Economic Sustainability
#26Key Findings
Slovakia performs relatively poorly (rank 25) in the category of economic sustainability.
The country lags behind both EU and global averages in circular economy practices, with only 5% of secondary materials reintroduced into the economy. A national infrastructure protection program has been established. Decarbonization targets are ambitious, but the country lags in passing enabling legislation and necessary regulations.
Slovakia spends less on active labor market policies than most EU countries, and some labor measures are less effective than in other EU countries. Long-term unemployment among marginalized groups, especially the Roma, is a persistent concern. Universal social protection is provided for all workers.
Taxes and especially social contributions make up a relatively high share of GDP. The tax system does not effectively internalize negative externalities, with the need for CO2 pricing seen as particularly urgent. Governments and parliaments have resorted to populist deficit spending particularly in the run-up to elections.
The country lags behind both EU and global averages in circular economy practices, with only 5% of secondary materials reintroduced into the economy. A national infrastructure protection program has been established. Decarbonization targets are ambitious, but the country lags in passing enabling legislation and necessary regulations.
Slovakia spends less on active labor market policies than most EU countries, and some labor measures are less effective than in other EU countries. Long-term unemployment among marginalized groups, especially the Roma, is a persistent concern. Universal social protection is provided for all workers.
Taxes and especially social contributions make up a relatively high share of GDP. The tax system does not effectively internalize negative externalities, with the need for CO2 pricing seen as particularly urgent. Governments and parliaments have resorted to populist deficit spending particularly in the run-up to elections.
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How committed is the government to driving the transition toward a circular economy?
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The government is clearly committed to transitioning to a circular economy.
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The government is largely committed to transitioning to a circular economy.
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The government is somewhat committed to transitioning to a circular economy.
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1
The government is not at all committed to transitioning to a circular economy.
The Slovak Republic lags behind both EU and global averages in circular economy (CE) practices, with only 5% of secondary materials reintroduced into the economy. Key weaknesses include low public and private research support and an inconsistent institutional framework for eco-innovations (FinReport, 2023).
The Ministry of Environment has identified CE as a priority in its Envirostrategy 2030, dedicating a chapter titled “A Greener Slovakia.” Initially, key stakeholders began responding to global developments and assessing progress toward CE.
The government follows indicators set by the European Commission, but the most recent evaluation report (2021) still relied on OECD indicators. According to the OECD (2022), current CE policies in Slovakia are relatively advanced in waste management. However, there remains a significant implementation gap.
The Circular Slovakia Initiative, which emphasizes the need for environmental action and a climate crisis response, has become an association of legal entities. One of its founding partners is the Ministry of the Environment, and it brings together private, public, and nonprofit sectors. The Ministry of Economy and the Ministry of the Environment are responsible for CE, with the main unit being the CE Section at the Ministry of Economy. However, a determined and well-coordinated approach to CE development is lacking, as governance and implementation of CE initiatives are relatively weak in Slovakia (Beckmann et al., 2021: 23).
A framework for transitioning to a CE exists within Envirostrategy 2030, outlining clear goals that include cooperation among ministries, the private sector, and municipalities. Key challenges for Slovakia include reusing, recycling, waste reduction, and fostering eco-innovations (Liebscherová & Tóthová, 2019). A national strategic document is under preparation. According to the OECD (2022), a national CE roadmap is essential to guide the direction of change and identify key areas for focus. Despite positive trends, future materials consumption in Slovakia will increase by more than 50% by 2050 compared to 2017 if no additional policy measures are introduced. The Slovak CE roadmap should emphasize using economic instruments to promote sustainable consumption and production, focusing on the construction sector and food and bio-waste value chains as areas with substantial potential for resource efficiency and circularity (OECD, 2022).
The Third National Action Plan, adopted in 2016, focuses on green public procurement. However, its effectiveness remains influenced by the “price” criterion. By 2030, green public procurement should constitute at least 70% of the total value of public procurement in Slovakia. Additionally, supermarkets will be prohibited from disposing of food waste (European Court of Auditors, 2023).
Citations:
FinReport. 2023. “Slovensko zaostáva v budovaní cirkulárnej ekonomiky aj v ekoinvestíciách.” https://www.finreport.sk/ekonomika/slovensko-zaostava-v-budovani-cirkularnej-ekonomiky-aj-v-ekoinvesticiach/
https://www.minzp.sk/files/iep/publikacia_zelensie-slovensko-aj_web.pdf
Liebscherová, K., and A. Tóthová. 2019. “Circular Economy According to the 2030 Environmental Strategy.” https://www.odpady-portal.sk/Dokument/104725/obehove-hospodarstvo-podla-envirostrategie-2030.aspx
European Court of Auditors. 2023. “SK – Circular Economy Slow Transition of Member States Despite EU Measure.” https://www.eca.europa.eu/ECAPublications/SR-2023-17/SR-2023-17_SK.pdf
OECD. 2022. Closing the Loop in the Slovak Republic: A Roadmap towards Circularity for Competitiveness, Eco-innovation and Sustainability. https://www.oecd.org/environment/waste/highlights-closing-the-loop-in-the-slovak-republic-roadmap_EN.pdf
Beckmann, A., Sivarajah, U., and Irani, Z. 2021. “Circular Economy Versus Planetary Limits: A Slovak Forestry Sector Case Study.” Journal of Enterprise Information Management 34 (6): 1673-1698. http://hdl.handle.net/10454/18293
Ministry of Environment of the Slovak Republic. 2019. “Greener Slovakia – Strategy of the Environmental Policy of the Slovak Republic Until 2030.” https://www.minzp.sk/files/iep/greener-slovakia-2030.pdf
The Ministry of Environment has identified CE as a priority in its Envirostrategy 2030, dedicating a chapter titled “A Greener Slovakia.” Initially, key stakeholders began responding to global developments and assessing progress toward CE.
The government follows indicators set by the European Commission, but the most recent evaluation report (2021) still relied on OECD indicators. According to the OECD (2022), current CE policies in Slovakia are relatively advanced in waste management. However, there remains a significant implementation gap.
The Circular Slovakia Initiative, which emphasizes the need for environmental action and a climate crisis response, has become an association of legal entities. One of its founding partners is the Ministry of the Environment, and it brings together private, public, and nonprofit sectors. The Ministry of Economy and the Ministry of the Environment are responsible for CE, with the main unit being the CE Section at the Ministry of Economy. However, a determined and well-coordinated approach to CE development is lacking, as governance and implementation of CE initiatives are relatively weak in Slovakia (Beckmann et al., 2021: 23).
