Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Slovakia
Date: 2026-06-03
Institutions: European Commission, Reform and Investment Task Force
Subjects: Slovakia, budget policy, economic policy, economic recovery, economic reform, employment policy, investment, labour market, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 3.6.2026  COM(2026) 225 final  Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of Slovakia {SWD(2026) 225 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the economic, social, employment, structural and budgetary policies of Slovakia 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121(2) and Article 148(4) thereof, 

Having regard to Regulation (EU) 2024/1263 of the European Parliament and of the Council 
of  29 April 2024  on  the  effective  coordination  of  economic  policies  and  on  multilateral 
budgetary  surveillance  and  repealing  Council  Regulation  (EC)  No  1466/97  (1),  and  in 
particular Article 3(3) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16 November 2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances (2), and in particular Article 6(1) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

1 

2 

Regulation  (EU)  2024/1263  specifies  the  objectives  of  the  economic  governance 
framework,  which  aims  at  promoting  sound  and  sustainable  public  finances, 
sustainable  and  inclusive  growth  and  resilience  through  reforms  and  investments,  as 
well  as  preventing  excessive  government  deficits.  The  Regulation  stipulates  that  the 
Council  and  the  Commission  conduct  multilateral  surveillance  in  the  context  of  the 
European Semester in accordance with the objectives and requirements set out in the 
Treaty  on  the  Functioning  of  the  European  Union  (TFEU).  The  European  Semester 
includes, in  particular, the formulation and the surveillance of the implementation  of 
country-specific recommendations. 

Regulation 

Regulation  (EU)  2024/1263  of  the  European  Parliament  and  of  the  Council  of  29 April 2024  on  the 
effective  coordination  of  economic  policies  and  on  multilateral  budgetary  surveillance  and  repealing 
Council 
30.4.2024, 
1466/97 
ELI: http://data.europa.eu/eli/reg/2024/1263/oj). 
Regulation (EU) No 1176/2011 of the European Parliament and of the  Council of 16 November 2011 
imbalances  (OJ  L  306,  23.11.2011 
on 
ELI: http://data.europa.eu/eli/reg/2011/1176/oj). 

the  prevention  and  correction  of  macroeconomic 

2024/1263, 

(EC) 

(OJ 

No 

L, 

EN 

1 

  EN 

 
(2) 

(3) 

(4) 

(5) 

3 

4 
5 

On  16 July 2025,  the  Commission  adopted  its  proposal  for  a  regulation  establishing 
the European Fund for economic, social and territorial cohesion, agriculture and rural, 
fisheries and maritime, prosperity and security for the period 2028-2034 and amending 
Regulation (EU) 2023/955 and Regulation (EU, Euratom) 2024/2509 (3). The proposal 
aims to increase the effectiveness of Union funding by reducing the fragmentation of 
the  financial  architecture  and  to  support  Member  States  in  the  coordination  of  their 
economic policy in line with Article 175 (TFEU). 

On  25 November 2025,  the  Commission  adopted  an  opinion  on  the  2026  draft 
budgetary  plan  of  Slovakia.  On  the  same  date,  on  the  basis  of  Regulation  (EU)  No 
1176/2011,  the  Commission  adopted  the  2026  Alert  Mechanism  Report,  in  which  it 
identified Slovakia as one of the Member States for which an in-depth review would 
be  needed.  The  Commission  also  adopted  a  recommendation  for  a  Council 
recommendation  on  the  economic  policy  of  the  euro  area,  a  recommendation  for  a 
Council recommendation on human capital in the European Union, and a proposal for 
the  2026  Joint  Employment  Report,  which  analyses  the  implementation  of  the 
Employment  Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights. 
The Council adopted the Recommendation on the economic policy of the euro area (4) 
on  21 April 2026  and  the  Joint  Employment  Report,  and  the  Recommendation  on 
human capital on 9 March 2026.  

On  29 January 2025,  the  Commission  published  the  Competitiveness  Compass,  a 
strategic  framework  that  aims  to  boost  the  Union’s  global  competitiveness  over  the 
next  five  years.  It  identifies  the  three  transformational  imperatives  of  innovation, 
decarbonisation  and  competitiveness,  and  security  as  critical  pillars  for  sustainable 
economic  growth.  The  European  Semester  is  aligned  with  the  Competitiveness 
Compass,  ensuring  that  Member  States’  economic  policies  are  consistent  with  the 
Commission’s  strategic  objectives,  creating  a  unified  approach 
to  economic 
governance that fosters sustainable growth, innovation and resilience across the Union. 

In  2026,  the  European  Semester  for  economic  policy  coordination  continues  to 
develop  alongside  the  final  stage  of  the  Recovery  and  Resilience  Facility  (RRF) 
implementation (5). Recovery and resilience plans (RRPs), along with cohesion policy 
funding, have been essential for delivering on the policy priorities under the European 
Semester, as the plans were required to effectively address all or a significant subset of 
challenges identified in the relevant country-specific recommendations issued in recent 
cycles, and programmes funded by the European cohesion policy were required to take 
country-specific recommendations into account. As the RRF approaches the end of its 
lifetime,  it  remains  essential  to  sustain  the  reforms  and  investments  supported  and 
implemented  under  the  RRF,  in  particular  those  that  contribute  to  addressing 
challenges identified in the country-specific recommendations. 

Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  the  European 
Fund  for  economic,  social  and  territorial  cohesion,  agriculture  and  rural,  fisheries  and  maritime, 
prosperity  and  security  for  the  period  2028-2034  and  amending  Regulation  (EU)  2023/955  and 
Regulation (EU, Euratom) 2024/2509 - COM(2025) 565 final. The proposed Regulation is currently the 
subject of negotiations with the co-legislators. 
OJ C, C/2026/2434, 28.4.2026, ELI: http://data.europa.eu/eli/C/2026/2434/oj. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12 February 2021 
p.  17, 
the  Recovery 
establishing 
ELI: http://data.europa.eu/eli/reg/2021/241/oj). 

and  Resilience  Facility 

18.2.2021, 

(OJ  L 

57, 

EN 

2 

  EN 

 
(6) 

(7) 

(8) 

6  
7 

8 

On  3 June 2026,  the  Commission  published  the  2026  country  report  for  Slovakia.  It 
relevant  country-specific 
in  addressing 
assessed  Slovakia’s  progress 
recommendations  and  took  stock  of  Slovakia’s  implementation  of  the  RRP.  On  the 
basis  of  that  analysis,  the  country  report  identified  the  most  pressing  challenges 
Slovakia is facing. It also assessed Slovakia’s progress in implementing the European 
Pillar  of  Social  Rights  and  in  achieving  the  Union  headline  targets  on  employment, 
skills  and  poverty  reduction,  as  well  as  progress  in  achieving  the  United  Nations 
Sustainable Development Goals.  

the 

The  Commission  carried  out  an  in-depth  review  under  Article  5  of  Regulation  (EU) 
No 1176/2011 for Slovakia. The main findings of the Commission’s staff assessment 
of  macroeconomic  vulnerabilities  for  Slovakia  for  the  purposes  of  that  Regulation 
were published on 20 May 2026 (6). On 3 June 2026, the Commission concluded that 
Slovakia  is  experiencing  macroeconomic  imbalances.  In  particular,  Slovakia  faces 
vulnerabilities  related  to  the  external  and  government  balances,  competitiveness,  the 
housing  market,  and  household  debt  persist,  with  policy  action  remaining  limited. 
While the current account deficit narrowed in 2025 thanks to lower energy prices and 
stronger exports, it is expected to deteriorate in 2026 as the external context worsens. 
The  government  deficit  edged  down  in  2025  but  remains  large  and  weighing  on 
external balances; moreover, it is forecast to be largely unchanged in 2026 and to rise 
in 2027 assuming unchanged policies, pushing government debt higher. Inflation was 
well above the euro area in 2025, partly due to VAT rate increases, and core inflation 
is forecast to stay among the highest in the euro area in 2026. Fast-rising unit labour 
costs have further weakened competitiveness and are still expected to grow relatively 
fast in 2026. House prices surged in 2025 amid lower mortgage rates and are likely to 
keep  rising  briskly  due  to  constrained  supply.  Household  borrowing  grew  too  with 
lower  interest  rates  and  higher  incomes.  Policy  progress  has  been  limited.  Looking 
ahead,  effectively  addressing  key  issues  in  labour  taxation,  competitiveness,  housing 
supply, and fiscal policy would reduce vulnerabilities. 

On  21 January 2025,  the  Council,  upon  the  assessment  and  recommendation  of  the 
Commission, adopted a Recommendation endorsing the national medium-term fiscal-
structural  plan of Slovakia (7). The plan covers the period from  2025 until  2028 and 
presents  a  fiscal  adjustment  spread  over  four  years.  The  Council  recommended  the 
following  maximum  growth  rates  of  net  expenditure:  3.8%  in  2025,  0.9%  in  2026, 
1.6%  in  2027  and  1.5%  in  2028,  which  correspond  to  the  maximum  cumulative 
growth rates calculated by reference to the base year of 2023 of 10.3% in 2025, 11.2% 
in 2026, 13.0% in 2027 and 14.8% in 2028. For the years 2025-2028, these maximum 
growth rates of net expenditure coincide with the corrective path, as recommended by 
the Council under Article 126(7) TFEU on 21 January 2025, with a view to bringing 
an end to  the situation  of an excessive deficit  (8),  the excessive deficit procedure for 
Slovakia is held in abeyance. 

SWD(2026) 142 final. 
Council Recommendation of 21 January 2025 endorsing the national medium-term fiscal-structural plan 
of Slovakia (OJ C, C/2025/645, 10.2.2025, ELI: http://data.europa.eu/eli/C/2025/645/oj). 
Council  Recommendation  with  a  view  to  bringing  an  end  to  the  situation  of  an  excessive  deficit  in 
Slovakia,  adopted  on  21 January 2025.  All  documents  related  to  the  excessive  deficit  procedure  of 
Slovakia 
https://economy-finance.ec.europa.eu/economic-governance-
framework/stability-and-growth-pact/corrective-arm-excessive-deficit-procedure/excessive-deficit-
procedures-overview/slovakia_en. 

found 

can 

at: 

be 

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(9) 

Russia’s  war  of  aggression  against  Ukraine  and  its  repercussions  constitute  an 
existential  challenge  for  the  European  Union.  The  Commission  has  invited  Member 
States  to  request  the  activation  of  the  national  escape  clause  of  the  Stability  and 
Growth Pact in a coordinated manner to support the EU efforts to achieve a rapid and 
significant  increase  in  defence  spending  (9)  and  this  proposal  was  welcomed  by  the 
European Council of 6 March 2025. Following the request of Slovakia, on 8 July 2025 
the  Council,  upon  a 
the  Commission,  adopted  a 
Recommendation  allowing  Slovakia  to  deviate  from  the  recommended  maximum 
growth  rates  of  net  expenditure  (10).  The  period  when  the  national  escape  clause  is 
activated  (2025-2028)  allows  Slovakia  to  reprioritise  government  expenditure  or 
increase  government  revenue  so  that  lastingly  higher  defence  expenditure  would  not 
endanger fiscal sustainability in the medium term. 

recommendation 

from 

(10)  On  30 April 2026,  Slovakia  submitted  its  2026  Annual  Progress  Report  (11)  on 
adherence  to  the  recommended  maximum  growth  rates  of  net  expenditure  and  the 
implementation  of  reforms  and  investments  responding  to  the  main  challenges 
identified  in  the  European  Semester  country-specific  recommendations.  The  Annual 
Progress  Report  also  reflects  Slovakia’s  biannual  reporting  on  the  progress  made  in 
implementing  its  recovery  and  resilience  plan  in  accordance  with  Article  27  of 
Regulation (EU) 2021/241. 

