI 2022At least basic digital skillsNANA55%54%79%% individuals202120212021ICT specialists3.7%4.2%4.3%4.5%8.0%% individuals in employment aged 15-7420192020202120212021Female ICT specialists14%16%15%19%28%% ICT specialists20192020202120212021ConnectivityFixed Very High Capacity Network (VHCN) coverage45%50%67%70%100%% households201920202021202120215G coverage (*)NA0%14%66%99.7%% populated areas2020202120212021Integration of digital technologySMEs with at least a basic level of digital intensityNANA43%55%86%% SMEs202120212021Big data9%6%6%14%31%% enterprises20182020202020202020CloudNANA31%34%69%% enterprises202120212021Artificial IntelligenceNANA5%8%24%% enterprises202120212021Digital public servicesDigital public services for citizensNANA6575100Score (0 to 100)202120212021Digital public services for businessesNANA7582100Score (0 to 100)202120212021Slovakia 
 
 
 
  
 
 
 
technological development, such as simplifying the 
public-private 
regulatory 
cooperation. 

framework 

for 

ANNEX 9: INNOVATION 
ANNEX 9: INNOVATION 

The  present  annex  provides  a  general 
overview  on  the  performance  of  the  Slovak 
research  and  innovation  system.  According  to 
the  2021  edition  of  the  European  Innovation 
Scoreboard (45),  Slovakia  is an  emerging innovator 
but  its  performance  relative  to  the  EU  has 
decreased  over  time.  Total  R&D  intensity  reached 
0.91%  in  2020  and  remains  well  below  the  EU 
average of 2.32%.  

the 

science  harm 

A  fragmented  R&I  governance  and  the  low 
quality  of  public 
the 
performance  of  Slovak  R&I.  In  2020,  public 
R&D  intensity reached 0.42% of GDP and despite 
a  slight  increase  over  time,  it  remains  behind  the 
EU  average  of  0.78%  of  GDP.  For  scientific 
excellence,  the  share  of  scientific  publications 
among 
top  10%  most  cited  scientific 
publications  worldwide  is  about  half  the  EU 
average, and the number of patent applications is 
very low. The number of new graduates in science 
and  engineering  also  continues  to  decrease.  The 
Recovery  and  Resilience  Plan 
(RRP)  has  an 
ambitious  R&I  reform  agenda  to  address  the 
fragmentation  of  R&I  governance  and  the  lack  of 
coordination between ministries and implementing 
agencies.  In  addition,  Slovakia  will  reform  the 
scientific  performance  evaluation  of  higher 
education  institutes  and  improve  R&I  support 
instruments.  

innovation 

Limited cooperation between universities and 
insufficient  support  for 
businesses  and 
business 
restrict  knowledge 
production and technology diffusion. Although 
Slovakia offers generous R&D tax incentives, total 
public  sector  support  for  business  enterprise 
expenditure on R&D remains very low (0.045% of 
GDP in  2019 in  comparison  to  the  EU  average  of 
0.196%).  Moreover,  business  R&D  intensity  is 
weak  and  public-private  scientific  co-publications 
remain below the EU average  and are decreasing. 
The  Slovak  recovery  and  resilience  plan  includes 
the  transformation  of  the  Slovak  Academy  of 
Sciences into a public organisation. This will make 
it  possible  to  receive  funding  from  different 
sources,  including  the  private  sector,  and  thus 
strengthen the cooperation with the private sector. 
Other  measures  would  optimise  and  improve  the 
results  and  domestic 
transfer  of  scientific 

(45)  2021 European Innovation Scoreboard, Country profile: 

Slovakia, https://ec.europa.eu/docsroom/documents/45934 

40 

 
 
                                                 
 
 
Table A9.1: Key research, development and innovation indicators 

Source: DG Research and Innovation - Common R&I Strategy and Foresight Service - Chief Economist Unit 
Data: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe 

41 

CompoundEUannual growthaverage2010-20R&D Intensity (GERD as % of GDP)0.611.160.840.830.914.12.32Public expenditure on R&D as % of GDP0.350.830.380.370.421.80.78Business enterprise expenditure on R&D (BERD) as % of GDP0.260.320.450.450.496.81.53Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 2.844.9::79.9PCT patent applications per billion GDP (in PPS)0.40.40.6::5,1 3.5Public-private scientific co-publications as % of total publications5.85.65.65.65.5-0.69.05New graduates in science & engineering per thousand pop. aged 25-3417.613.19.99:-7.716.3Total public sector support for BERD as % of GDP0.0310,035:0.0420.05:4.30.196R&D tax incentives: foregone revenues as % of GDP0.000020.0030.0280.03:132.20.100Share of environment-related patents in total patent applications filed under PCT (%) 17,720,2 16,2  ::-1,1 12,8 Venture Capital (market statistics) as % of GDP0.0010.0080.0070.010.01631.20.054Employment in fast-growing enterprises in 50% most innovative sectors9.67.79.27.8:-2.25.52020Slovakia2010201520182019Finance for innovation and Economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation  
 
  
 
ANNEX 10: INDUSTRY AND SINGLE MARKET 
ANNEX 10: INDUSTRY AND SINGLE MARKET 

prosperity,  well-being 

Productivity  growth  is  a  critical  driver  of 
and 
economic 
convergence over the long run.  A major source 
of  productivity  for  the  EU  economy  is  a  well-
functioning single market, where fair and effective 
competition  and  a  business  friendly  environment 
are  ensured, 
in  which  small  and  medium 
enterprises  (SMEs)  can  operate  and  innovate 
without  difficulty.  Businesses  and  industry  rely 
heavily  on  robust  supply  chains  and  are  facing 
bottlenecks that bear a negative impact on firms’ 
productivity 
levels,  employment,  turnover  and 
entry/exit  rates.  This  may  impact  the  Member 
States’  capacity  to  deliver  on  Europe’s  green  and 
digital transformation. 

Productivity growth in Slovakia has slowed in 
recent  years.  While  the  country  experienced  a 
4.9%  increase  in  hours-based  labour  productivity 
in  2020  (one  of  the  highest  in  the  EU),  this  was 
mainly  a  result  of  the  collapse  in  hours  worked 
during 
the  pandemic  amid  short-time  work 
schemes.  In  addition,  the  growth  contribution  of 
total  factor  productivity  (TFP)  remains  subdued 
partially due to the limited investment in R&I and 
the  slow  uptake  of  digital  technologies  by 
companies. Support to R&I and digitalisation from 
the  recovery  and  resilience  plan 
(RRP)  and 
Cohesion policy funds can lead to high productivity 
gains in the coming years if properly implemented.  

than 

services are still heavily regulated thus hampering 
competition.  The  level  of  restrictiveness  remains 
lawyers, 
the  EU  average 
higher 
accountants/tax 
civil 
advisers, 
engineers,  patent  agents  and  tourist  guides (47), 
with only a few measures put in place to address 
this since 2017.  

for 
architects, 

As Slovakia is well integrated in global value 
chains, its resilience to external shocks could 
become  a  challenge.  Material  shortages  are 
being reported more often by companies, reaching 
23%  of  the  respondents  in  2020  compared  to 
11% in 2017 and 2018. Amid low R&I investment 
and  low  diversification,  the  strong  manufacturing 
sector is vulnerable to external shocks. There have 
been  recent  disruptions  to  supply  chains,  e.g.  a 
semiconductors  shortage  affected  negatively  the 
automotive industry, which is critical for the Slovak 
economy.  The 
renewables 
electricity capacity needs to accelerate in order to 
reduce  dependence  on  fossil  fuel  imports  and 
make  the  economy  more  resilient  to  adverse 
external energy supply and price shocks. 

rate  of 

installed 

for 

the 

RRP 

reforms 

improvements, 

limiting 
promising, 

business 
Despite 
environment  still  faces  challenges.  While 
the 
ongoing 
administrative  burden  are 
late 
payments and subdued access to finance hamper 
investment  potential 
in  Slovakia.  Liquidity 
measures  decreased  the  number  of  bankruptcies 
in  2020  and  2021,  but  the  costly  and  lengthy 
insolvency procedures hinder resource reallocation. 
Improvements  to  the  insolvency  framework  are 
foreseen in the RRP. In 2020, business investment 
in  the  country  remained  below  the  EU  average, 
and it was also affected by labour shortages, with 
21% of the companies facing such constraints (46).   