A framework for transitioning to a CE exists within Envirostrategy 2030, outlining clear goals that include cooperation among ministries, the private sector, and municipalities. Key challenges for Slovakia include reusing, recycling, waste reduction, and fostering eco-innovations (Liebscherová & Tóthová, 2019). A national strategic document is under preparation. According to the OECD (2022), a national CE roadmap is essential to guide the direction of change and identify key areas for focus. Despite positive trends, future materials consumption in Slovakia will increase by more than 50% by 2050 compared to 2017 if no additional policy measures are introduced. The Slovak CE roadmap should emphasize using economic instruments to promote sustainable consumption and production, focusing on the construction sector and food and bio-waste value chains as areas with substantial potential for resource efficiency and circularity (OECD, 2022).
The Third National Action Plan, adopted in 2016, focuses on green public procurement. However, its effectiveness remains influenced by the “price” criterion. By 2030, green public procurement should constitute at least 70% of the total value of public procurement in Slovakia. Additionally, supermarkets will be prohibited from disposing of food waste (European Court of Auditors, 2023).
Citations:
FinReport. 2023. “Slovensko zaostáva v budovaní cirkulárnej ekonomiky aj v ekoinvestíciách.” https://www.finreport.sk/ekonomika/slovensko-zaostava-v-budovani-cirkularnej-ekonomiky-aj-v-ekoinvesticiach/
https://www.minzp.sk/files/iep/publikacia_zelensie-slovensko-aj_web.pdf
Liebscherová, K., and A. Tóthová. 2019. “Circular Economy According to the 2030 Environmental Strategy.” https://www.odpady-portal.sk/Dokument/104725/obehove-hospodarstvo-podla-envirostrategie-2030.aspx
European Court of Auditors. 2023. “SK – Circular Economy Slow Transition of Member States Despite EU Measure.” https://www.eca.europa.eu/ECAPublications/SR-2023-17/SR-2023-17_SK.pdf
OECD. 2022. Closing the Loop in the Slovak Republic: A Roadmap towards Circularity for Competitiveness, Eco-innovation and Sustainability. https://www.oecd.org/environment/waste/highlights-closing-the-loop-in-the-slovak-republic-roadmap_EN.pdf
Beckmann, A., Sivarajah, U., and Irani, Z. 2021. “Circular Economy Versus Planetary Limits: A Slovak Forestry Sector Case Study.” Journal of Enterprise Information Management 34 (6): 1673-1698. http://hdl.handle.net/10454/18293
Ministry of Environment of the Slovak Republic. 2019. “Greener Slovakia – Strategy of the Environmental Policy of the Slovak Republic Until 2030.” https://www.minzp.sk/files/iep/greener-slovakia-2030.pdf
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How committed is the government to updating and protecting critical infrastructure?
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The government is clearly committed to updating basic technical infrastructure.
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The government is largely committed to updating basic technical infrastructure.
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The government is somewhat committed to updating basic technical infrastructure.
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1
The government is not at all committed to updating basic technical infrastructure.
Law No. 45/2011 Coll. on Critical Infrastructure was enacted on February 8, 2011, to enhance the protection of vital infrastructure, particularly against the escalating threat of terrorist attacks. This legislation aligns with EU Council Directive 2008/114/EC, which pertains to identifying and marking European critical infrastructures and evaluating their protection needs. The new Minister of the Interior plans to draft a new law in this field and establish a new unit dedicated to managing critical infrastructure (Ministry of Interior 2023b).
Critical infrastructure protection encompasses a broad range of issues. Over several years, Slovakia has identified the necessary infrastructure and associated protective tasks. It is essential to understand that safeguarding critical infrastructure is not a one-time effort but a continuous process requiring sustained attention. Departments responsible for individual sectors or operators of critical infrastructure elements must focus continuously on protection, incorporating the latest methods, trends, and knowledge to enhance their practices. Slovakia is a member of the Critical Infrastructure Web Information Network (Ministry of Interior of the Slovak Republic, 2023a).
The National Program for the Protection and Defense of Critical Infrastructure in the Slovak Republic has been established. According to the current law on critical infrastructure and its Annex No. 3, the main sectors and their subsectors under the jurisdiction of central authorities are:
Transport: Managed by the Ministry of Transport and Construction of the Slovak Republic, including subsectors such as road, air, water, and rail transport.
Electronic Communications: Overseen by the Ministry of Transport and Construction of the Slovak Republic, encompassing subsectors such as satellite communications, networks and services of fixed electronic communications, and mobile electronic communications.
Energy: Under the Ministry of Economy of the Slovak Republic, including subsectors like mining, electric power, gas, oil, and oil products.
Post: Managed by the Ministry of Transport and Construction of the Slovak Republic, overseeing postal services, postal payments, and procurement activities.
Industry: Overseen by the Ministry of Economy of the Slovak Republic, including subsectors such as the pharmaceutical, metallurgical, and chemical industries.
Information and Communication Technologies: Under the Office of the Deputy Prime Minister of the Slovak Republic for Investments and Informatization, focusing on information systems and networks.
Water and Atmosphere: Managed by the Ministry of the Environment of the Slovak Republic, including subsectors such as meteorological services, water structures, and the provision of drinking water.
Healthcare: Under the Ministry of Health of the Slovak Republic.
Finance: Managed by the Ministry of Finance of the Slovak Republic, including subsectors such as banking, financial markets, and public finance management systems (Santusová & Jakubík, 2020).
Infrastructure in the Slovak Republic is highly vulnerable and interconnected. The wide range of issues related to its protection reflects the critical importance of infrastructure for society in Slovakia (Santusová & Jakubík, 2020).
Citations:
45/2011 Z. z. Zákon o kritickej infraštruktúre. 2011. Law no. 45/2011 Coll. https://www.zakonypreludi.sk/zz/2011-45
Ministry of Interior of the Slovak Republic. 2023a. “Protection of critical infrastructure.” https://www.minv.sk/?Ochrana_kritickej_infrastruktury_1
The National Program for the Protection and Defense of Critical Infrastructure in the Slovak Republic. https://www.mhsr.sk/uploads/files/c2CSdqQ5.pdf
Ministry of Interior of the SR. 2023. “Press Release.” https://www.minv.sk/?tlacove-spravy-4&sprava=vlada-schvalila-navrh-noveho-komplexneho-ramca-procesov-a-postupov-pre-krizove-riadenie-slovenskej-republiky
Santusová, D., and Jakubík, P. 2020. “Kritická infraštruktúra v Slovenskej republike.” Bezpečnostní teorie a praxe 3/2020. https://veda.polac.cz/wp-content/uploads/2020/11/Kriticka-infrastruktura-v-Slovenskej-republike.pdf
Critical infrastructure protection encompasses a broad range of issues. Over several years, Slovakia has identified the necessary infrastructure and associated protective tasks. It is essential to understand that safeguarding critical infrastructure is not a one-time effort but a continuous process requiring sustained attention. Departments responsible for individual sectors or operators of critical infrastructure elements must focus continuously on protection, incorporating the latest methods, trends, and knowledge to enhance their practices. Slovakia is a member of the Critical Infrastructure Web Information Network (Ministry of Interior of the Slovak Republic, 2023a).