(11)  Real  GDP  growth  in  2025  was  0.8%  and  HICP  inflation  stood  at  4.2%.  The 
Commission  Spring  2026  Forecast  projects  real  GDP  to  grow  by  0.8%  in  2026  and 
1.5% in 2027, and HICP inflation to stand at 4.3% in 2026 and 3.2% in 2027. 
(12)  Based  on  data  provided  by  Eurostat  (12),  Slovakia’s  general  government  deficit 
decreased from  5.3% of  GDP  in  2024 to 4.5% of GDP in  2025. The decrease in  the 
deficit  in  2025  mainly  reflects  the  consolidation  measures  and  lower-than-expected 
defence  investments,  owing  to  delays  in  the  delivery  of  certain  military  equipment. 
Based on policy measures known by the cut-off date of the forecast, the Commission 
Spring 2026 Forecast projects a deficit of 4.6% of GDP in 2026 and 5.4% of GDP in 
2027. The marginal increase in 2026 primarily stems from an increase in investment 
driven  by  the  postponed  delivery  of  military  equipment  from  the  previous  year.  The 
increase  of  the  deficit  in  2027  is  mainly  driven  by  expected  military  equipment 
deliveries. 

(13)  Based  on  the  Commission’s  estimates,  the  fiscal  stance  (13),  which  includes  both 
nationally  and  EU  financed  expenditure,  was  contractionary,  by  1.1%  of  GDP,  in 

9 

10 

11 

12 
13 

Communication  from  the  Commission,  'Accommodating  increased  defence  expenditure  within  the 
Stability and Growth Pact’, Brussels, 19.3.2025, C(2025) 2000 final. 
Council Recommendation of 8 July 2025 allowing Slovakia to deviate from the maximum growth rates 
of net expenditure as set by the Council under Regulation (EU) 2024/1263 (Activation of the national 
escape clause), (OJ C, C/2025/3974, 20.8.2025, ELI: http://data.europa.eu/eli/C/2025/3974/oj). 
The  2026  Annual  Progress  Reports  are  available  on:  https://economy-finance.ec.europa.eu/economic-
governance-framework/stability-and-growth-pact/preventive-arm/annual-progress-reports_en. 
Eurostat-Euro Indicators, 22.4.2026.  
The fiscal stance is defined as a measure of the annual change in the underlying budgetary position of 
the  general  government.  It  aims  to  assess  the  economic  impulse  stemming  from  fiscal  policies,  both 
those  that  are  nationally  financed  and  those  that  are  financed  by  the  EU  budget.  The  fiscal  stance  is 
measured as the difference between (i) the medium-term potential growth and (ii) the change in primary 
expenditure net of discretionary revenue measures and including expenditure financed by non-repayable 
support (grants) from the Recovery and Resilience Facility and other Union funds. 

EN 

4 

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2025. It is projected to be contractionary in both 2026 and 2027, by 0.5% and 1.1% of 
GDP, respectively. 

(14)  Based on data provided by Eurostat (14), Slovakia’s general government debt increased 
from  59.7%  of  GDP  at  the  end  of  2024  to  61.4%  of  GDP  at  the  end  of  2025.The 
increase in the debt ratio in 2025 mainly reflects the high government primary deficit. 
Additionally, the fact  that interest  expenditures  are growing  faster than the economy 
contributes to the increasing trend in debt dynamics. Based on policy measures known 
at the cut-off date of the forecast, the Commission Spring 2026 Forecast projects the 
debt-to-GDP ratio to increase to 63.7% by the end of 2026 and to further increase to 
66.9% by the end of 2027. The increase in 2026 and in 2027 mainly reflects the highly 
persistent government deficits. 

(15)  Based on Eurostat data (15), total general government defence expenditure in Slovakia 
amounted  to  2.0%  of  GDP  in  2025,  corresponding  to  an  increase  of  0.6  percentage 
points  of  GDP  compared  to  the  reference  year  2021.  According  to  the  Commission 
Spring 2026 Forecast, it is projected at the same level in 2026. This corresponds to an 
increase of 0.6 percentage points of GDP compared to the reference year 2021. 

(16)  The  Union  continues  to  face  risks  of  energy  supply  disruptions  and  elevated  price 
volatility,  exacerbated  by  geopolitical  tensions  which  affect  global  oil  and  gas 
markets.  Experience  from  the  2022–2023  energy  crisis  has  shown  that  broad  and 
untargeted  measures  entail  large  fiscal  costs  and  are  socially  and  economically 
inefficient.  Since  the  outbreak  of  the  war  in  the  Middle  East  in  February  2026, 
Slovakia  has  not  adopted  new  fiscal  policy  measures  to  mitigate  the  impact  of  high 
energy prices on households and firms (16). 

(17)  Based on the Commission’s calculations, net expenditure in Slovakia grew by 1.7% in 
2025:and 5.4% cumulatively over 2024 and 2025. The net expenditure growth in 2025 
is below the recommended maximum growth rate. When considering 2024 and 2025 
together,  the  cumulative  growth  rate  of  net  expenditure  is  also  below  the 
recommended maximum growth rate. 

(18)  Based  on  the  Commission’s  calculations,  net  expenditure  in  Slovakia  is  projected  to 
grow  by  2.9%  in  2026,  and  8.4%  cumulatively  over  2024,  2025  and  2026.  The 
projected  net  expenditure  growth  in  2026  is  above  the  recommended  maximum 
growth  rate,  corresponding  to  a  deviation  of  0.8%  of  GDP  in  annual  terms.  When 
considering 2024, 2025 and 2026 together, the projected cumulative growth rate of net 
expenditure is below the recommended maximum growth rate (17). 

(19)  Furthermore,  the  insufficient  implementation  of  existing  spending  reviews  in  the 
budgetary  process  limits  their  potential  for  savings,  which  could  otherwise  improve 
public finances. 