The Slovak economy is well-integrated in the 
Single  Market,  but  some  barriers  remain. 
While  Slovakia  is  implementing  reforms  to  speed 
up  public  procurement,  the  use  of  quality  criteria 
remains  limited.  In  2020,  about  94%  of  the 
contracts in Slovakia were awarded based only on 
lowest  price.  Furthermore,  professional 
the 

(46)  ECFIN consumer & business survey  

(47)  Commission SWD on taking stock of and updating the reform 
recommendations for regulation in professional services of 
20172, 

42 

 
 
                                                 
                                                 
 
Table A10.1: Key Single Market and Industry Indicators 

Source: See above in the table the respective source for each indicator in the column “Description” 

43 

SUB-POLICY INDICATOR NAMEDESCRIPTION20212020201920182017Growth EU27 Value added by source (domestic)VA that depends on domestic intermediate inputs, % [source: OECD (TiVA), 2018]57.4662.6%Value added by source (EU)VA imported from the rest of the EU, % [source: OECD (TiVA), 2018]24.7119.7%Value added by source (extra-EU)% VA imported from the rest of the world, % [source: OECD (TiVA), 2018]17.817.6%Cost competitivenessProducer energy price (industry)Index (2015=100) [source: Eurostat, sts_inppd_a]119.3110.9108.7103.594.626.1%127.3Material Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]23881111109%26%Labour Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]2112243327-22%14%Sectoral producer pricesAverage (across sectors), 2021 compared to 2020 and 2019, index [source:Eurostat]n.a.5.4%Concentration in selected raw materialsImport concentration a basket of critical raw materials, index [source: COMEXT]0.230.230.210.230.230%17%Installed renewables electricity capacity Share of renewable electricity to total capacity, % [source:Eurostat, nrg_inf_epc]40.9041.5041.4040.102%Net Private investmentsChange in private capital stock, net of depreciation, % GDP [source: Ameco]1.54.23.43.8-60.5%2.6%Net Public investmentsChange in public capital stock, net of depreciation, % GDP [source: Ameco]0.30.50.60.250%0.4%Single Market integrationIntra-EU tradeRatio of Intra-EU trade to Extra-EU trade, index [source: Ameco]3.863.933.863.943.92-2%1.59Professional services restrictivenessRegulatory restrictiveness indicatorRestrictiveness of access to and exercise of regulated professions (professions with above median restrictiveness, out of the 7 professions analysed in SWD (2021)185 [source: SWD (2021)185; SWD(2016)436 final])5   50%3.37Professional qualificationRecognition decisions w/o compensationProfessionals qualified in another EU MS applying to host MS, % over total decisions taken by host MS [source: Regulated professions database]60.945%Transposition - overall5 sub-indicators, sum of scores [source: Single Market Scoreboard]Below averageAbove averageAbove averageAbove averageInfringements - overall4 sub-indicators, sum of scores [source: Single Market Scoreboard]On averageBelow averageOn averageBelow averageInvestment protectionConfidence in investment protectionCompanies confident that their investment is protected by the law and courts of MS if something goes wrong, % of all firms surveyed [source: Flash Eurobarometer 504]3456%BankruptciesIndex (2015=100) [source: Eurostat, sts_rb_a]406.8605.5539.7206.597.0%70.1 (2020)Business registrationsIndex (2015=100) [source: Eurostat, sts_rb_a]135.6143.3139.2136.6-0.7%105.6Late paymentsShare of SMEs experiencing late payments in past 6 months, % [source: SAFE]45.650.854.3n.a.n.a.-16%45%EIF Access to finance index - LoanComposite: SME external financing over last 6 months, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.390.380.370.2936.0%0.56 (2020)EIF Access to finance index - EquityComposite: VC/GDP, IPO/GDP, SMEs using equity, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.080.070.060.0632.9%0.18 (2020)% of rejected or refused loansSMEs whose bank loans’ applications were refused or rejected, % [source: SAFE]26.38.811.513.416.262.6%12.4%SME contractorsContractors which are SMEs, % of total [source: Single Market Scoreboard]7574756613.6%63%SME bidsBids from SMEs, % of total [source: Single Market Scoreboard]7674796517%70.8%HEADLINE INDICATORSEconomic structureRESILIENCEShortages/supply chain disruptionsStrategic dependenciesBusiness demographyAccess to financePublic procurement Investment dynamicsSINGLE MARKETCompliance - cooperation EC and MSBUSINESS ENVIRONMENT - SMEs 
 
 
   
 
ANNEX 11: PUBLIC ADMINISTRATION 
ANNEX 11: PUBLIC ADMINISTRATION 

capacity 

administrative 

Good 
enables 
economic  prosperity,  social  progress  and 
fairness. Public administrations at all government 
levels deliver crisis response, ensure the provision 
of  public  services  and  contribute  to  building 
resilience  for  the  sustainable  development  of  the 
EU economy.  

of 

public 
effectiveness 
the 
Overall, 
administration 
is  below  the 
in  Slovakia 
average in the EU27 (48). The quality and access 
to  public  services present an  important  challenge. 
The  e-government  score  is  59.8  compared  to  the 
EU average of 70.9 and 62% of users vs 70.7% in 
the  EU.  The  Slovak  recovery  and  resilience  plan 
(RRP)  provides  for  substantial  investments  in 
digital technologies across many policy areas, such 
as the judiciary, healthcare, and police and rescue. 
User-centricity  is  expected  to  improve  via  a  new 
digital  platform  for  e-services,  and  administrative 
procedures  will  be  simplified  based  on  the 
principle  of  ‘life  events.’  Reforms  will  aim  to 
improve  cyber  security  and  stability  of  systems 
supporting  government  services.  Investments  in 
shared services will aim to address weaknesses in 
local governance.  

Slovakia  scores  low  on  selected  indicators 
measuring  government  transparency  and 
oversight  institutions.  It  ranks  among  the 
bottom  20%  in  the  provision  of  open  data  (see 
its 
graph  A11.1).  Moreover,  the  mandate  of 
independent  fiscal  institution  is  narrower  than 
most others in the EU.  

In 
justice  system  faces  challenges. 
The 
particular,  the  administrative  cases  are  lengthy, 
with  an  increasing  trend  (585  days  in  the  first 
instance in 2020 compared to 401 days in 2018) 
with  a  clearance  rate  of  only  86%  in  2020.  The 
quality of the justice system is overall good: digital 
tools  are  widely  used  in  courts,  but  gaps  remain. 
As regards judicial independence and the integrity 
of the justice system, concerns remain. (49)  

There  is  room  for  improvement  in  selected 
fiscal framework indicators. This applies to the 
Commission´s  strength  of  fiscal  rules  index.  The 
Single  Market  Scoreboard’s  public  procurement 

(48)  Worldwide Governance Indicators, 2020.  

(49)  For more detailed analysis of the performance of the justice 
system in Slovakia, see the 2022 EU Justice Scoreboard 
(forthcoming) and the country chapter for Slovakia of the 
Commission’s 2022 Rule of Law Report (forthcoming). 

indicator reveals high shares of contracts awarded 
just  a  single  bidder  and 
where  there  was 
underperformance  on  different  measures  of 
efficiency  (see  map  A11.1).  The  RRP  aims  to 
improve  public  procurement.  Slovakia  amended 
the  Public  Procurement  Act  in  2021,  in  particular 
to speed up procedures.  

Graph A11.1: Open data maturity 

Source: Open Data Maturity | data.europa.eu  

Graph A11.2: Performance on the single market 
public procurement indicator 

The competition and transparency indicators are triple-
weighted, whereas the efficiency and quality indicators have 
unitary weights. All others receive a 1/3 weighting in the SMS 
composite indicator  
Source: Single market scoreboard 2020 data.  

Administrative  capacity  at  all  government 
levels  in  Slovakia  remains  a  challenge  for 
implementing  reforms  and  absorbing  EU 
funds. As Table A11.1 below shows, skills remain 
low  with  a  low  share  of  public  administration 
employees  with  tertiary  education  (52.2%  vs 
55.3%  in  the  EU)  and  a  very  low  percentage  of 

44 

00.10.20.30.40.50.60.70.80.9SKEU27 averageOpen Data PolicyOpen Data QualityOpen Data PortalOpen Data Impact 
 
                                                 
   
 
 
 
a 

is 

for 

public administration employees who participate in 
adult  learning  (6.4%  vs  18.6%  in  the  EU).  The 
proportion  of  civil  servants  between  55  and  74 
years  old  (21.2%)  is  close  to  the  EU  average 
in  staffing  and 
influence 
(21.3%).  Political 
strengthening 
risk 
appraisals 
professionalism.  Strategic  planning  and 
inter-
ministerial  coordination  has 
improved.  Public 
consultations  have  benefited  from  using  digital 
platforms.  While  regulatory  impact  assessment 
and  evaluations  are  not  consistently  carried  out, 
especially  due  to  the  fast-track  adoption  of  laws, 
Slovakia  has  embarked  on  a  series  of  reforms  to 
improve 
shortcomings.  Administrative 
capacities  have  been  strengthened  to  implement 
Slovakia’s RRP. 

these 

45 

 
Table A11.1: Public administration indicators – Slovakia 

This table shows a selection of indicators measuring country performance in policies that improve administrative capacity. The 
indicators fall into five main categories: i) e-government; ii) accountability; iii) civil service; iv) fiscal framework and v) evidence-
based policy making. In dark grey are indicators below or at 20th percentile, meaning that performance is at the bottom of the 
distribution. In lighter grey are the indicators below the average but above the 20th percentile 
(1) High values stand for good performance barring indicators # 7 and 8. 
(2) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as the 
existence of key enablers for the provision of those services. 
(3) Break in the series in 2021. 
(4) Defined as the absolute value of the difference between the share of men and women in senior civil service positions. 
Source:  ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Fiscal Governance 
Database (# 4, 9, 10); Labour Force Survey, Eurostat (# 5, 6, 8), European Institute for Gender Equality (# 7), Single Market 
Scoreboard public procurement composite indicator (# 11); OECD Indicators of Regulatory Policy and Governance (# 12). 