The National Program for the Protection and Defense of Critical Infrastructure in the Slovak Republic has been established. According to the current law on critical infrastructure and its Annex No. 3, the main sectors and their subsectors under the jurisdiction of central authorities are:
Transport: Managed by the Ministry of Transport and Construction of the Slovak Republic, including subsectors such as road, air, water, and rail transport.
Electronic Communications: Overseen by the Ministry of Transport and Construction of the Slovak Republic, encompassing subsectors such as satellite communications, networks and services of fixed electronic communications, and mobile electronic communications.
Energy: Under the Ministry of Economy of the Slovak Republic, including subsectors like mining, electric power, gas, oil, and oil products.
Post: Managed by the Ministry of Transport and Construction of the Slovak Republic, overseeing postal services, postal payments, and procurement activities.
Industry: Overseen by the Ministry of Economy of the Slovak Republic, including subsectors such as the pharmaceutical, metallurgical, and chemical industries.
Information and Communication Technologies: Under the Office of the Deputy Prime Minister of the Slovak Republic for Investments and Informatization, focusing on information systems and networks.
Water and Atmosphere: Managed by the Ministry of the Environment of the Slovak Republic, including subsectors such as meteorological services, water structures, and the provision of drinking water.
Healthcare: Under the Ministry of Health of the Slovak Republic.
Finance: Managed by the Ministry of Finance of the Slovak Republic, including subsectors such as banking, financial markets, and public finance management systems (Santusová & Jakubík, 2020).
Infrastructure in the Slovak Republic is highly vulnerable and interconnected. The wide range of issues related to its protection reflects the critical importance of infrastructure for society in Slovakia (Santusová & Jakubík, 2020).
Citations:
45/2011 Z. z. Zákon o kritickej infraštruktúre. 2011. Law no. 45/2011 Coll. https://www.zakonypreludi.sk/zz/2011-45
Ministry of Interior of the Slovak Republic. 2023a. “Protection of critical infrastructure.” https://www.minv.sk/?Ochrana_kritickej_infrastruktury_1
The National Program for the Protection and Defense of Critical Infrastructure in the Slovak Republic. https://www.mhsr.sk/uploads/files/c2CSdqQ5.pdf
Ministry of Interior of the SR. 2023. “Press Release.” https://www.minv.sk/?tlacove-spravy-4&sprava=vlada-schvalila-navrh-noveho-komplexneho-ramca-procesov-a-postupov-pre-krizove-riadenie-slovenskej-republiky
Santusová, D., and Jakubík, P. 2020. “Kritická infraštruktúra v Slovenskej republike.” Bezpečnostní teorie a praxe 3/2020. https://veda.polac.cz/wp-content/uploads/2020/11/Kriticka-infrastruktura-v-Slovenskej-republike.pdf
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How committed is the government to fully decarbonizing the energy system by 2050?
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The government is clearly committed to transitioning to a decarbonized energy system.
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The government is largely committed to transitioning to a decarbonized energy system.
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The government is somewhat committed to transitioning to a decarbonized energy system.
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1
The government is not at all committed to transitioning to a decarbonized energy system.
To decarbonize the Slovak economy according to the WAM scenario (“with additional measures”), it will be necessary to reinvest €8 billion over the next decade, in addition to the WEM reference scenario (“with existing measures”). From 2031 to 2050, this amount will increase to €196 billion. By 2040, the average additional annual expenses will represent 1.8% of GDP; in the years 2020–2050, it will represent up to 4.2% per year. These costs include investments borne by households, the business sector, and the state. However, the Slovak Republic has adopted a higher decarbonization target than modeled in the WAM scenario (climate neutrality until 2050), which implies higher costs for decarbonization than stated in the Low-Carbon Development Strategy of the Slovak Republic until 2030 with a View to 2050. The strategy does not have exact data on costs and is broken down into sector-specific action plans: energy, industrial processes, transport, agriculture, land-use change and forestry, and waste sectors. Slovakia is lagging in its framework to support energy communities and enable consumers to actively participate in the energy transition (Ministry of the Environment of the Slovak Republic, 2023).
The role and nature of bioenergy in heating and transport for achieving renewable energy sources and greenhouse gas reduction targets need to be clearly defined in relation to a realistic assessment of natural gas and electrification. Slovakia must provide long-term certainty with measurable commitments for businesses to make investments. Meeting the EU-level target of a 55% reduction, translating to approximately 52.5% for Slovakia, will require enabling legislation for renewables and energy efficiency, as well as stricter regulations for persistently problematic sectors like transport and agriculture (GLOBSEC, 2020).
Slovakia has high ambitions to transform its energy system. Further policy support is needed to help decarbonize the economy. The recovery and resilience plan envisions direct investments to increase installed renewables capacity by 120 MW, representing approximately 20% of its current wind and solar capacity. The plan includes key market design reforms and support for renewables to accelerate the uptake of clean energy. Specifically, the updated legal framework will facilitate new activities and access to the electricity market – energy communities, aggregators, self-consumers, and electricity storage – and increase the possibilities of connecting new renewable sources to the grid (European Commission, 2023).
Citations:
The Ministry of the Environment of the Slovak Republic. 2023. https://www.minzp.sk/klima/nizkouhlikova-strategia/
GLOBSEC. 2020. “Slovakia Low Carbon Economy Pathways. Achieving more by 2030.” https://www.globsec.org/sites/default/files/2021-02/Slovakia-LCEP_Achieving-more-by-2030_Dec2020.pdf
European Commission. 2023. “Country Report – Slovakia.” https://economy-finance.ec.europa.eu/system/files/2023-05/SK_SWD_2023_625_en.pdf
The role and nature of bioenergy in heating and transport for achieving renewable energy sources and greenhouse gas reduction targets need to be clearly defined in relation to a realistic assessment of natural gas and electrification. Slovakia must provide long-term certainty with measurable commitments for businesses to make investments. Meeting the EU-level target of a 55% reduction, translating to approximately 52.5% for Slovakia, will require enabling legislation for renewables and energy efficiency, as well as stricter regulations for persistently problematic sectors like transport and agriculture (GLOBSEC, 2020).
Slovakia has high ambitions to transform its energy system. Further policy support is needed to help decarbonize the economy. The recovery and resilience plan envisions direct investments to increase installed renewables capacity by 120 MW, representing approximately 20% of its current wind and solar capacity. The plan includes key market design reforms and support for renewables to accelerate the uptake of clean energy. Specifically, the updated legal framework will facilitate new activities and access to the electricity market – energy communities, aggregators, self-consumers, and electricity storage – and increase the possibilities of connecting new renewable sources to the grid (European Commission, 2023).