(20) 

In  2025,  the  tax  wedge  (the  taxation  of  earnings  from  labour)  in  Slovakia  remained 
above  the  EU  average  for  all  earnings  levels,  particularly  for  low-income  earners. 
Recent increases in mandatory social and health contributions have further raised the 
tax  wedge  for  this  group.  Revenues  from  recurrent  property  taxes  in  Slovakia 

14 
15 
16 
17 

Eurostat-Euro Indicators, 22.4.2026. 
Eurostat, government expenditure by classification of functions of government (COFOG). 
This reflects the situation at the cut-off date of the Commission’s Spring 2026 Forecast (4 May 2026). 
As  Slovakia  benefits  from  flexibility  under  the  national  escape  clause,  the  assessment  of  compliance 
focusses on the latter comparison. 

EN 

5 

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remained  low  and  below  the  EU  average,  largely  due  to  the  area-based  property 
taxation system, where immovable property is taxed by surface area rather than market 
value,  limiting  revenue  generation,  reducing  fairness  and  contributing  to  upward 
pressure  on  house  prices.  Revenues  from  environmental  taxation,  including  taxes  on 
transport,  pollution  and  natural  resource  use,  remain  consistently  below  the  EU 
average, indicating untapped potential to strengthen the ‘polluter pays’ principle.  

(21)  Over the past two years, corporate income taxes (CIT) have risen significantly, while 
the introduction of three CIT brackets in January 2025 has added further complexity. 
Both the effective tax rate and the statutory CIT rate for large companies exceed the 
EU average. The business environment is further hampered by a recent tax on payment 
services.  Meanwhile,  the  increase  in  the  standard  VAT  rate  from  20%  to  23%  has 
placed  an  additional  tax  burden  on  households,  while  two  reduced  VAT  rates, 
covering  many  goods  and  services,  complicate  the  system  and  increase  tax 
expenditures. Additionally, capital gains from property sales are tax-exempt after five 
years,  narrowing  the  tax  base  and  encouraging  long-term  housing  investments. 
Although  Slovakia’s  VAT  compliance  gap  has  improved,  it  remains  above  the  EU 
average  of  8.2%.  While  Slovakia  has  made  progress  in  digitalising  its  tax 
administration,  further  advancements,  particularly  in  electronic  invoicing  and  pre-
filled tax returns, could help reduce tax leaks, simplify compliance and lower costs. At 
the same time, PIT e-filing remains low and well below the EU average. 

(22)  The  social  welfare  system  has  expanded  gradually  in  recent  years,  becoming 
increasingly  costly.  Extensive  social  benefits,  such  as  the  permanent  13th  pension 
payment,  parental  bonuses  and  energy  subsidies,  are  not  effectively  targeted  at 
vulnerable groups, while energy measures, covering now 90% of households, continue 
to distort market price signals.  

(23)  Slovakia continues to face a severe housing shortage, maintaining the lowest housing 
stock per capita in the EU, with construction activity further weakening as only 7 241 
new  dwellings  were  started  in  the  first  half  of  2025.  This  downturn  aligns  with  a 
broader contraction in  residential  development,  as  building  permits, which peaked in 
2021,  have  since  then  declined  steadily  through  2024,  leaving  Slovakia’s  overall 
housing  stock  well  below  the  EU  average.  While  a  new  Building  Act  aimed  at 
streamlining permitting procedures has been adopted, its implementation is in its early 
stages,  and  the  effects  have  yet  to  materialise.  The  rental  sector  is  similarly 
underdeveloped, with the proportion of rental housing far below the EU average and 
showing no growth  over time. Census  data highlight a stark decline in  private rental 
dwellings,  which  fell  to  just  0.86%  in  2021.  Social  housing  is  also  significantly 
insufficient, representing only 2.5% of the total stock, one of the lowest shares in the 
EU.  These  systemic  shortages  disproportionately  affect  marginalised  communities, 
particularly  Roma  families,  86%  of  whom  live  in  overcrowded  conditions,  often  in 
segregated  settlements  lacking  basic  infrastructure  such  as  reliable  access  to  water. 
Precarious  housing  conditions  undermine 
in  education  and 
employment.  Moreover,  homelessness  in  Slovakia  has  risen  markedly  over  the  past 
decade.  Compounding  these  challenges,  housing  allowances  cover  only  a  minimal 
fraction of rental costs, failing to provide meaningful support for rental affordability. 

integration 

their 

(24)  The systematic, meaningful and timely involvement of local and regional authorities, 
social partners, civil society and other relevant stakeholders remains essential in order 

EN 

6 

  EN 

to  ensure broad ownership  for the successful  implementation  of the Union’s funding 
instruments, as well as in the context of the European Semester. 

(25)  The implementation  of cohesion  policy programmes, which encompass support from 
the  European  Regional  Development  Fund  (ERDF),  the  Just  Transition  Fund  (JTF), 
the  European  Social  Fund  Plus  (ESF+)  and  the  Cohesion  Fund  (CF)  in  Slovakia, 
remains  below  EU  average,  both  in  terms  of  project  selection  and  payments.  It  is 
important to step up and accelerate efforts to ensure the swift delivery of investments, 
while maximising their impact on the ground. Slovakia is already taking action under 
its  cohesion  policy  programmes  to  boost  competitiveness  and  growth.  However, 
Slovakia continues to face challenges in implementation in implementation, including 
those  relating  to  R&D  investment  and  innovation,  digitalisation,  nature  and 
biodiversity  protection  and  Roma  inclusion.  At  the  same  time,  Slovakia  needs  to 
accelerate implementation of the JTF as resources are due for disbursement by the end 
of 2026. It is essential to ensure that the new investments identified by Slovakia in its 
mid-term  review  of  the  cohesion  policy  funds,  notably  those  linked  to  the  five 
priorities identified in the Mid-Term Review Regulation (18), are deployed rapidly and 
effectively. 

(26)  Slovakia  faces  several  challenges  related  to  the  business  environment  and  public 
administration, digitalisation, research and innovation, the justice  and anti-corruption 
system, decarbonisation and the transformation of industry, the development of zero-
emission mobility, the labour market, education and healthcare.  