46 

SK20172018201920202021EU27157.062.069.068.062.070.82nananana59.870.93nananana50.181.1444.644.644.644.6na56.8536.838.342.845.252.255.364.66.97.13.46.418.673.47.05.65.60.421.8819.618.019.121.521.221.390.750.750.750.75na0.72101.51.51.51.5na1.5115.70.7-2.31.3na-0.7121.97nana1.98na1.7Indicator (1)Medium term budgetary framework indexStrength of fiscal rules indexPublic procurement composite indicatorShare of individuals who used internet within the last year to interact with public authorities (%)2021 e-government benchmark´s overall score (2) 2021 open data maturity indexScope Index of Fiscal InstitutionsShare of public administration employees with tertiary education, levels 5-8  (3)Educational attainment level, adult learning, gender parity and ageingOpen government and independent fiscal institutionsParticipation rate of public administration employees in adult learning (3)Gender parity in senior civil service positions (4)Index of regulatory policy and governance practices in the areas of stakeholder engagement, Regulatory Impact Assessment (RIA) and ex post evaluation of legislation Share of public sector workers between 55 and 74 years (3)E-government Public Financial Management Evidence-based policy making 
 
 
  
 
FAIRNESS 
FAIRNESS 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The European Pillar of Social Rights provides 
for  upward  convergence 
the  compass 
towards better working and living conditions 
in the EU. The implementation of its 20 principles 
on  equal  opportunities  and  access  to  the  labour 
market,  fair  working  conditions,  social  protection 
and inclusion, supported by the 2030 EU headline 
targets  on  employment,  skills  and  poverty 
reduction, will strengthen the EU’s drive towards a 
digital,  green  and  fair  transition.  This  Annex 
provides  an  overview  of  Slovakia’s  progress  in 
achieving  the  goals  under  the  European  Pillar  of 
Social Rights. 

Table A12.1: Social Scoreboard for Slovakia 

While  the  Slovak  labour  market  has  overall 
recovered,  challenges  have  intensified  for 
vulnerable  groups.  The  unemployment  rate  of 
the  low-skilled  increased  to  42.9%  in  Q3-2021 
(the highest in the EU) and the share of the long-
term  unemployed  (as  the  proportion  of  the 
unemployed)  remained  significant,  at  61.3%  in 
Q3-2021.  Young  people  were  disproportionately 
impacted  during  the  COVID-19  crisis.  In  2021 the 
NEET  rate  (the  share  of  youth  not  in  education, 
employment  or  training  in  total  population  aged 
15-29)  stood  at  14.2%,  below  the  pre-pandemic 
level  but  slightly  above  the  EU  average  (13.1%).. 
To  address  this  challenge,  under  the  European 
Social  Fund  Plus  (ESF+),  12.5%  of  the  overall 
allocation  will  be  devoted  to  fostering  youth 
employment 
Youth 
the 
Guarantee.  The  gender  employment  gap  remains 
close  to  the  EU  average,  at  8.5  pps  in  2021. 
However,  the  gender  pay  gap  (18.4  %  in  2019) 
remains  wider  than  the  EU  average  (14.1  %),  in 
spite  of  significantly  higher  tertiary  attainment 
rates  for  women.  In  addition,  the  gap  in  the 
employment rate between people with and without 
disabilities  is  23.6  pps.  Employment  opportunities 
are  particularly  weak  for  the  Roma  community, 
with  an  employment  rate at  only  20% in  the  age 
group  of  20-64  (12%  for  women).  In  addition, 
68%  of  young  people  aged  16-24  are  not  in 
employment,  neither in  education  or  training    with 
74% for women (50).  

reinforced 

under 

Slovakia has one of the highest rates of jobs 
at  risk  of  automation  in  the  OECD,  which 
points  at  the  key  role  of  upskilling  and 
reskilling. Technological change and digitalisation 
are  major  challenges  the  country  is  facing.  Skills 
mismatches  in  the  labour  market  may  affect 
employability  and  job  transitions  in  the  future.  In 
2020  Slovakia  was  among  the  countries  with 
highest  skills  mismatches  (35%)  in  the  EU  ISCED 
3-8  (upper  secondary  to  PhD  education).  Against 
this background, education, upskilling and reskilling 
will  be  key  intervention  areas  for  the  European 
Social  Fund  Plus  (ESF+).  Adult  participation  in 
learning  over  the  past  four  weeks  was  below  the 
EU  average  in  2020  (2.8%  against  9.2%).    The 
proportion  of  Slovak  adults  with  at  least  basic 
digital skills stood at 55% in 2021, just above the 

Source: European Commission. 

(50)  Slovak National Roma Inclusion Strategy 2030   

47 

7.855.014.28.53.074.66.83.9123.313.818.440.023.63.24.83.2Critical situationTo watchWeak but improvingGood but to monitorOn averageUpdate of 29 April 2022. Members States are classified on the Social Scoreboard according to a statistical methodology agreed with the EMCO and SPC Committees. It looks jointly at levels and changes of the indicators in comparison with the respective EU averages and classifies Member States in seven categories. For methodological details, please consult the Joint Employment Report 2022. Due to changes in the definition of the individuals' level of digital skills in 2021, exceptionally only levels are used in the assessment of this indicator; NEET: neither in employment nor in education and training; GDHI: gross disposable household income.Dynamic labour markets and fair working conditionsEmployment rate(% population aged 20-64) (2021)Unemployment rate(% population aged 15-74) (2021)Long term unemployment(% population aged 15-74) (2021)GDHI per capita growth (2008=100) (2020)Social protection and inclusionAt risk of poverty or social exclusion (in %) (2020)At risk of poverty or social exclusion for children (in %) (2020)Impact of social transfers (other than pensions) on poverty reduction (% reduction of AROP) (2020)Disability employment gap (ratio) (2020)Housing cost overburden (% of population) Children aged less than 3 years in formal childcare (% of under 3-years-olds) (2020)Self-reported unmet need for medical care (% of population 16+) (2020)Better than averageBest performersSocial Scoreboard for SLOVAKIAEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24) (2021)Individuals' level of digital skills (% of population 16-74) (2021)Youth NEET(% of total population aged 15-29) (2021)Gender employment gap (percentage points) (2021)Income quintile ratio (S80/S20) (2020) 
 
 
 
  
 
                                                 
 
 
EU  average  of  54%.  Workers  most  in  need  of 
continuous  education  and  training  participated 
considerably  less  than  those  less  in  need.  The 
number of children aged less than three in formal 
childcare  in  Slovakia  was  4.8%  in  2020,  which 
remains amongst the lowest in the EU (EU average 
is  32.3%  in  2020).  Slovakia  is  also  facing  a  high 
rate  of  early  leaving  from  education  and  training 
among  Roma  children,  together  with  regional 
disparities  in  educational  outcomes  (see  also 
Annex  13).  Strengthening 
the  quality  and 
inclusiveness of education and training at all levels 
is  key  for  Slovakia  to  contribute  to  reaching  the 
2030  EU  headline 
targets  on  skills  and 
employment. 

The  share  of  people  at  risk  of  poverty  or 
social  exclusion  remains  relatively  low,  but 
with  large  regional  disparities.  The  overall  at 
risk  of  poverty  or  social  exclusion  rate  (13.8%  in 
2020) has steadily declined and is among the lowest 
in  the  EU,  although  the  rate  is  still  comparatively 
high  for  children  (19.2% 
in  2020).  Regional 
disparities  are  substantial  -  the  proportion  of 
people  at  risk  of  poverty  or  social  exclusion 
ranging from 7.9% in Bratislava to 21.7% in East 
Slovakia.  Severe  material  and  social  deprivation 
still  affects  4.5%  of  the  population,  largely  linked 
to the poor living standards in marginalised Roma 
settlements.  Substantial  ESF+ 
is  
planned  to  bring  jobs  and  social  services to more 
of  these  communities  than  in  the  2021-2027 
programming period. The availability of rental and 
social  housing  in  Slovakia  remains  very  low.  The 
EU-SILC data shows that the share of households 
living  in  rental  flats  owned  by  the  public  sector 
(1.6%) is comparatively lower than the EU average 
(10.8%). Access to healthcare is generally good as 
the  share  of  the  population  reporting  unmet 
medical care needs is in line with the EU average. 
However,  mortality  due 
to  preventable  and 
treatable causes remains one of the highest in the 
EU.  At  the  same  time,  a  shortage  of  healthcare 
staff,  especially  nurses  and  general  practitioners, 
disproportionately  affects  the  accessibility  of 
healthcare in rural areas. 

investment 

48 

 
ANNEX 13: EDUCATION AND SKILLS 
ANNEX 13: EDUCATION AND SKILLS 

This  Annex  outlines  the  main  challenges  for 
Slovakia’s  education  and  training  system  in 
light of the EU-level targets of the European 
Education  Area  strategic  framework  and 
other  contextual  indicators,  based  on  the 
analysis  from  the  2021  Education  and 
Training  Monitor.  Slovakia’s  education  and 
training  system  struggles  with  low  inclusiveness 
and  quality  and  equity  challenges  that  risk 
worsening  due  to  the  pandemic.  Slovakia  lags 
significantly  behind  the  EU  average  and  the  EU-
level  targets  in  terms  of  participation  in  early 
childhood education and care, and basic skills. 