Citations:
The Ministry of the Environment of the Slovak Republic. 2023. https://www.minzp.sk/klima/nizkouhlikova-strategia/
GLOBSEC. 2020. “Slovakia Low Carbon Economy Pathways. Achieving more by 2030.” https://www.globsec.org/sites/default/files/2021-02/Slovakia-LCEP_Achieving-more-by-2030_Dec2020.pdf
European Commission. 2023. “Country Report – Slovakia.” https://economy-finance.ec.europa.eu/system/files/2023-05/SK_SWD_2023_625_en.pdf
Graph View
To what extent do existing labor market institutions support or hinder the transition to an adaptive labor market?
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Labor market institutions are fully aligned with the goal of an adaptable labor market.
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Labor market institutions are largely aligned with the goal of an adaptable labor market.
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Labor market institutions are only somewhat aligned with the goal of an adaptable labor market.
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1
Labor market institutions are not at all aligned with the goal of an adaptable labor market.
Several reports have investigated the effectiveness of labor market policies and regulations in Slovakia. The most recent is the Value for Money Unit report, approved by the government in 2020 (Ministry of Finance, 2020: 30-32). The report states: “Slovakia’s spending on active labor market policies (ALMP) is relatively lower than in most EU countries, and the effectiveness and efficiency of certain tools are lower compared to experience from other EU countries. Slovakia spends considerably less on demand-side (education and training) programs than the EU average of over 40%. Better targeting of ALMPs could increase the number of unemployed candidates successfully placed in the labor market by nearly one-half.”
A recent academic study (Pisár and Mertinková, 2022: 96) offers a similar perspective: “Slovakia is the country with the 6th lowest funding of policy instruments (0.22% of GDP for active instruments; 0.55% of GDP in total). The funding structure of the instruments is 40.14% for active instruments and 59.86% for passive instruments, which does not meet European guidelines. Slovakia should direct its public spending from employment incentives to education support, as the effectiveness of employment support tools is highly debatable.”
Policies and regulations do not sufficiently incentivize employers to anticipate sustainability challenges in the labor market and invest in upskilling or reskilling their workforce. This was especially true during the pre-pandemic period when the labor market was not stressed by a lack of vacancies, and many companies had problems finding the needed workforce. Worker mobility across firms, industries, regions, and countries is supported by government schemes and employers, with the mobility benefit provided under the employment services law 5/2004 being the most visible tool.
The period following the publication of this report coincided with the COVID-19 crisis. During this time, the government focused on short-term measures to mitigate the economic shocks caused by the pandemic. Direct state instruments to support employment, particularly the compensation for part of employees’ salaries and short-time work schemes, increased the probability of employment retention.
Citations:
Pisár, P., and Mertinková, A. 2022. “Are Employment Policies Set Up Effectively? Case Study of Selected EU Countries and Slovakia.” Transylvanian Review of Administrative Sciences Special issue: 87-105.
Kišš, Š., Hronček, P., Mach, J., Nežinský, E., Sivák, T., Slobodníková, S., and Štefánik, M. 2017. Spending Review of Labour Market and Social Policies: Final Report. Bratislava: Ministry of Finance.
Zákon 5/2004 o službách zamestnanosti. https://www.zakonypreludi.sk/zz/2004-5
A recent academic study (Pisár and Mertinková, 2022: 96) offers a similar perspective: “Slovakia is the country with the 6th lowest funding of policy instruments (0.22% of GDP for active instruments; 0.55% of GDP in total). The funding structure of the instruments is 40.14% for active instruments and 59.86% for passive instruments, which does not meet European guidelines. Slovakia should direct its public spending from employment incentives to education support, as the effectiveness of employment support tools is highly debatable.”
Policies and regulations do not sufficiently incentivize employers to anticipate sustainability challenges in the labor market and invest in upskilling or reskilling their workforce. This was especially true during the pre-pandemic period when the labor market was not stressed by a lack of vacancies, and many companies had problems finding the needed workforce. Worker mobility across firms, industries, regions, and countries is supported by government schemes and employers, with the mobility benefit provided under the employment services law 5/2004 being the most visible tool.
The period following the publication of this report coincided with the COVID-19 crisis. During this time, the government focused on short-term measures to mitigate the economic shocks caused by the pandemic. Direct state instruments to support employment, particularly the compensation for part of employees’ salaries and short-time work schemes, increased the probability of employment retention.
Citations:
Pisár, P., and Mertinková, A. 2022. “Are Employment Policies Set Up Effectively? Case Study of Selected EU Countries and Slovakia.” Transylvanian Review of Administrative Sciences Special issue: 87-105.
Kišš, Š., Hronček, P., Mach, J., Nežinský, E., Sivák, T., Slobodníková, S., and Štefánik, M. 2017. Spending Review of Labour Market and Social Policies: Final Report. Bratislava: Ministry of Finance.
Zákon 5/2004 o službách zamestnanosti. https://www.zakonypreludi.sk/zz/2004-5
To what extent do existing labor market institutions support or hinder the transition to an inclusive labor market?
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Labor market institutions are fully aligned with the goal of an inclusive labor market.
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Labor market institutions are largely aligned with the goal of an inclusive labor market.
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Labor market institutions are only somewhat aligned with the goal of an inclusive labor market.
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1
Labor market institutions are not at all aligned with the goal of an inclusive labor market.
There is an ongoing discussion in Slovakia about how effectively policies and regulations combine accessible out-of-work benefits with active labor market programs to safeguard workers and improve job prospects. No final consensus has been reached. Few policies and regulations exist to incentivize people to enter employment or increase working hours; most target women with children (the National Action Plan for Employment of Women for the Years 2022–2030 was recently adopted). The proportion of young people not employed, educated, or trained is marginal and is addressed especially by the ongoing educational reform.
The legal system provides sufficient space for employers to help workers achieve a work-life balance. The main instrument is collective contracts signed between the employer and the representatives of employees. These contracts define a concrete set of benefits, including the rules for remote work arrangements. The scope and scale of such benefits differ case by case.
A specific problem in Slovakia is the long-term unemployment of marginalized groups, which governmental policies insufficiently address. According to Kahanec et al. (2020), almost half of the Roma households in Slovakia declare themselves unemployed (the highest number in the region). Kahanec et al. (2020) state: “The most important ALMP program in relation to Roma integration appears to be public works schemes (Activation Work Programs), since almost half of the unemployed Roma participate in these programs. They focus on jobs in the public sector to help the unemployed maintain basic work-related skills and last between 6 to 18 months, during which a lump-sum benefit is received. Benefits from public works schemes are often the only available income of Roma. However, studies show that these programs do not provide relevant skills for the participants who are unable to escape the unemployment trap and find a job on the open labor market.”