(27)  Slovakia’s  business  environment  continues  to  be  hampered  by  an  unpredictable 
regulatory  framework.  The  frequent  use  of  fast-track  legislative  procedures  and 
amendments initiated by members of the Parliament, often bypassing standard impact 
assessments  and  stakeholder  consultations,  contribute  to  regulatory  instability. 
Although  a  better  regulation  framework  is  formally  in  place,  it  is  applied 
inconsistently  and  largely  in  a  formalistic  manner,  limiting  its  effectiveness  in 
improving  the  quality  and  predictability  of  legislation.  As  a  result,  stakeholder 
consultations and impact assessments are not adequately integrated into the legislative 
process,  and  recent  measures,  including  those  under  the  RRP,  have  delivered  only 
marginal  improvements.  At  the  same  time,  administrative  burden  remains  high,  with 
complex  procedures  and  compliance  requirements  continuing  to  hamper  business 
activity. Finally, regulatory and administrative barriers to the Single Market remain in 
Slovakia,  affecting  the  cross-border  provision  of  services  and  the  freedom  of 
establishment, notably through fragmented driving bans and restrictive retail rules. 

(28)  The fragmentation of local governance structures continues to undermine the provision 
of quality public services. A large number of small municipalities, often with limited 
administrative  capacity  and  insufficient  funding  relative  to  their  responsibilities, 
constrains effective investment planning and the absorption of EU funds. While some 
progress  has  been  made  in  improving  strategic  coordination  at  central  level  and 
pooling  administrative capacities at  local  level  through the piloting  of shared service 
centres, intermunicipal cooperation remains limited and a comprehensive reform of the 
local governance has not yet been initiated.  

18 

Regulation  (EU)  2025/1914  of  the  European  Parliament  and  of  the  Council  of  18 September 2025 
amending  Regulations  (EU)  2021/1058  and  (EU)  2021/1056  as  regards  specific  measures  to  address 
strategic challenges in the context of the mid-term review. 

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(29)  Transparency  and  competition  in  public  procurement  have  been  weakened  by  recent 
legislative changes. The increase in thresholds for publication and the simplification of 
procedures  have  reduced  administrative  burden  but  also  raised  risks  for  competition 
and transparency, particularly  for below-threshold contracts.  Procurement procedures 
remain  lengthy,  and  the  use  of  lowest-price  award  criteria  continues  to  dominate, 
limiting  the  uptake  of  quality-related  and  life-cycle  cost  considerations.  Ensuring 
effective  oversight  and  reinforcing  the  role  of  competent  authorities  in  safeguarding 
competition and transparency are essential to improve public spending efficiency and 
support good governance. 

(30)  Concerns  over  the  judicial  system  and  anti-corruption  framework  persist,  while  the 
capacity  to  detect,  investigate  and  prosecute  high-level  corruption  has  further 
deteriorated.  The  perception  and  reported  experience  of  corruption  when  doing 
business in Slovakia remains very high. The risks identified in 2024 and 2025 due to 
the dismantling of specialised anti-corruption agencies (the Special Prosecution Office 
and the National Crime Agency) and the reform of the criminal law, which shortened 
the limitation periods and reduced the sentences for corruption criminal offences, have 
continued  to  materialise.  This  is  combined  with  the  exercise  of  power  by  the 
Prosecutor  General 
the 
law enforcement  authorities  in  the  pre-trial  stage.  Following  the  reorganisation  of 
police and prosecution, the numbers of corruption cases detected and prosecuted saw a 
sharp  decline.  Several  high-profile  corruption  cases  were  dropped  due  to  reduced 
sanction levels for corruption offences and a shortened period for bringing offenders to 
justice.  In  December  2025,  the  attempt  to  dismantle  the  Whistleblower  Protection 
Office  raised  additional  concerns  over  the  anti-corruption  framework  and  potential 
whistleblowers  being  afraid  to  come  forward  with  information  on  high-level 
corruption. Overall, these developments have further highlighted the lack of a robust 
anti-corruption  framework,  which  is  currently  conducive  to  undue  interference. 
Significant  efforts  are  necessary  to  address  identified  deficiencies  as  regards 
insufficient specialisation of the competent authorities.  

to  annul  final  decisions  of 

lower  prosecutors  and 

(31) 

In  the  justice  system,  the  reform  of  the  judicial  map  was  put  in  place  and  is  under 
evaluation.  However,  concerns  remain  regarding  the  still  insufficient  safeguards  for 
the  independence  of  the  judiciary,  notably  concerning  the  members  of  the  Judicial 
Council  whose  powers  were  further  increased  for  instance  in  the  disciplinary 
procedures.  These  developments  pose  direct  risks  to  Slovakia’s  business  and 
regulatory environment. 

(32)  Slovakia  has  progressed  in  digital  infrastructure  in  both  urban  and  rural  areas,  with 
private  telecom  operators  investing  in  gigabit  and  5G  networks.  Still,  the  relatively 
poor  coverage  in  rural  areas,  with  limited  public  spending,  requires  further  efforts. 
Legislative  measures  introduced  in  2025,  including  the  Construction  Law  and  the 
Gigabit Infrastructure Act, are expected to support the rollout of digital infrastructure, 
but  some  regulatory  challenges  persist.  The  slow  adoption  of  digital  technologies  in 
Slovakia continues to hinder competitiveness and growth, with only  57% of small to 
medium-sized  enterprises  (SMEs)  reaching  at  least  basic  digital  intensity  in  2025, 
compared to the EU average of 71%. The lack of sufficient digital skills and upskilling 
opportunities  among  employees  and  difficulties  in  attracting  ICT  specialists  poses 
significant  challenges 
for  businesses.  Despite a  number  of ongoing  efforts, 
fragmentation,  a  lack  of  focus  on  user  experience  and  slow  e-government  delivery 
weaken  reform  credibility,  highlighting  the  need  for  improved  data  governance, 
interoperability and further integration of eGovernment services. 

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(33)  Slovakia, classified as an ‘emerging innovator’ in 2025, registered a growing disparity 
between  its  performance  and  the  EU  average.  Public  sector  spending  on  R&D 
decreased from 0.45% in 2023 to 0.39% in 2024, significantly below the EU average. 
In 2023, the government committed to maintaining a trajectory of annual increases in 
public  R&D  spending,  which  should  reach  0.67%  of  GDP  by  2030.  This  trajectory 
needs  to  be  maintained  to  improve  Slovakia’s  competitiveness,  complemented  by  a 
further stimulation of private R&D investment, which remains critically low.  