Participation  in  early  childhood  education 
and care remains one of the lowest in the EU. 
Furthermore,  the  enrolment  rate  of  children 
between  above 
three  varies 
significantly  between  the  regions,  with  East 
Slovakia  having 
(65.3%). 
Compulsory pre-primary education for 5-year-olds 
was  introduced  in  September  2021,  but  first 
evidence shows that not all got enrolled. (51) 

the  age  of 

lowest 

rate 

the 

skills. 

Educational outcomes remain low, with more 
than  half  of  pupils  from  disadvantaged 
backgrounds 
The 
lacking  basic 
proportion of young people with low basic skills in 
reading, mathematics and science as measured by 
the PISA test  – is significantly higher than the EU 
average.  Students’  socio-economic  backgrounds 
strongly  affect  their  performance  as  more  than 
half of all pupils in the bottom social quartile lack 
basic skills (51.9%). The share of top performers is 
also  low,  almost  half  the  EU  average  (1.8%  vs 
3.4%  in  EU-27).  Despite  action  taken  expected 
learning  losses  due  to  COVID-19  risk  aggravating 
educational  inequalities,  in  particular  affecting 
students with special educational  needs and from 
disadvantaged socio-economic backgrounds. Public 
expenditure  on  education  remains  below  the  EU 
average (4.2% of GDP in 2019, 4.7% in EU-27).  

(51)  Centre for Educational Analyses, blog release from 13 

January 2022, available at 
https://dennikn.sk/2678662/skolsky-tyzden-ani-po-zavedeni-
povinnosti-nechodia-do-materskej-skoly-vsetky-patrocne-
deti/?cst=0282f51931acf8e79e0056164e7f25a1f44699e4 

49 

 
 
 
                                                 
 
Table A13.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Source: Eurostat (UOE, LFS); OECD (PISA). Notes: The 2018 EU average on PISA reading performance does not include ES; u = low 
reliability, : = not available; Data is not yet available for the remaining EU-level targets under the European Education Area 
strategic framework, covering underachievement in digital skills, exposure of VET  vocational educational training graduates  to 
work based learning and participation of adults in learning 

Early school leaving has increased, and there 
are inequalities between the regions and for 
the Roma community. The share of early leavers 
from  education  and  training  dropped  sharply  in 
2021, from a low 5.3% in 2012. The rate remains 
the  highest  in  Eastern  Slovakia  (12%  in  2020), 
with  the  prevalence  of  Roma  population  and  with 
consequences  for  their  job  prospects  and  social 
inclusion. Disadvantaged students are clustered in 
the  same  schools  more  often  than  in  other  EU 
Member  States  (see  Figure  13.1.).  The  proportion 
of pupils with special  educational  needs placed in 
fully  separate  educational  settings  in  Slovakia  is 
the  highest  among  the  23  EU  countries  surveyed 
(5.63%  vs  1.55%  in  EU23) (52).  This  trend  in 
particular  affects  the  Roma  population.  The 

(52)  European Agency Statistics on Inclusive Education: 2018 

Dataset Cross-Country Report. (J. Ramberg, A. Lénárt, and A. 
Watkins, eds.). European Agency Statistics on Inclusive 
Education Odense, Denmark, www.european-agency.org  

recently  adopted  strategy  for  inclusive  education 
until 2030 aims to improve equity at all levels. 

of 

the 

attractiveness 

The 
teaching 
profession  is  limited  and  teacher  shortages 
are  pronounced.  Slovak  teachers’  salaries  are 
significantly  below 
tertiary 
educated  workers  (between  56%-75%) (53).  The 
teaching profession is perceived as less valued by 
society,  and  shortages  of  teachers  are  growing. 
Analysis (54)  shows  that  the  teaching  workforce  in 
Slovakia  needs  to  be  strengthened,  and  teacher 

those  of  other 

(53)  OECD (2021), “Slovak Republic”, in Education at a Glance 
2021: OECD Indicators, OECD Publishing, Paris. DOI: 
https://doi.org/10.1787/d8cc1985-en  

(54)  OECD Economic Surveys: Slovak Republic 2022, OECD 

Publishing, Paris, https://doi.org/10.1787/78ef10f8-en. OECD 
(2020a), Skills Strategy Slovak Republic: Assessment and 
Recommendations, OECD Skills Studies, OECD Publishing, 
Paris 2022, https://doi.org/10.1787/bb688e68-en  

50 

96%72.2%91.9%77.8%201992.8%2019Reading< 15%32.1% 20.4%31.4%201822.5%2018Mathematics< 15%27.7% 22.2%25.1%201822.9%2018Science< 15%30.7% 21.1%29.3%201822.3%2018< 9 %6.9%11.0%7.8%9.7%Men6.9%12.5%8.1%11.4%Women6.8%9.4%7.5% 7.9%Cities2.8%u9.6%4.5%u8.7%Rural areas10.1%12.2%6.4%10.0%Native6.9%10.0%7.9%8.5%EU-born:u20.7%:u21.4%Non EU-born:u23.4%:u21.6%45%31.3%36.5%39.5%41.2%Men23.5%31.2%28.2%35.7%Women39.6%41.8%51.2%46.8%Cities50.2%46.2%60.0%51.4%Rural areas23.8%26.9%31.9%29.6%Native31.2%37.7%39.5%42.1%EU-born:u32.7%28.1%40.7%Non EU-born:u27.0%44.0% 34.7%37.2% 38.3%36.9%201938.9%2019Share of school teachers (ISCED 1-3) who are 50 years or overParticipation in early childhood education (age 3+)Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)TotalBy genderBy degree of urbanisationBy country of birthTertiary educational attainment (age 25-34)TotalBy genderBy degree of urbanisationBy country of birth20152021IndicatorTargetSlovakiaEU27SlovakiaEU27 
                                                 
 
 
 
  
                                                 
 
  
 
education  policies  should  put  special  focus  on 
quality, equity and inclusive education. 

Graph A13.1: Isolation index of disadvantaged 
students, PISA 2018 

reforms  to  improve  quality  assurance,  financing 
and  governance  systems  in  higher  education.  The 
country  will  also  improve  the  alignment  between 
the labour market needs relevance and vocational 
education and training.  

The  reforms  and 
investment  under  the 
recovery and resilience plan will help address 
some  of  the  longstanding  challenges.  Key 
reforms and investments focus on expanding early 
childhood  education  and  care,  modernising  school 
education, reducing early school leaving, improving 
the  quality  of  teacher  education  and  raising 
professional requirements, improving inclusiveness 
at  all  levels,  and  desegregation  of  the  Roma 
in  higher 
in  education.  Reforms 
community 
quality, 
improve 
education 
internationalisation and governance. 

aim 

to 

The isolation index measures whether students of type (a) are 
more concentrated in some schools. The index is related to 
the likelihood of disadvantaged students to be enrolled in 
schools that enrol students of another type. It ranges from 0 
to 1, with 0 corresponding to no segregation and 1 to full 
segregation. 
Source: OECD (2019), PISA 2018 

Participation  in  higher  education  is  close  to 
the  EU  average,  but  strong  disparities  and 
shortages of specialists persist. Between 2012 
and 2021, the rate grew by 12.5 pps. However, in 
2021,  the  gender  gap  in  favour  of  women  has 
widened  and  at  23  pps  it  was  more  than  double 
the  EU  average  (11.1  pps).  The  rural-urban  gap 
stands out at 28.1 pps (EU 21.8 pps). High regional 
disparities  also  remain:  in  the  Bratislava  region 
54.9%  of  the  adult  population  have  a  tertiary 
degree,  while  in  other  regions  the  rate  ranges 
between  34.5%  and  37.2%  (2020).  The  gender 
gap in tertiary educational attainment at 19.9 pps 
in  favour  of  women  is  almost  double  the  EU 
average (10.8 pps). Furthermore, the proportion of 
graduates  in  science,  technology,  engineering  and 
mathematics  (STEM)  is  below  the  EU  average 
(21.86%  vs.  26%).Furthermore,  Slovakia  has  one 
of  the  highest  proportions  of  students  studying 
abroad  (19%  vs  2%  across  all  OECD  countries) 
and  many  of  them  do  not  return  home (55).  The 
skills mismatches are among the highest in the EU 
(see  Annex  12).  Slovakia  has  embarked  on  the 

(55)  “Slovak Republic”, in Education at a Glance 2020: OECD 

Indicators, OECD Publishing, Paris. 2020 DOI: 
https://doi.org/10.1787/93fa3f80-en; Martinak and Varsik, 
2020, https://www.minedu.sk/data/att/18017.pdf 

51 

0,000,050,100,150,200,250,30EUSK 
  
                                                 
Graph A14.2: Projected increase in public 
expenditure on health care in 2019-2070 
(reference scenario) 

ANNEX 14: HEALTH AND HEALTH SYSTEMS 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

Especially  relevant  in  light  of  the  ongoing 
COVID-19 pandemic, resilient healthcare is a 
prerequisite  for  a  sustainable  economy  and 
society.  This  Annex  provides  a  snapshot  of  the 
healthcare sector in Slovakia.  