Citations:
Kahanec, M., Kováčová, L., Poláčková, Z., and Sedláková, M. 2020. The Social and Employment Situation of Roma Communities in Slovakia. Brussels: European Parliament.
NÁRODNÝ AKČNÝ PLÁN ZAMESTNANOSTI ŽIEN NA ROKY 2022 – 2030. https://www.employment.gov.sk/files/sk/ministerstvo/spolocny-sekretariat-vyborov/vybor-rodovu-rovnost/dokumenty-udalosti/nap_zamestnanosti_zien_22-30.pdf
The legal system provides sufficient space for employers to help workers achieve a work-life balance. The main instrument is collective contracts signed between the employer and the representatives of employees. These contracts define a concrete set of benefits, including the rules for remote work arrangements. The scope and scale of such benefits differ case by case.
A specific problem in Slovakia is the long-term unemployment of marginalized groups, which governmental policies insufficiently address. According to Kahanec et al. (2020), almost half of the Roma households in Slovakia declare themselves unemployed (the highest number in the region). Kahanec et al. (2020) state: “The most important ALMP program in relation to Roma integration appears to be public works schemes (Activation Work Programs), since almost half of the unemployed Roma participate in these programs. They focus on jobs in the public sector to help the unemployed maintain basic work-related skills and last between 6 to 18 months, during which a lump-sum benefit is received. Benefits from public works schemes are often the only available income of Roma. However, studies show that these programs do not provide relevant skills for the participants who are unable to escape the unemployment trap and find a job on the open labor market.”
Citations:
Kahanec, M., Kováčová, L., Poláčková, Z., and Sedláková, M. 2020. The Social and Employment Situation of Roma Communities in Slovakia. Brussels: European Parliament.
NÁRODNÝ AKČNÝ PLÁN ZAMESTNANOSTI ŽIEN NA ROKY 2022 – 2030. https://www.employment.gov.sk/files/sk/ministerstvo/spolocny-sekretariat-vyborov/vybor-rodovu-rovnost/dokumenty-udalosti/nap_zamestnanosti_zien_22-30.pdf
To what extent do existing labor market institutions support or hinder the mitigation of labor market risks?
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Labor market institutions are fully aligned with the goal of protecting individuals against labor market risks.
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7
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Labor market institutions are largely aligned with the goal of protecting individuals against labor market risks.
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3
Labor market institutions are only somewhat aligned with the goal of protecting individuals against labor market risks.
2
1
1
Labor market institutions are not at all aligned with the goal of protecting individuals against labor market risks.
Existing policies and regulations provide universal social protection for all workers. Health, social, and unemployment insurance are compulsory for all employed or self-employed individuals.
Labor Law 76/2021 Z. z. stipulates that the employer shall negotiate all relevant aspects of working conditions and sign the collective agreement with trade unions present in the firm or with the council of employers in firms where trade unions do not function. Only in firms where no representative body represents employees can the employer act autonomously.
Citations:
Zákonník práce. 2021. https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2001/311/vyhlasene_znenie.html
Labor Law 76/2021 Z. z. stipulates that the employer shall negotiate all relevant aspects of working conditions and sign the collective agreement with trade unions present in the firm or with the council of employers in firms where trade unions do not function. Only in firms where no representative body represents employees can the employer act autonomously.
Citations:
Zákonník práce. 2021. https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2001/311/vyhlasene_znenie.html
Graph View
To what extent do existing tax institutions and procedures support or hinder adequate tax revenue flows?
10
9
9
The tax system is fully aligned with the goals of ensuring adequate tax revenues.
8
7
6
7
6
The tax system is largely aligned with the goals of ensuring adequate tax revenues.
5
4
3
4
3
The tax system is only somewhat aligned with the goals of ensuring adequate tax revenues.
2
1
1
The tax system is not at all aligned with the goals of ensuring adequate tax revenues.
The tax quota II (taxes and social contribution to GDP) continuously increases in Slovakia, reaching 42.4% by 2023. Due to fiscal challenges generated by the “poly-crisis,” the government seeks ways to increase public revenues, independent of potential disincentives of the tax system that may discourage individuals from seeking employment and companies from making investments. Many experts criticize the especially high levels of social contributions. According to the OECD (2023), the level of social security contributions is significantly higher than the EU average and is expected to grow as the new Fico government increases health insurance contributions by 1%.
The body responsible for tax collection is “Finančná správa” SR. This agency has sufficient administrative capacity to collect taxes, although the efficiency of tax collection remains problematic. According to the Tax Justice Network’s Corporate Tax Haven Index, Slovakia ranks 51, better than most other new EU members.
Thanks to several improvements within the tax collection system, the tax gap in Slovakia has gradually decreased but remains higher than the EU average (European Union, 2023). Administrative costs of taxation in Slovakia are higher than in most other developed countries (for older data, see Nemec, Pompura, and Šagát, 2015). This point is emphasized by the European Semester Report 2022 (European Union, 2022: 8): “Further efforts simplifying taxes and improving compliance can increase public revenues and ensure fairness.”
Citations:
Nemec, J., Pompura, L., and Šagát, V. 2015. “Administrative Costs of Taxation in Slovakia.” European Financial and Accounting Journal 10 (2): 51-61.
European Union. 2022. 2022 Country Report – Slovakia. Brussels: European Union.
European Union. 2023. VAT Gap Report 2023. Brussels: European Union.
OECD. 2023. Revenue Statistics 2023 – the Slovak Republic. Paris: OECD.
https://cenastatu.sme.sk/kv-d-cdz/2022/
https://www.financnasprava.sk/sk/titulna-stranka
The body responsible for tax collection is “Finančná správa” SR. This agency has sufficient administrative capacity to collect taxes, although the efficiency of tax collection remains problematic. According to the Tax Justice Network’s Corporate Tax Haven Index, Slovakia ranks 51, better than most other new EU members.
Thanks to several improvements within the tax collection system, the tax gap in Slovakia has gradually decreased but remains higher than the EU average (European Union, 2023). Administrative costs of taxation in Slovakia are higher than in most other developed countries (for older data, see Nemec, Pompura, and Šagát, 2015). This point is emphasized by the European Semester Report 2022 (European Union, 2022: 8): “Further efforts simplifying taxes and improving compliance can increase public revenues and ensure fairness.”
Citations:
Nemec, J., Pompura, L., and Šagát, V. 2015. “Administrative Costs of Taxation in Slovakia.” European Financial and Accounting Journal 10 (2): 51-61.
European Union. 2022. 2022 Country Report – Slovakia. Brussels: European Union.
European Union. 2023. VAT Gap Report 2023. Brussels: European Union.
OECD. 2023. Revenue Statistics 2023 – the Slovak Republic. Paris: OECD.
https://cenastatu.sme.sk/kv-d-cdz/2022/
https://www.financnasprava.sk/sk/titulna-stranka
To what extent do existing tax institutions and procedures consider equity aspects?