(34)  The  Slovak  R&I  environment  remains  fragmented,  and  limited  progress  has  been 
made in  improving collaboration between business  and the  research sector. The R&I 
ecosystem  lacks  predictability  due  to  an  underdeveloped  institutional  framework 
without  clearly  assigned  responsibilities.  Promoting  practices  developed  under  the 
RRP  linked  to  conducting  international  evaluations  for  the  award  of  grants  and  for 
knowledge  transfers  will  be  key  to  contribute  to  the  quality  of  research  outputs  and 
increase  their  likelihood  of  successful  commercialisation.  To  further  incentivise 
collaboration among businesses and academia and in particular technology transfer, it 
would be beneficial for Slovakia to follow international best practice on ownership of 
intellectual property rights generated at universities. 

(35)  Opportunities  for  SMEs  to  invest  in  R&D  are  limited,  as  the  current  R&D  tax 
incentive  scheme  is  biased  towards  larger  companies.  Improving  R&D  incentive 
schemes  and  gearing  R&D  policies  more  towards  SMEs  could  foster  Slovakia’s 
growth potential. 

(36)  Slovakia’s  economy,  including  its  large  and  energy-intensive  industrial  sector, 
continues to face competitiveness challenges amid modernisation efforts and meeting 
climate objectives. The industry remains a large sector in terms of energy consumption 
and  carbon  intensity,  though  both  have  decreased  in  recent  years  due  to  efficiency 
gains and structural shifts. High energy prices continue to pose a significant challenge 
for  businesses,  reflecting  structural  issues.  To  achieve  a  cost-effective  transition  to 
decarbonisation  while  maintaining  industrial  competitiveness,  Slovakia  needs  to 
continue  investing  in  energy  efficiency  and  advance  the  electrification  of  industrial 
processes. This could also be incentivised through measures improving the electricity-
to-natural gas price ratio. The potential of domestic manufacturing in the production of 
net-zero  production  technologies  remains  underutilised.  The  integration  of  emerging 
industrial sectors into EU value chains and advancing towards more innovation-driven 
products remain a key opportunity for the Slovak economy. 

(37)  Despite  Slovakia’s  effort  in  diversifying  natural  gas  supply  and  reducing  demand, 
dependence  on  Russian  fossil  fuels  remains  significant,  exposing  the  country  to 
external  risks.  In  2025,  more  than  50%  of  natural  gas  and  over  80%  of  oil  was  of 
Russian origin. The share of renewables in Slovakia’s electricity mix hovered amongst 
the  lowest  in  the  EU  in  2025,  while  the  country’s  wind  energy  potential  remains 
untapped.  Slovakia’s  decarbonisation  relies  predominantly  on  nuclear  power, 
following  the  phase-out  of  coal  in  2023.  Average  electricity  prices  continue  to  be 
significantly  influenced  by  expensive  natural  gas.  Reducing  its  share  in  electricity 
generation  would  help  stabilise  Slovakia’s  electricity  system,  delivering  more 
affordable  prices  of  electricity  and  supporting  competitiveness.  Slovakia  has  taken 
steps  to  accelerate  renewable  energy  deployment  and  improve  the  legislative 
framework  as  part  of  its  RRP,  but  the  roll-out  of  renewable  energy  sources  remains 
very slow.  The lack of long-term  certainty for renewable  energy investors remains a 
key structural  obstacle  for the development  of new projects.  In particular, expanding 

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the  use  of  power  auctions  and  scaling  up  long-term  contracts  would  support  the 
development  of  larger  renewable  projects,  while  opening  new  decarbonisation 
solutions for energy-intensive industries.  

(38)  To accommodate the increased needs for electrification of the industry and sustainable 
mobility,  further  efforts  are  needed  to  accelerate  the  new  grid  investments  and 
increasing  its  capacity.  Advancing  the  decarbonisation  of  the  heating  and  cooling 
sector  through  a  greater  use  of  renewable  solutions  would  help  achieve  climate 
objectives  and  contribute  to  more  affordable  energy  prices.  In  addition  to  advancing 
electrification,  the  transition  of  heating  to  a  low-carbon  economy  could  be 
strengthened by expanding geothermal solutions, as Slovakia benefits from favourable 
geological conditions in some locations. 

(39)  The  very  low  penetration  of  zero-emission  mobility  in  Slovakia  limits  the  domestic 
competitiveness of the country’s large automotive industry. This is exemplified by one 
of  the  lowest  percentages  for  new  registrations  of  zero-emission  vehicles  in  the  EU, 
but also by the lagging roll-out of zero-emission charging and refuelling infrastructure. 
Although Slovakia has adopted some reforms under the RRP, incentives to support the 
roll-out  of  zero-emission  vehicles  and  infrastructure  have  not  yet  materialised.  The 
roll-out of incentives outlined in the electromobility action plan is crucial to allow the 
private  sector  to  make  significant  further  investments.  Similarly,  Slovak  railway 
transport infrastructure is only being slowly modernised, limiting its attractiveness for 
both  passenger  and  commercial  use.  Furthermore,  Slovakia  lacks  a  centralised 
approach  for  long-term  funding  for  construction  and  renovations  of  the  national 
transport infrastructure. This could be improved through fixed and predictable national 
budgetary contributions to development and maintained of transport infrastructure, to 
be  used  alongside  European  and  public-private  financing.  Moreover,  the  pre-
investment  phases  in  transport  infrastructure  need  to  be  streamlined  further  to 
accelerate infrastructure  development  and upkeep. Additionally,  the lack of adequate 
transport  options  in  Slovakia,  in  particular  in  rural  areas,  often  limits  mobility  and 
access  to  essential services for affected low-income households.  In particular, public 
transport connectivity is lagging, as well as the deployment of active mobility options, 
on-demand transport measures, and social taxis for low-income households in the most 
affected regions, such as in central and eastern Slovakia. 