Life  expectancy  in  Slovakia  is  low  compared 
to  the  EU  average,  and  it  fell  by  almost  ten 
months  in  2020  due  to  COVID-19.  As  of  17 
April  2022,  Slovakia  reported  3.55  cumulative 
COVID-19  deaths  per  1  000  inhabitants  and  414 
confirmed  cumulative  COVID-19  cases  per  1  000 
inhabitants. Despite improvements, mortality from 
treatable  causes  remains  much  higher  than  in 
most EU countries. 

Graph A14.1: Life expectancy at birth, years 

Source: European Commission/EPC (2021)  

Reforms  are  being  developed  to  alleviate 
shortages of healthcare workers. The rates of 
both  nurses  and  physicians  in  Slovakia  are  below 
the  EU  average,  with  shortages  particularly 
affecting  primary  care  services  in  some  regions. 
The  age  of  the  health  workforce,  coupled  with  a 
low number of nursing graduates and physicians in 
some  specialties  heighten  concerns  about  their 
future  supply.  In  response,  the  government  has 
developed  a  range  of  measures  to  increase 
training  and  improve  the  retention  rate  of  public 
healthcare workers. 

Through  its  Recovery  and  Resilience  Plan, 
Slovakia plans to invest EUR 1.26 billion (19.3 
% of the total RRP) to strengthen the physical and 
digital infrastructure of the Slovak healthcare and 
mental  care  systems  and  improve  their  cost-
effectiveness,  notably  through  modernising  the 
national public hospitals’ network. Investments and 
reforms  are  also  concentrated  in  the  historically 
underfinanced areas of long-term care.  

Source: Eurostat database 

Health  spending  in  Slovakia  was  almost  3 
percentage  points  of  GDP  below  the  EU 
average in 2019. Despite this low level, Slovakia 
provides  a  comprehensive  benefits  to  almost  the 
entire  population 
statutory  health 
through 
insurance.  The  share  of  public  spending  in  total 
health  expenditures  is  slightly  higher  than  the  EU 
average.  However, 
out-of-pocket 
spending  accounts  for  nearly  20  %  of  all  health 
spending.  Despite  the  current  relatively  young 
is 
population,  public  expenditure  on  health 
projected  to  increase  by  2.5  percentage  points  of 
GDP by 2070 (compared to 0.9 pp for the EU), and 
this raise long-term fiscal sustainability concerns.  

household 

52 

80.580.980.98181.380.476.777.377.377.477.877.0201520162017201820192020EUSlovakia6.65.70.92.50246810EUSlovakia% of GDP20192070increase 
 
   
  
 
Table A14.1: Key health indicators 

Doctors' density data refer to practising doctors except for FI, EL, PT (licensed to practice) and SK (professionally active). Nurses' 
density data refer to practising nurses (imputation from year 2014 for FI) except for IE, FR, PT, SK (professionally active) and EL 
(nurses working in hospitals only).  
More information: https://ec.europa.eu/health/state-health-eu/country-health-profiles_en 
Source:  Eurostat Database; except: * Eurostat Database and OECD, ** ECDC.  

53 

20162017201820192020EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)168.3173.7165.3163.592.1 (2017)Cancer mortality per 100 000 population315.1311.4310.6293.3252.5 (2017)Current expenditure on health, % GDP 7.06.86.77.09.9 (2019)Public share of health expenditure, % of current health expenditure80.479.980.179.879.5 (2018)Spending on prevention, % of current health expenditure 1.21.00.80.82.8 (2018)Acute care beds per 100 000 population487.8490.7481.0485.4387.4 (2019)Doctors per 1 000 population *3.53.43.53.63.8 (2018)Nurses per 1 000 population *5.75.75.75.78.2 (2018)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day **21.318.520.218.013.214.5 (2020) 
 
 
  
 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

is  an 

The  regional  dimension 
important 
factor  when  assessing  economic  and  social 
developments  in  Member  States.  Taking  into 
account  this  dimension  enables  a  well-calibrated 
and targeted policy response that fosters cohesion 
and  ensures  sustainable  and  resilient  economic 
development across all regions. With the exception 
of  the  capital  region  of  Bratislava,  Slovak  regions 
remain significantly below the EU average in terms 
of  GDP/capita  (PPS).  Regional  disparities  remain 
high,  driven  by  labour  productivity,  infrastructure 
and competitiveness gaps between the capital and 
the  less  developed  regions  of  the  country  and 
represent  a  bottleneck  for  the  green  and  digital 
transition. 

Slovakia  had  been  catching  up  with  the  rest 
of  the  EU  until  2014,  but  GDP  has  been 
diverging  from  the  EU  average  ever  since. 
Following  the  peak  of  78%,  GDP  per  head  now 
stands at 70% of the EU average. The trend is the 
same  for  all  Slovak  regions  but  the 
least 
less 
relatively 
regions  declined 
developed 
compared to the capital since the peak. GDP in the 
three regions range between 50% and 65%, while 
it is 162% of the EU average in the capital region 
of Bratislava. 

In  2018,  productivity  in  Slovakia  was  below 
the  EU  average  (at  74%).  It  ranged  between 
109% in the capital region of Bratislava and 62% 
in  Central  Slovakia  (Stredné  Slovensko).  Real 
productivity growth on an annual basis was 1.79% 
in  2010-2019.  This  varied  regionally  between 
1.7%  for  Central  Slovakia  and  2.09%  for  East 
Slovakia  (Východné  Slovensko).  Several  factors 
affect  territorial  development  trends  as  funding 

key  assets  such  as  transport  infrastructure  and 
human capital is still facing challenges in the less 
developed  regions.  All  regions  lag  behind  the 
capital  region  in  labour  market  conditions,  in  the 
share  of  population  with  tertiary  education,  the 
employment in high-tech and knowledge-intensive 
services, and R&D expenditure. 

region 

A significant regional gap in competitiveness 
prevails  between  Bratislava  and  the  rest  of 
the  country.  The  capital 
is  more 
productive,  more  innovative  (R&D)  expenditure  in 
the capital, at 1.4% of GDP, is twice as high as in 
other regions), and better connected. The Regional 
Competitiveness  Index  for  the  capital  region  in 
2019 was 76 but drops 33 in East Slovakia. West 
Slovakia  (Západné  Slovensko)  and,  in  particular, 
Central  and  East  Slovakia  lag  behind  in  terms  of 
transport  performance  by  car.  In  and  around 
Bratislava,  this  ratio  is  87.2%  but  it  drops  to 
50.3% in West Slovakia, 30.7% in Central Slovakia 
and  37.5%  in  East  Slovakia.  The  country  shows 
moderately 
performance 
low 
emphasising the regional disparities. 

innovation 

Slovak  regions  will  address  the  effects  of 
the  transition  to  climate  neutrality.  The 
territories that are most affected by the transition 
are:  the  Trenčín  region  (namely  the  Upper  Nitra 
region  with  its  coal  mining  and  coal-fired  energy 
generation), the Košice region (expected to be the 
most  affected  by  the  transition  and  with  the 
biggest potential to reduce CO2 emissions by 2030 
out  of the three regions) and the Banská Bystrica 
region  (heavily  dependent  on  climate-intensive 
industry  and  of  large  companies).  These  regions 
will  need  to  make  higher  a  greater  effort  to 
achieve  climate  neutrality  and  to  address  the 
socio-economic  impacts  of  the  transition.  In  all 
(JTF) 
three 

Just  Transition  Fund 

regions, 

Table A15.1: Slovakia, selected indicators at regional level 

Source: Eurostat 

54 

NUTS 2 RegionGDP per head (PPS)Productivity (GVA (PPS) per person employed)GDP growthUnemployment ratePopulation with high educational attainmentR&D expenditureRegional Competitiveness IndexCO2 emissions from fossil fuels  per headInnovation performanceEU27=100, 2019EU27=100, 2018Avg % change on preceding year, 2010-2019% of active population, 2020% of population aged 30-34, 2017-2019% of GDP, 2018Range 0-100, 2019tCO2 equivalent, 2018RIS regional performance groupEuropean Union1001001,577,139,42,1957,37,2Slovakia70742,856,737,40,8444,0Bratislava1621092,463,461,11,4276,09,8Moderate innovatorWest Slovakia65672,724,734,10,6945,75,5Emerging innovator +Central Slovakia57622,966,733,50,6139,94,3Emerging innovator +East Slovakia50673,4910,533,40,4832,910,6Emerging innovator + 
 
 
 
 
  
 
interventions  are  planned  to  focus  on  areas  with 
where carbon-intensive industries are located. 