10
9
9
The tax system is fully aligned with the goal of ensuring equity.
8
7
6
7
6
The tax system is largely aligned with the goal of ensuring equity.
5
4
3
4
3
The tax system is only somewhat aligned with the goal of ensuring equity.
2
1
1
The tax system is not at all aligned with the goal of ensuring equity.
There are no recent academic studies on the horizontal and vertical equity of taxation in Slovakia. Experts opine that horizontal equity should not be a concern; however, the issue of vertical equity deserves attention. According to the European Semester Report 2022 (European Union, 2022: 8): “The tax burden on workers is high, particularly for low-income earners. This can discourage people from taking up work.” Several experts have proposed a return to a progressive personal income tax rate to help revitalize Slovak public finance and increase the level of vertical tax equity. However, the Fico government did not include this change in its recent tax reform packageage (Bakoš, 2023).
Citations:
Bakoš, T. 2023. “Schmögnerová a ľavičiari pripravili pre Fica nové dane. Viac zaplatia bohatí, Matovičov balíček sa prepracuje.” Pravda October 25. https://ekonomika.pravda.sk/ludia/clanok/686143-schmognerova-a-laviciari-pripravili-pre-fica-nove-dane-viac-zaplatia-bohati-matovicov-balicek-sa-prepracuje/
European Union. 2022. 2022 Country Report – Slovakia. Brussels: European Union.
Citations:
Bakoš, T. 2023. “Schmögnerová a ľavičiari pripravili pre Fica nové dane. Viac zaplatia bohatí, Matovičov balíček sa prepracuje.” Pravda October 25. https://ekonomika.pravda.sk/ludia/clanok/686143-schmognerova-a-laviciari-pripravili-pre-fica-nove-dane-viac-zaplatia-bohati-matovicov-balicek-sa-prepracuje/
European Union. 2022. 2022 Country Report – Slovakia. Brussels: European Union.
To what extent do existing tax institutions and procedures minimize compliance and collection costs?
10
9
9
The tax system is fully aligned with the goal of minimizing compliance and collection costs.
8
7
6
7
6
The tax system is largely aligned with the goal of minimizing compliance and collection costs.
5
4
3
4
3
The tax system is only somewhat aligned with the goal of minimizing compliance and collection costs.
2
1
1
The tax system is not at all aligned with the goal of minimizing compliance and collection costs.
The most recent academic study analyzing the compliance costs of Slovak taxation is the article by Nemec, Čižmárik, and Šagát (2017). According to this study, the compliance costs of income taxation for the self-employed in 2011 were between 156.37% and 839.02%, and for firms, between 12.76% and 47.13%. The tax administration system has improved since this research, particularly through electronization. However, additional steps are necessary, as stressed by the European Semester Report 2022 (European Union, 2022). The tax rules remain complicated and insufficiently stable.
Babčák (2023) provides compelling data. According to his paper, during 2023, the income tax law was amended 25 times, with 15 of these changes not taking effect on January 1. The VAT tax law was amended eight times, and the tax code ten times. The author also emphasizes (Babčák, 2023: 16) that the tax legislation is “characterized by the extraordinary complexity of individual tax institutes, generating the associated excessive administration with which neither the tax subjects nor the financial administration have sufficient experience.”
Citations:
Nemec, J., Čižmárik, P., and Šagát, V. 2017. “An Estimation of the Compliance Costs of Slovak Taxation.” Ekonomie a Management 20 (2): 77-86.
Bančák, V. 2023. “Several Reflections and Thoughts on ‘Quo Vadis Slovak Tax Law’.” In Daňové právo a nové javy v ekonomike. Košice: UPJŠ, 7-44.
Babčák (2023) provides compelling data. According to his paper, during 2023, the income tax law was amended 25 times, with 15 of these changes not taking effect on January 1. The VAT tax law was amended eight times, and the tax code ten times. The author also emphasizes (Babčák, 2023: 16) that the tax legislation is “characterized by the extraordinary complexity of individual tax institutes, generating the associated excessive administration with which neither the tax subjects nor the financial administration have sufficient experience.”
Citations:
Nemec, J., Čižmárik, P., and Šagát, V. 2017. “An Estimation of the Compliance Costs of Slovak Taxation.” Ekonomie a Management 20 (2): 77-86.
Bančák, V. 2023. “Several Reflections and Thoughts on ‘Quo Vadis Slovak Tax Law’.” In Daňové právo a nové javy v ekonomike. Košice: UPJŠ, 7-44.
To what extent do existing tax institutions and procedures internalize negative and positive externalities?
10
9
9
The tax system is fully aligned with the goal of internalizing externalities.
8
7
6
7
6
The tax system is largely aligned with the goal of internalizing externalities.
5
4
3
4
3
The tax system is only somewhat aligned with the goal of internalizing externalities.
2
1
1
The tax system is not at all aligned with the goal of internalizing externalities.
The fact that the Slovak tax system is not an effective tool to internalize negative externalities is stressed by the 2022 European Semester Report (European Union, 2022: 8-9): “Fiscal policy and taxation are not yet sufficiently supporting the green transition. Addressing the pricing of CO2 emissions is essential, as they are generally too low given their environmental costs. Despite the economy’s energy intensity, environmental taxes were only 2.4% of GDP in 2020. Road taxes and vehicle registration fees could better reflect emission intensity by increasing them for polluting vehicles. Additionally, environmental charges related to waste management and air pollution could be adjusted accordingly to better promote resource efficiency.”
Taxes are not used to internalize positive externalities; this government role is realized through subsidies. Various subsidies exist for this purpose. However, the European Semester 2022 (European Union, 2022: 8) report states, “The use of economic incentives and disincentives lacks coherence and is not always in line with the polluter pays and the user pays principles.”
Citations:
European Union. 2022. 2022 Country Report – Slovakia. Brussels: European Union.
Taxes are not used to internalize positive externalities; this government role is realized through subsidies. Various subsidies exist for this purpose. However, the European Semester 2022 (European Union, 2022: 8) report states, “The use of economic incentives and disincentives lacks coherence and is not always in line with the polluter pays and the user pays principles.”
Citations:
European Union. 2022. 2022 Country Report – Slovakia. Brussels: European Union.
Graph View
To what extent do existing budgetary institutions and procedures support or hinder sustainable budgeting?
10
9
9
Budgetary institutions and policies are fully aligned with the goals of sustainable budgeting.
8
7
6
7
6
Budgetary institutions and policies are largely aligned with the goals of sustainable budgeting.
5
4
3
4
3
Budgetary institutions and policies are only somewhat aligned with the goals of sustainable budgeting.