(40)  While  Slovakia’s  climate  adaptation  plan  is  in  place,  the  implementation  of  climate 
resilience  policies  is  lagging  behind  due  to  a  lack  of  institutional  preparedness,  low 
awareness  at  regional  and  local  level  and  inadequate  degree  of  interministerial 
cooperation. Water quality and water management continue to deteriorate, also due to 
hydro-morphological  alternations  and  pesticide  contamination, 
the 
productivity of industry and agriculture, and human health. While some progress has 
been  made  on  recycling  of  packaging  waste,  Slovakia  continues  to  be  at  risk  of 
missing the municipal waste and packaging waste targets, as well as its 2035 target on 
landfilled municipal waste. The productivity of agriculture, forestry and water-related 
industries is also affected by the degrading nature of ecosystems, with major economic 
impacts.  This  is  caused  mostly  by  pressures  such  as  unsustainable  forestry  and 
agriculture, infrastructure development and invasive species.  

impacting 

(41) 

In light of the crucial role of human capital in enhancing the Union’s competitiveness 
and  strategic  autonomy,  in  2026  the  Council  recommended  that  Member  States  take 
action  to  urgently  address  human  capital-related  structural  challenges  in  the  areas  of 

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skills  and  education,  which  hamper  competitiveness.  The  2026  country-specific 
recommendations  addressed  to  Slovakia  can  contribute  to  the  implementation  of  the 
Council Recommendation on human capital in the Union. 

(42)  The  high  long-term  unemployment  of  underrepresented  groups,  particularly  Roma, 
low-skilled and older workers, remains a challenge, deepening skills gaps and regional 
disparities. However, while the situation is worse in the eastern regions of the country, 
investments  in  policies  to  help  vulnerable  groups  of  people  find  or  maintain 
employment  remain  low.  Participation  in  the  job  market,  especially  for  women,  is 
hindered  by  the  insufficient  availability  and  use  of  affordable  high-quality  early 
childhood  education  and  care  services,  particularly  for  children  under  the  age  of  3, 
with  disparities  affecting  disadvantaged  groups.  Also,  flexible  work  arrangements, 
such as part-time and tele-working opportunities, remain very limited.  

(43)  Slovakia  faces  persistent  challenges  in  its  education  and  skills  system,  constraining 
long-term  growth  and  labour  market  outcomes.  Limited  progress  has  been  made  in 
strengthening  basic  skills,  especially  among  disadvantaged  learners,  including  in 
marginalised Roma communities. A high  share of pupils lacks minimum proficiency 
in core subjects, with outcomes below the EU average. Absenteeism and early school 
leaving, notably in rural areas, further weaken educational outcomes. Despite ongoing 
reforms,  access  to  support measures  remains insufficient,  particularly for pupils with 
special educational needs, hindering equal and inclusive access to quality education.  

(44)  Significant  skills  shortages  persist,  affecting  over  half  of  enterprises,  and  reflect  a 
mismatch between workforce skills and labour market needs. While some progress has 
been made in adult learning, participation remains low, especially among low-skilled 
workers.  Participation  in  work-based  learning  remains  below  the  EU  average,  and 
basic digital skills gaps and low female participation in STEM persist. Further efforts 
are needed to  scale up reskilling and upskilling, strengthen teacher training, improve 
the implementation of curricular reforms, and increase enrolment in STEM fields. At 
the  same  time,  low  tertiary  attainment,  high  student  outflows  and  weak  return  rates, 
particularly in high-demand sectors, weigh on the availability of skilled labour. In this 
context,  the  integration  of  third-country  nationals  into  the  labour  market  remains 
limited  and  fragmented,  with  a  lack  of  a  comprehensive  framework  supporting  their 
long-term inclusion. Strengthening the retention and attraction of skilled professionals 
would help address labour shortages and support economic competitiveness. 

(45)  The resilience of Slovakia’s healthcare system remains under significant strain due to 
a  shortage  and  ageing  of  healthcare  professionals.  Staffing  levels  are  below  the  EU 
average,  with  general  practitioners  facing  a  21%  shortfall  and  nearly  a  quarter  of 
nurses  nearing  retirement.  Despite  recent  salary  increases  for  some  medical  staff, 
retention  challenges  endure,  fuelled  by  poor  working  conditions,  low  interest  in 
primary  care  careers,  and  outward  migration.  Efforts  to  address  workforce  and 
infrastructure  gaps  remain  inadequate,  with  preventive  care  receiving  just  2.7%  of 
health spending in 2023 — far below the EU average. Despite RRP-funded clinics and 
screening  expansions,  these  measures  have  yet  to  significantly  improve  access  or 
equity. Persistent debt and long payment delays in major state hospitals reflect system 
inefficiency,  compounded  by  high  out-of-pocket  costs.  The  RRP  has  contributed  to 
some  improvements  in  the  coordination  of  healthcare  services.  However,  further 
efforts  are  needed  to  strengthen  primary  care  and  preventive  care,  especially  for 

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vulnerable people, secure the supply of critical medical products and ensure long-term 
fiscal sustainability. 

(46)  Long-term  care  services  continue  to  be  underfunded  and  remain  rather  limited, 
especially for vulnerable groups. Due to the ageing population, public expenditure on 
long-term care is projected to rise in the medium and long term. Workforce shortages 
and  regional  disparities  constrain  service  provision,  particularly  in  rural  areas  and 
eastern regions of Slovakia. Despite some initial reforms and investments introduced 
under the RRP, access to affordable, and quality long-term care remains uneven across 
regions and community-based services are still insufficiently developed. 

(47) 

(48) 

In view of the close interlinkages between the economies of euro-area Member States 
and  their  collective  contribution  to  the  functioning  of  the  economic  and  monetary 
union,  in  2026  the  Council  recommended  that  the  euro-area  Member  States  take 
action, including through their RRPs, to implement the 2026 Recommendation on the 
economic  policy  of  the  euro  area.  For  Slovakia,  the  recommendation  (1)  helps 
implement  the  first,  the second,  the  third  and  the  fifth  recommendations  on  the  euro 
area,  recommendation  (2)  helps  implement  the  fourth  recommendation  on  the  euro 
area, recommendation (3) helps implement the eighth and the ninth recommendations 
on  the  euro  area,  recommendation  (4)  and  (5)  help  implement  the  seventh 
recommendation  on  the  euro  area  and  the  recommendation  (6)  helps  implement  the 
fifth recommendation on the euro area. 