Graph A15.1: Territories most affected by the 
climate transition in Slovakia 

Source: European Commission 

the  Slovak  population  was 
16.4%  of 
considered  at  risk  of  poverty  or  social 
exclusion  in  2019.  This  is  higher  in  Central 
(21.5%)  and  East  Slovakia  (21.2%).  In  addition, 
East  Slovakia  has  a  higher  share  of  early  school 
leavers  (12%  of  people  aged  18-24).  The  capital 
region can count on the country’s highest share of 
highly  educated  people  aged  30-34  (61.1%).  It  is 
almost  twice  as  high  as  the  other  Slovak  regions 
(33-34%),  which  are  below  the  EU  average 
(39.4%). 

Graph A15.2: Unemployment rate (2020) in 
Slovakia 

rate of 10.5%, which is considerably higher than in 
the other regions: 3.4% in the capital region, 4.7% 
in  West  Slovakia  and  6.7%  in  Central  Slovakia.  In 
Bratislava,  just  over  half  of  the  employment  is 
realised  in  knowledge-intensive  sectors.  These 
shares are much lower in other regions where they 
vary  between  29%  and  38%.  A  similar  pattern 
emerges  for  employment 
in  high-technology 
sectors  (10.8%  in  the  capital  region  and  less 
than5% in the other regions).  

All regions in Slovakia have been affected by 
the  COVID-19  pandemic.  There  are  differences 
between  the  regions  in  terms  of  excess  mortality 
due  to  COVID-19.  The  rate  is  23-25%  in  East 
Slovakia  and  West  Slovakia  and  17-19% 
in 
Bratislava and Central Slovakia. Estimated regional 
GDP impact of the crisis in 2020 was higher in the 
three  regions  (minus  6.34-6.72%)  than  in  the 
capital region (minus 4.75%). Slovakia was one of 
the  EU  countries  where  schools  were  closed  the 
longest  time  –(38  weeks).  Around  52  000  (7.5%) 
primary  and  secondary  school  pupils  had  no 
distance education, and up to 128 000 (more than 
18%)  pupils  head  no  online  learning (56).  The 
situation  was  critical  especially  in  schools  with  a 
from  socially 
high  proportion  of  students 
disadvantaged  backgrounds,  mainly 
in  East 
Slovakia and Central Slovakia. 

Source: European Commission 

Regional  disparities  in  employment  remain 
high.  Employment  in  the  capital  region  was 
almost  80%  in  2020,  whereas  in  East  Slovakia 
only  67.6%  of 
the  active  population  was 
employed.  This  translates  into  an  unemployment 

(56)  Ministerstvo školstva, vedy, výskumu a športu SR, Inštitút 

vzdelávacej politiky. Prístup k vzdelávaniu počas uzatvorenia 
škôl v dôsledku pandémie COVID-19. 2020. 

55 

 
 
 
 
                                                 
MACROECONOMIC STABILITY 
MACROECONOMIC STABILITY 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 

understanding 

investigate 
The 

laundering  and  countering  financing  of 
terrorism  system.  The  authorities  in  charge  can 
now  rely  on  a  broader  set  of  tools  to  prevent, 
prosecute  money 
and 
detect, 
laundering. 
of  money 
laundering  and  terrorist  financing  risks  remains 
limited, although steps are being taken to improve 
this.  Authorities  are  also  taking  steps  to  address 
emerging  risks,  in  particular  in  relation  to  virtual 
assets. The Financial Intelligence Unit (FIU) and the 
National Bank of Slovakia are taking measures to 
step  up  their  supervision.  However,  the  limited 
number  of  resources  in  the  FIU  remain  a  concern 
given 
laundering 
supervisor. Lack of human, financial and technical 
resources  also  hampers  the  financial  intelligence 
work of the FIU. The police presidium is undergoing 
financial 
a 
and 
For 
investigation 
confiscation,  the  power  to  carry  out  third-party 
confiscation  and  the  establishment  of  the  Asset 
Recovery Office are showing positive effects. 

its  role  as  the  anti-money 

its 
prosecution 

reorganisation 

improve 

role. 

to 

This  Annex  provides  an  overview  of  key 
developments  in  Slovakia’s  financial  sector. 
The Slovak banking sector remained stable despite 
the  COVID-19  pandemic.  The  banking  solvency 
ratio  remained  stable  at  19.9%  in  Q3  2021  (vs 
19.3%  in  the  EU).  Banking  sector  profitability 
remained  resilient  and  further  improved  with  a 
return  on  equity  (ROE)  of  8.7%  in  Q3  2021  (vs 
7.1%  in  the  EU).  Asset  quality  has  improved  for 
both  businesses  and  households  with  the  non-
performing  loans  (NPL)  ratio  declining  to  2.1%  in 
Q3 2021 (vs 2.1% in the EU). The cost-to-income-
ratio has declined to 54% in Q3 2021 (vs 60.4% in 
the EU). Banks have also benefited from abundant 
central  bank  liquidity,  which  stood  at  roughly 
10.9% of total liabilities in Q3 2021. The liquidity 
coverage  ratio  (LCR)  was  high  at  185.6%  in  Q3 
2021. The main challenges for Slovakia’s banking 
sector  relates  to  the  buoyant  residential  real 
estate market.  

and 

several 

identified 

The  residential  real  estate  market  exhibits 
medium-term  vulnerabilities.  The  European 
Systemic Risk Board (ESRB) (2022) (57)  has issued 
a  warning 
key 
vulnerabilities:  signs  of  house  price  overvaluation, 
high  house  price  growth,  increasing  household 
indebtedness  and  high  (mortgage)  credit  growth. 
House purchases lending year-on-year growth rate 
was 11.1% in Q3 2021. The ESRB has warned that 
the  current  policy  mix  in  Slovakia  is  appropriate 
and  partially  sufficient  in  mitigating  risks  and 
suggested  to:  fine-tune  the  existing  borrower-
based  measures  framework  to  tackle  pockets  of 
vulnerability; 
the 
alternatively, 
countercyclical capital buffer (CCyB) or introduce a 
sectoral  systemic  risk  buffer  (SyRB)  to  potentially 
reduce  mortgage  lending;  alternatively,  activate 
Article  458  of  Regulation  (EU)  No  575/2013  on 
prudential  requirements  for  credit  institutions  for 
internal  ratings based (IRB) banks’ residential  real 
estate  (RRE)  exposures  which  could  increase  the 
resilience of the banking sector; and for authorities 
to  take  complementary  steps  by  eliminating  tax 
incentives for taking mortgage debt and reforming 
the rental market. 

rebuild 

Slovakia  has 
institutional  and  organisational 
address  weaknesses 

the 
level  to 
its  anti-money 

taken  measures  at 

in 

(57)https://www.esrb.europa.eu/news/pr/date/2022/html/esrb.pr22

0211~9393d5e991.en.html  (pp. 120-122) 

56 

 
 
 
                                                 
 
 
Table A16.1: Financial soundness indicators in Slovakia 

(1)  Last data: Q3-2021 
Source: ECB, Eurostat, Refinitiv 

57 

2015201620172018201920202021Total assets of the banking sector (% of GDP)86,590,392,091,792,0101,6110,0Share (total assets) of the five largest bank (%)72,372,774,575,675,776,8-Share (total assets) of domestic credit institutions (%)114,916,415,615,114,914,213,4Financial soundness indicators:1- non-performing loans (% of total loans)4,44,63,73,22,92,52,1- capital adequacy ratio (%)17,718,018,617,818,019,319,9- return on equity (%)9,79,99,39,38,35,38,7NFC credit growth (year-on-year % change)--7,88,24,45,17,8HH credit growth (year-on-year % change)--12,410,78,56,79,2Cost-to-income ratio (%)1-55,0-54,957,856,458,059,754,0Loan-to-deposit ratio (%)190,390,596,298,599,195,489,1Central bank liquidity as % of liabilities1,21,31,71,70,75,010,9Private sector debt (% of GDP)80,488,290,091,992,195,3-Gross external debt (% of GDP)1Gross external debt (% of GDP)   - public133,232,932,431,031,036,834,2Gross external debt (% of GDP)    - private130,833,138,335,133,932,131,1Long-term interest rate spread versus Bund (basis points)38,945,359,948,950,047,329,3Market funding ratio (%)32,031,529,829,028,627,8-Green bond issuance (bn EUR)----0,4 
 
 
 
  
 
somewhat  increased  since  2010 but  is  still  below 
the EU average. 