2
1
1
Budgetary institutions and policies are not at all aligned with the goals of sustainable budgeting.
Formally, both international and domestic fiscal frameworks and rules require policymakers to prevent a continuous increase in government debt, particularly under the Constitutional Law on Fiscal Responsibility 493/2011, given Slovakia’s membership in the Eurozone. Despite these fiscal responsibility mechanisms, the deterioration of Slovak public finances persisted during the 2020–2023 period. While objective factors such as the COVID-19 crisis, high inflation, and the war in Ukraine contributed to this decline, the lack of political responsibility also played a significant role (Ministry of Finance, 2023).
Following the problematic period of 2020–2021, the public deficit decreased to 2% of GDP in 2022, reducing the government debt level from 61% to 57.8% in the same year. However, the situation deteriorated again in 2023, as parliament approved populist policies following the collapse of the Heger government and the September 2023 elections. According to the EU, Slovak public finances in 2023 are considered the least sustainable within the EU. The caretaker Odor government, which had limited powers, prepared measures to revitalize Slovak public finances (Ministry of Finance, 2023). Some of these proposals were adopted by the new Fico government, which approved a list of consolidation measures and managed to pass the related Law 530/2023 in parliament. However, the EU Commission’s assessment indicates that the draft budgetary plans for 2024 are not fully in line with the Fiscal Council’s recommendations (European Commission, 2023).
Overall, the Commission views the draft budgetary plans of Cyprus, Estonia, Greece, Spain, Ireland, Slovenia, and Lithuania as consistent with the Council’s recommendations. Conversely, the plans from Austria, Germany, Italy, Luxembourg, Latvia, Malta, the Netherlands, Portugal, and Slovakia are considered less aligned.
The Constitutional Law on Fiscal Responsibility 493/2011 does not mandate accumulating financial reserves during economic expansions to enhance financial capacity during crises. The budgetary rules do not prioritize public investment or safeguard future investment opportunities. The governments of 2020–2023 did not engage in long-term planning or conduct systematic, forward-looking assessments of the budget’s impact. However, such activities are systematically undertaken by the Council for Budgetary Responsibility, established based on the Constitutional Law on Fiscal Responsibility 493/2011.
The budgetary process in Slovakia is transparent. According to the IMF (2023: 1), “There are relatively strong institutions in place to support fiscal transparency in Slovakia. The evaluation in this report shows that most aspects of Slovakia’s fiscal reporting, budgeting, and risk management are in line with the good or advanced practices of the IMF’s Fiscal Transparency Code.”
The national budget does not explicitly address the Sustainable Development Goals (SDGs) and lacks target values for economic and social development expenditures. For instance, the Heger and Fico governments have overlooked long-term risks to public finances, such as population aging, a shortage of skilled labor, and the need for reforms in the pension, education, and healthcare systems.
Citations:
Ústavný zákon o rozpočtovej zodpovednosti. 2011. Zbierka zákonov Slovenskej republiky, 493/2011. https://www.zakonypreludi.sk/zz/2011-493
Zákon 530/2023 ktorým sa menia a dopĺňajú niektoré zákony v súvislosti so zlepšením stavu verejných financií. 2023. https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2023/530/20240101
Ministry of Finance. 2023. Návrh na ozdravenie verejných financií. Bratislava: Ministry of Finance.
IMF. 2023. Slovak Republic: Technical Assistance Report-Fiscal Transparency Evaluation. Washington: IMF.
European Commission. 2023. “Commission Sets Out Key Priorities in the European Semester for the Year Ahead to Strengthen EU Competitiveness.” https://ec.europa.eu/commission/presscorner/detail/en/ip_23_5871
Following the problematic period of 2020–2021, the public deficit decreased to 2% of GDP in 2022, reducing the government debt level from 61% to 57.8% in the same year. However, the situation deteriorated again in 2023, as parliament approved populist policies following the collapse of the Heger government and the September 2023 elections. According to the EU, Slovak public finances in 2023 are considered the least sustainable within the EU. The caretaker Odor government, which had limited powers, prepared measures to revitalize Slovak public finances (Ministry of Finance, 2023). Some of these proposals were adopted by the new Fico government, which approved a list of consolidation measures and managed to pass the related Law 530/2023 in parliament. However, the EU Commission’s assessment indicates that the draft budgetary plans for 2024 are not fully in line with the Fiscal Council’s recommendations (European Commission, 2023).
Overall, the Commission views the draft budgetary plans of Cyprus, Estonia, Greece, Spain, Ireland, Slovenia, and Lithuania as consistent with the Council’s recommendations. Conversely, the plans from Austria, Germany, Italy, Luxembourg, Latvia, Malta, the Netherlands, Portugal, and Slovakia are considered less aligned.
The Constitutional Law on Fiscal Responsibility 493/2011 does not mandate accumulating financial reserves during economic expansions to enhance financial capacity during crises. The budgetary rules do not prioritize public investment or safeguard future investment opportunities. The governments of 2020–2023 did not engage in long-term planning or conduct systematic, forward-looking assessments of the budget’s impact. However, such activities are systematically undertaken by the Council for Budgetary Responsibility, established based on the Constitutional Law on Fiscal Responsibility 493/2011.
The budgetary process in Slovakia is transparent. According to the IMF (2023: 1), “There are relatively strong institutions in place to support fiscal transparency in Slovakia. The evaluation in this report shows that most aspects of Slovakia’s fiscal reporting, budgeting, and risk management are in line with the good or advanced practices of the IMF’s Fiscal Transparency Code.”
The national budget does not explicitly address the Sustainable Development Goals (SDGs) and lacks target values for economic and social development expenditures. For instance, the Heger and Fico governments have overlooked long-term risks to public finances, such as population aging, a shortage of skilled labor, and the need for reforms in the pension, education, and healthcare systems.
Citations:
Ústavný zákon o rozpočtovej zodpovednosti. 2011. Zbierka zákonov Slovenskej republiky, 493/2011. https://www.zakonypreludi.sk/zz/2011-493
Zákon 530/2023 ktorým sa menia a dopĺňajú niektoré zákony v súvislosti so zlepšením stavu verejných financií. 2023. https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2023/530/20240101
Ministry of Finance. 2023. Návrh na ozdravenie verejných financií. Bratislava: Ministry of Finance.
IMF. 2023. Slovak Republic: Technical Assistance Report-Fiscal Transparency Evaluation. Washington: IMF.
European Commission. 2023. “Commission Sets Out Key Priorities in the European Semester for the Year Ahead to Strengthen EU Competitiveness.” https://ec.europa.eu/commission/presscorner/detail/en/ip_23_5871
Graph View
How committed is the government to utilizing research and innovation as drivers for the transition to a sustainable economy and society?
10
9
9
The government is clearly committed to utilizing research and innovation as drivers for the transition to a sustainable economy and society.