In  light  of  the  Commission’s  in-depth  review  and  conclusions  on  the  existence  of  
imbalances,  recommendations under Article 6 of Regulation  (EU) No 1176/2011  are 
reflected  in  recommendations  (1),  (2),  (3)  and  (5).  Policies  referred  to  in 
recommendation  (1)  help  to  address  vulnerabilities  linked  to  housing  market  and 
household  debt.  Policies  referred  to  in  recommendations  (1),  (2)  and  (5)  help  to 
address vulnerabilities linked to external and government balances. Policies referred to 
in  recommendations  (1),  (3)  and  (5)  help  to  address  vulnerabilities  linked  to 
competitiveness. Recommendations (1), (2), (3) and (5) contribute to both addressing 
imbalances  and  implementing  the  2026  Recommendation  on  the  economic  policy  of 
the euro area, in line with recital 47. 

HEREBY RECOMMENDS that Slovakia take action in 2026 and 2027 to:  

1. 

Continue adhering to the maximum growth rates of net expenditure recommended by 
the Council on 21 January 2025, with a view to bringing an end to the situation of an 
excessive deficit, while making use of the flexibility under the national escape clause 
for  higher  defence  expenditure.  Reinforce  defence  spending  and  readiness  while 
ensuring  spending  efficiency  and  gradually  adapting  the  budget  to  sustain 
structurally higher defence spending. Ensure that any measures taken to mitigate the 
impact of the hike in energy prices are temporary, targeted at protecting vulnerable 
households or at addressing the needs of energy-intensive firms, preserve incentives 
for  energy  savings  while  ensuring  that  their  fiscal  cost  is  compatible  with  the 
commitments  under  the  EU  fiscal  framework.  Make  the  tax  mix  more  efficient, 
including by reducing disincentives in the labour market, and making stronger use of 
environmental  and  recurrent  property  taxation.  Simplify  the  taxation  system  and 
improve  spending  efficiency,  including  by  aligning  spending  reviews  with  the 
budgetary  process.  Continue  to  strengthen  tax  compliance,  including  by  further 
digitalising the tax administration.  Preserve  price  incentives for  energy savings and 
better target social spending. Speed up construction by streamlining spatial planning 

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2. 

3. 

4. 

5. 

and permitting procedures, expand the private rental market, and promote affordable 
and social housing. 

Ensure continuity of reforms and investments implemented under the Recovery and 
Resilience  Facility.  Accelerate  efforts  to  implement  cohesion  policy  programmes 
building, where appropriate, on the reallocation to strategic priorities and flexibilities 
in the mid-term review of the cohesion policy framework.  

Improve  the  business  environment  by  creating  a  more  predictable  regulatory 
framework,  and ensuring that impact  assessments and stakeholder consultations are 
integrated into the legislative process. Tackle remaining barriers to service provision. 
Address the fragmentation of governance structures, including by preparing a reform 
of  the  local  governance.  Improve  provision  and  user  experience  of  eGovernment 
services.  Ensure  transparency  and  competition  in  public  procurement  processes. 
Strengthen  the  judicial  system,  including  its  independence,  and  improve  the 
effectiveness  of  the  anti-corruption  framework,  including  by  ensuring  adequate, 
autonomous  and  effective  detection,  investigation  and  prosecution  of  high-level 
corruption cases and sufficient, specialised capacity at police and prosecution level. 

Continue to expand gigabit connectivity, in particular in underserved areas. Increase 
the  adoption  of  digital  technologies,  particularly  among  SMEs,  by  removing 
bottlenecks  in  their  roll-out.  Improve  research  and  innovation  policy  by  continuing 
increases to public R&D investment, streamlining the R&I governance, funding and 
evaluation  systems,  incentivising  collaboration  between  business  and  the  research 
sector, and by revising the R&D tax incentive scheme to provide greater support to 
SMEs. 

Promote  investments  to  advance  industrial  competitiveness,  including  through 
incentivising  decarbonisation  and  electrification,  and  economic  diversification. 
Accelerate the diversification of energy supply to phase out dependence on Russian 
sources. Accelerate the roll-out of renewables, in particular wind energy,  and make 
the procedures for connecting to the grid more efficient. Support further investments 
in grids, in particular electricity networks, and in the decarbonisation of the heating 
sector.  Support  further  roll-out  of  zero-emission  mobility,  reform  the  transport 
investment  management  and  modernise  the  state  of  the  rail  network.  Strengthen 
resource  waste  management  and  reuse  of  municipal  and  packaging  waste,  the 
conservation  of  natural  resources,  and  increase  climate  and  water  resilience, 
including  by  mainstreaming  nature-based  solutions  and  finalising  the  zonation  of 
nature-protected areas. 

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6. 

Strengthen  the  labour  market  participation  of  underrepresented  groups,  particularly 
in regions with high unemployment, and introduce more flexible work arrangements. 
Increase  the  availability  of  affordable  high-quality  early  childhood  education  and 
care  for  children  under  the  age  of  3.  Ensure  equal  and  inclusive  access  to  quality 
education at all levels, with a focus on teaching of basic skills, including for children 
from  disadvantaged  backgrounds.  Scale  up  adult  reskilling  and  upskilling 
opportunities,  including  by  investing  in  digital  skills  and  teacher  training  and 
increasing  enrolment  in  STEM  education  programmes.  Enhance  the  retention  and 
attraction  of  skilled  professionals  to  address  workforce  shortages.  Improve  primary 
care provision and expand preventive healthcare measures. Strengthen the resilience 
and  fiscal  sustainability  of  the  health  and  long-term  care  systems  and  ensure 
affordable and quality long-term care. 

Done at Brussels, 

For the Council 
The President 

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