Slovakia  could  do  more 
in  terms  of 
digitalising tax administration to help reduce 
tax  arrears  and  cut  compliance  costs. 
Outstanding  tax  arrears  have  declined  slightly  by 
0.8  pp.  to  27.4%  of  total  net  revenue.  This  is 
slightly  below  the  EU27  average  of  31.8%, 
although  that  average  is  inflated  by  very  large 
values in a few Member States. The Annual Report 
on  Taxation  2021  highlights  a  large  scope  for 
improving  the  rate  of  tax  return  e-filing.  Tax 
compliance  could  be 
further  by 
digitalisation.  Slovakia’s  intention  to  introduce  an 
e-invoicing  system  to  report  business-to-business 
transactions  is  a  step  in  this  direction.  In  2015-
2019,  the  VAT  gap  fell  by  approximately  9  pps. 
However,  despite  recent  reductions,  the  VAT  gap 
remains high in Slovakia. In 2019, it was 16.1% of 
the VAT total tax liability (VTTL), 5.6 pp above the 
EU average. 

improved 

ANNEX 17: TAXATION 
ANNEX 17: TAXATION 

This  Annex  provides  an 
indicator-based 
overview of Slovakia’s tax system. It includes 
information  on  the  tax  structure,  i.e.  the  types  of 
tax  that  Slovakia  derives  most  revenue  from,  the 
tax  burden  for  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
tax  collection  and 
provides 
compliance,  and  on  the  risks  of  aggressive  tax 
planning activity. 

information  on 

from 

relies 

labour 

revenue 

tax  system 

relatively 
Slovakia’s 
heavily  on  labour  taxation  and  consumption 
taxation and only to a low extent on property 
taxation.  The 
taxes 
increased from 14.4% of GDP in 2010 to 19.2% in 
2020  and  is  now  close  to  the  EU  average.  The 
revenue  from  consumption  taxation  increased 
from  9.9%  of  GDP  in  2010  to  11.5%  of  GDP  in 
2020  and  is  now  higher  than  the  EU  average.  In 
turn,  recurrent  taxes  on 
immovable  property 
generate  revenue  of  0.5%  of  GDP  in  2020  (as 
compared  to  the  EU  average  of  1.2%).  Moreover, 
the revenue from green taxation is 2.4% of GDP in 
2020, close to the EU average.  

The tax burden on labour is relatively high in 
Slovakia for low earners. In particular, in 2021 
the  tax  wedge  for  single  workers  earning  50%  of 
the  average  wage  was  36.6%  against  an  EU 
average of 31.9%. At higher earnings (i.e. at 100% 
and  167%  of  the  average  wage),  the  tax  wedge 
was close to the EU average. The ability of the tax 
and benefit system to reduce inequality (measured 
by  its  ability  to  reduce  the  GINI  coefficient)  has 

Table A17.1: Indicators on taxation 

(*) EU-27 simple average as there is no aggregated EU-27 value. 
Source: European Commission and OECD  

58 

2010201820192020202120102018201920202021Total taxes (including compulsory actual social contributions) (% of GDP)27.934.034.435.035.637.940.139.940.1Labour taxes (as % of GDP)14.418.218.619.220.020.720.721.5Consumption taxes (as % of GDP)9.911.211.411.510.811.111.110.8Capital taxes (as % of GDP)3.64.64.34.37.18.28.17.9Total property taxes (as % of GDP)0.40.40.40.51.92.22.22.3Recurrent taxes on immovable property (as % of GDP)0.40.40.40.51.11.21.21.2Environmental taxes as % of GDP2.12.52.42.42.42.42.42.2Tax wedge at 50% of Average Wage (Single person) (*)31.836.937.336.436.633.932.432.031.531.9Tax wedge at 100% of Average Wage (Single person) (*)38.141.941.941.341.341.040.240.139.939.7Corporate Income Tax - Effective Average Tax rates (1) (*)19.319.319.319.819.519.3Difference in GINI coefficient before and after taxes and cash social transfers (pensions excluded from social transfers)5.55.74.96.38.47.97.48.3Outstanding tax arrears: Total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)28.227.431.931.8VAT Gap (% of VTTL)18.316.111.210.5Dividends, Interests and Royalties (paid and received) as a share of GDP (%)5.63.73.110.710.5FDI flows through SPEs (Special Purpose Entities), % of total FDI flows (in and out)0.047.846.236.7SlovakiaEU-27Financial Activity RiskTax structureProgressivity & fairnessTax administration & compliance 
 
 
 
 
  
 
Graph A17.1: Indicators on tax wedge 

(1) The second earner average tax wedge measures how much extra personal income tax (PIT) plus employee and employer social 
security contributions (SSCs) the family will have to pay as a result of the second earner entering employment, as a proportion of 
the second earner’s gross earnings plus the employer SSCs due on the second earner’s income. For a more detailed discussion see 
OECD (2016), “Taxing Wages 2016”, OECD Publishing, Paris. http://dx.doi.org/10.1787/tax_wages-2016-en  
(*) EU-27 simple average as there is no aggregated EU-27 value. 
Source: European Commission 

59 

36.639.041.343.345.4102030405060At 50% of Average Wage (Singleperson)At 67% of Average Wage (Singleperson)At 100% of Average Wage (Singleperson)At 167% of Average Wage (Singleperson)For second earner at 67% of AverageWage (Two earner couple, 1st earner100% of AW) (1)Tax wedge 2021 (%)SKEU-27 (*) 
  
ANNEX 18: KEY ECONOMIC AND FINANCIAL INDICATORS 
ANNEX 18: KEY ECONOMIC AND FINANCIAL INDICATORS 

Table A18.1: Key economic and financial indicators 

(1) NIIP excluding direct investment and portfolio equity shares 
(2) domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
Source: Eurostat and ECB as of 2 May 2022, where available; European Commission for forecast figures (Spring forecast 2022) 

60 

2004-072008-122013-1820192020202120222023Real GDP (y-o-y)7.82.02.92.6-4.43.02.33.6Potential growth (y-o-y)5.83.62.12.21.11.42.02.8Private consumption (y-o-y)6.51.22.72.7-1.31.21.91.9Public consumption (y-o-y)2.11.92.24.60.91.9-1.70.2Gross fixed capital formation (y-o-y)9.9-1.53.36.7-11.60.610.813.4Exports of goods and services (y-o-y)17.74.15.00.8-7.310.22.97.4Imports of goods and services (y-o-y) 16.51.65.42.1-8.211.23.47.6Contribution to GDP growth:Domestic demand (y-o-y)6.40.62.63.8-3.01.22.83.9Inventories (y-o-y)0.6-0.70.40.0-2.22.60.00.0Net exports (y-o-y)0.72.0-0.1-1.20.9-0.8-0.5-0.4Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.40.6-0.1-0.4-0.8-0.3-0.10.1Capital accumulation (y-o-y)1.21.01.01.20.40.40.91.4Total factor productivity (y-o-y)4.22.01.11.41.41.41.21.2Output gap1.6-0.2-0.62.9-2.7-1.1-0.80.0Unemployment rate14.812.610.55.76.76.86.76.3GDP deflator (y-o-y)3.11.00.52.52.42.46.65.5Harmonised index of consumer prices (HICP, y-o-y)4.12.70.72.82.02.89.86.8Nominal compensation per employee (y-o-y)8.43.83.66.83.65.97.87.0Labour productivity (real, hours worked, y-o-y)4.91.72.22.34.92.90.11.0Unit labour costs (ULC, whole economy, y-o-y)1.92.12.25.26.32.27.43.9Real unit labour costs (y-o-y)-1.11.01.82.63.8-0.20.8-1.5Real effective exchange rate (ULC, y-o-y)6.02.21.22.2....Real effective exchange rate (HICP, y-o-y)6.72.30.20.62.50.1..Net savings rate of households (net saving as percentage of net disposable income)0.61.72.34.15.1...Private credit flow, consolidated (% of GDP)7.76.06.14.33.7...Private sector debt, consolidated (% of GDP)48.566.784.292.195.3...of which household debt, consolidated (% of GDP)13.124.636.443.647.2...of which non-financial corporate debt, consolidated (% of GDP)35.442.147.848.548.0...Gross non-performing debt (% of total debt instruments and total loans and advances) (2)1.53.43.62.52.1...Corporations, net lending (+) or net borrowing (-) (% of GDP)-2.63.62.2-2.72.22.2-0.6-0.2Corporations, gross operating surplus (% of GDP)30.930.729.825.724.825.524.625.6Households, net lending (+) or net borrowing (-) (% of GDP)-0.10.71.02.02.61.60.30.2Deflated house price index (y-o-y).-3.63.86.27.2...Residential investment (% of GDP)3.03.03.03.33.94.0..Current account balance (% of GDP), balance of payments-7.2-3.7-1.0-3.40.4-2.0-3.7-3.4Trade balance (% of GDP), balance of payments-2.8-0.22.40.12.30.7..Terms of trade of goods and services (y-o-y)-0.7-1.2-0.4-0.3-0.4-0.8-1.50.1Capital account balance (% of GDP)0.21.31.40.70.81.4..Net international investment position (% of GDP)-47.2-61.6-65.8-65.9-65.7-61.9..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (1)0.3-10.0-14.0-14.1-14.8-14.8..IIP liabilities excluding non-defaultable instruments (% of GDP) (1)43.457.376.993.5103.6124.2..Export performance vs. advanced countries (% change over 5 years)83.915.93.5-0.38.6...Export market share, goods and services (y-o-y)7.7-2.21.2-2.23.70.2-1.73.0Net FDI flows (% of GDP)-5.7-2.0-0.7-2.32.10.3..General government balance (% of GDP)-2.7-5.4-2.2-1.3-5.5-6.2-3.6-2.6Structural budget balance (% of GDP)..-2.0-2.4-4.5-5.7-3.3-2.6General government gross debt (% of GDP)34.640.252.348.159.763.161.758.3forecast 
 
 
 
 
  
 
ANNEX 19: DEBT SUSTAINABILITY ANALYSIS 
ANNEX 19: DEBT SUSTAINABILITY ANALYSIS 

‘adverse interest-growth rate’ scenario assumes a 
in  the 
less  favourable  snowball  effect  than 
baseline.  In  the  ‘financial  stress’  scenario,  the 
country  temporarily  faces  higher  market  interest 
rates in 2022.  

Graph 2 shows the outcome of the stochastic 
projections.  These  projections  show  the  impact 
on  debt  of  2  000  different  shocks  affecting  the 
government’s 
economic 
growth,  interest  rates  and  exchange  rates.  The 
cone covers 80% of all the simulated debt paths, 
therefore excluding tail events. 

budgetary 

position, 

Table  2  shows  the  S1  and  S2  fiscal 
sustainability 
indicators  and  their  main 
drivers.  S1  measures  the  consolidation  effort 
needed to bring debt to 60% of GDP in 15 years. 
S2  measures  the  consolidation  effort  required  to 
stabilise  debt  over  an  infinite  horizon.  The  initial 
budgetary position measures the effort required to 
cover  future  interest  payments,  the  ageing  costs 
component  accounts  for  the  need  to  absorb  the 
projected 
public 
expenditure  such  as  pensions,  health  care  and 

in  ageing-related 

change 

This  annex  assesses  fiscal  sustainability 
risks  for  Slovakia  over  the  short,  medium 
and  long  term.  It  follows  the  same  multi-
dimensional  approach  as 
the  2021  Fiscal 
Sustainability  Report, updated  on the basis  of the 
Commission 2022 spring forecast. 

Table  1  presents 
the  baseline  debt 
projections.  It  shows  the  projected  government 
debt  and  its  breakdown  into  the  primary  balance, 
the  snowball  effect  (the  combined  impact  of 
interest payments and nominal GDP growth on the 
debt  dynamics)  and  the  stock-flow  adjustment. 
These projections assume that no new fiscal policy 
measures  are  taken  after  2023,  and  include  the 
expected  positive  impact  of  investments  under 
Next Generation EU.  

Graph  1  shows  four  alternative  scenarios 
around  the  baseline, to  illustrate the  impact 
of changes in assumptions. The ‘historical SPB’ 
scenario  assumes  that  the  structural  primary 
balance (SPB) gradually returns to its past average 
level.  In  the  ‘lower  SPB’  scenario,  the  SPB  is 
permanently  weaker  than  in  the  baseline.  The 

Table A19.1: Debt sustainability analysis for Slovakia 

Source: European Commission 

61 

Table 1. Baseline debt projections20192020202120222023202420252026202720282029203020312032Gross debt ratio (% of GDP)48.159.763.161.758.356.154.353.654.454.955.857.258.961.0Change in debt-1.511.63.3-1.4-3.4-2.2-1.7-0.80.80.51.01.31.72.0of whichPrimary deficit0.14.35.02.61.51.41.31.62.42.62.83.03.23.4Snowball effect-1.22.2-2.0-4.1-4.2-3.6-3.1-2.4-1.5-2.1-1.8-1.7-1.5-1.4Stock-flow adjustment-0.35.10.30.2-0.70.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)3.714.48.55.94.24.74.64.95.86.26.67.17.68.0S1S2Overall index (pps. of GDP)1.89.6of whichInitial budgetary position0.11.9Debt requirement-0.1Ageing costs1.87.8of whichPensions0.84.1Health care0.51.6Long-term care0.31.7Others0.20.4                                                                       Table 2. Breakdown of the S1 and S2 sustainability gap indicators253545556575852019202120232025202720292031BaselineHistorical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioGraph 1. Deterministic debt projections (% of GDP)p10-p20p20-p40p40-p60p60-p80p80-p902535455565758520192020202120222023202420252026Graph 2. Stochastic debt projections(% of GDP)MedianBaseline 
 
 
 
  
 
long-term  care,  and 
requirement 
measures  the  additional  adjustment  needed  to 
reach the 60% of GDP debt target. 

the  debt 

risk 

sustainability 

Finally,  the  heat  map  presents  the  overall 
classification 
fiscal 
(Table A19.2).  The  short-term  risk  category  is 
based  on  the  S0  indicator,  an  early-detection 
indicator of fiscal stress in the upcoming year. The 
medium-term  risk  category  is  derived  from  the 
debt  sustainability  analysis  (DSA)  and  the  S1 
indicator.  The  DSA  assesses  risks to  sustainability 
based  on  several  criteria: the  projected  debt level 
in 10 years’ time, the debt trajectory (‘peak year’), 
the plausibility of fiscal assumptions and room for 
tighter  positions  if  needed  (‘fiscal  consolidation 
space’),  the  probability  of  debt  not  stabilising  in 
the  next  5  years  and  the  size  of  uncertainty.  The 
long-term  risk  category  is  based  on  the  S2 
indicator and the DSA.  

short-term 

Overall, 
fiscal 
sustainability are low. The Commission’s early-
detection  indicator  (S0)  does  not  signal  major 
short-term fiscal risks (Table A19.2).  

risks 

to 

Medium-term  risks  to  fiscal  sustainability 
are high. On the one hand, the debt sustainability 
analysis  (DSA)  points  to  high  risk.  It  shows  that 
government debt is projected to remain close to its 
2022  level  (above  60%  of  GDP)  in  the  baseline 
(Table 1).  This  debt  path  is  sensitive  to  possible 
shocks  to  fiscal,  macroeconomic  and  financial 
variables,  as  illustrated  by  alternative  scenarios 
(pointing to medium and high risks) and stochastic 
simulations  (Tables  A19.1  and  A19.2).  Moreover, 
the  sustainability  gap  indicator  S1  signals  that  a 
consolidation  effort  of  1.8  pps.  of  GDP  would  be 
needed to reduce debt to 60% of GDP in 15 years’ 
time  (Table 2).  Overall,  the  high  risk  reflects  the 
sensitivity  to  adverse  shocks  and  the  projected 
increase  in  ageing  costs,  in  particular  from  public 
pensions. 

Long-term  risks  to  fiscal  sustainability  are 
high.  Over  the  long  term,  both  the  sustainability 
gap indicator S2 (at 9.6 pps. of GDP) and the DSA 
point to high risks. The S2 indicator suggests that, 
to  stabilise  debt  over  the  long  term,  it  will  be 
necessary 
to  address  budgetary  pressures 
stemming  from  population  ageing,  especially 
related  to  public  pension,  health  care  and  long-
term care expenditure (Table 2).  

62 

 
Table A19.2: Heat map of fiscal sustainability risks for Slovakia 

(1) Debt level in 2032: green: below 60% of GDP, yellow: between 60% and 90%, red: above 90%. (2) The debt peak year 
indicates whether debt is projected to increase overall over the next decade. Green: debt peaks early; yellow: peak towards the 
middle of the projection period; red: late peak. (3) Fiscal consolidation space measures the share of past fiscal positions in the 
country that were more stringent than the one assumed in the baseline. Green: high value, i.e. the assumed fiscal position is 
plausible by historical standards and leaves room for corrective measures if needed; yellow: intermediate; red: low. (4) Probability 
of the debt ratio exceeding in 2026 its 2021 level: green: low probability, yellow: intermediate, red: high (also reflecting the initial 
debt level). (5) The difference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 
2000 different shocks. Green, yellow and red cells indicate increasing uncertainty.  
Source: European Commission (for further details on the Commission’s multi-dimensional approach, see the 2021 Fiscal 
Sustainability Report). 

63 

BaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallMEDIUMHIGHMEDIUMHIGHMEDIUMLOWDebt level (2032), % GDP6165756561Debt peak year20212032203220322021Fiscal consolidation space38%44%54%38%38%Probability of debt ratio exceeding in 2026 its 2021 level19%Difference between 90th and 10th percentiles (pps. GDP)30HIGHHIGHDeterministic scenariosStochastic projectionsLOWHIGHMEDIUMHIGHShort termMedium termLong termOverall                               (S0)Overall     (S1+DSA)S1Debt sustainability analysis (DSA)S2Overall     (S2+DSA)Overall