8
7
6
7
6
The government is largely committed to utilizing research and innovation as drivers for the transition toward a sustainable economy and society.
5
4
3
4
3
The government is somewhat committed to utilizing research and innovation as drivers for the transition toward a sustainable economy and society.
2
1
1
The government is not at all committed to utilizing research and innovation as drivers for the transition toward a sustainable economy and society.
The Slovak government rhetorically commits to leveraging research and innovation as key drivers for transitioning to a sustainable economy and society. The Council of the Government for Science, Technology, and Innovations has been established. The most recent national research and innovation strategy (Výskumná a inovačná autorita, 2023) was prepared by the Slovak Research and Innovation Authority, an entity within the Office of the Government of the Slovak Republic responsible for coordinating research and innovation. The preparation of this strategy involved over 200 experts from both the public and private sectors.
A roadmap for executing this strategy is in place, detailing clearly defined goals, time frames, and, in most cases, resources and performance indicators outlined in the annex to this strategy. However, the strategy and its annexes are not legally binding. The first part of the annex specifies sector-specific goals, which align well with the overall targets. The second part of the annex lists cross-sectoral goals (activities) designed to support research and innovation in Slovakia. For example, Activity 1.1.1.2 aims to develop a plan for consolidating the responsibilities of individual ministries, agencies, and institutions involved in research and innovation policy and support. The expected outcome of this activity is improved research and innovation development management, with participation anticipated from 11 ministries.
The government promotes an innovation-friendly environment through various measures. According to Pisár, Ďurčeková, and Křápek (2021), EU funding has been the primary source of public support for business innovation in Slovakia since 2006. National public investment in research and innovation remains among the lowest in the EU.
Specific measures are in place to enable startups to effectively translate scientific advancements into more resource-efficient products. The Conception for the Support of Startups exists but has not been updated for nearly a decade. Startups receive both financial and in-kind benefits.
Specialized bodies supporting startups include the Slovenská záručná a rozvojová banka and the Slovak Business Agency. There are no significant bureaucratic obstacles hindering the application process for support.
While raising venture capital for startups may pose challenges, private banks also offer specific programs providing loans to startups. For example, Slovenská sporiteľna runs a special program, “Program pre začínajúcich podnikateľov a podnikateľky,” designed to support startups.
Citations:
https://www.vlada.gov.sk/rada-vlady-sr-pre-vedu-techniku-a-inovacie/
Výskumná a inovačná autorita. 2023. Slovensko, ktoré si verí: Národná stratégia výskumu, vývoja a inovácií 2030. Bratislava: Úrad vlády.
https://vaia.gov.sk/sk/
https://www.mhsr.sk/uploads/files/pTlqvAqi.pdf?csrt=4986357129893706867
Pisár, P., Ďurčeková, I., and Křápek, M. 2021. “Effectiveness of Public Support for Business Innovation from EU Funds: Case Study in Slovakia.” Journal of Public Administration and Policy 14(1): 261-283.
https://www.szrb.sk/
https://www.sbagency.sk/
https://www.slsp.sk/sk/biznis/zaciname-podnikat
A roadmap for executing this strategy is in place, detailing clearly defined goals, time frames, and, in most cases, resources and performance indicators outlined in the annex to this strategy. However, the strategy and its annexes are not legally binding. The first part of the annex specifies sector-specific goals, which align well with the overall targets. The second part of the annex lists cross-sectoral goals (activities) designed to support research and innovation in Slovakia. For example, Activity 1.1.1.2 aims to develop a plan for consolidating the responsibilities of individual ministries, agencies, and institutions involved in research and innovation policy and support. The expected outcome of this activity is improved research and innovation development management, with participation anticipated from 11 ministries.
The government promotes an innovation-friendly environment through various measures. According to Pisár, Ďurčeková, and Křápek (2021), EU funding has been the primary source of public support for business innovation in Slovakia since 2006. National public investment in research and innovation remains among the lowest in the EU.
Specific measures are in place to enable startups to effectively translate scientific advancements into more resource-efficient products. The Conception for the Support of Startups exists but has not been updated for nearly a decade. Startups receive both financial and in-kind benefits.
Specialized bodies supporting startups include the Slovenská záručná a rozvojová banka and the Slovak Business Agency. There are no significant bureaucratic obstacles hindering the application process for support.
While raising venture capital for startups may pose challenges, private banks also offer specific programs providing loans to startups. For example, Slovenská sporiteľna runs a special program, “Program pre začínajúcich podnikateľov a podnikateľky,” designed to support startups.
Citations:
https://www.vlada.gov.sk/rada-vlady-sr-pre-vedu-techniku-a-inovacie/
Výskumná a inovačná autorita. 2023. Slovensko, ktoré si verí: Národná stratégia výskumu, vývoja a inovácií 2030. Bratislava: Úrad vlády.
https://vaia.gov.sk/sk/
https://www.mhsr.sk/uploads/files/pTlqvAqi.pdf?csrt=4986357129893706867
Pisár, P., Ďurčeková, I., and Křápek, M. 2021. “Effectiveness of Public Support for Business Innovation from EU Funds: Case Study in Slovakia.” Journal of Public Administration and Policy 14(1): 261-283.
https://www.szrb.sk/
https://www.sbagency.sk/
https://www.slsp.sk/sk/biznis/zaciname-podnikat
Graph View
How committed and credible is the government in its activities to guide the effective regulation and supervision of the international financial architecture?
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9
9
The government is clearly committed to ensuring the stability of the global financial system.
8
7
6
7
6
The government is largely committed to ensuring the stability of the global financial system.
5
4
3
4
3
The government is somewhat committed to ensuring the stability of the global financial system.
2
1
1
The government is not at all committed to ensuring the stability of the global financial system.
The most recent Mutual Evaluation Report (MER, Council of Europe, 2022) states that Slovakia has been working hard to combat money laundering. According to this report, Slovakia was found to be “Compliant” with five and “Nearly Compliant” with 22 of the FATF’s 40 recommendations. Slovakia received a “Substantially Effective” rating for one of the Effectiveness and Technical Compliance evaluations. The report also states that Slovakia has progressed in addressing the defined deficiencies. However, the fifth round MER identified several shortcomings, such as no timelines for the National Risk Assessment (NRA) updates and no legal obligation to provide information about the results of the NRA.
Slovakia has intelligence and regulatory institutions dedicated to the prevention of money laundering. The Financial Intelligence Unit of the police forces (https://www.minv.sk/?financna-policia), established under Law 297/2008 on the protection against the legalization of illicit incomes, is responsible for overseeing compliance with the law. Other authorities, such as the National Bank of Slovakia and the Financial Directorate of the Slovak Republic, have specific functions within the scope of special regulations.
Law 297/2008 lists institutions that must comply with money laundering regulations and are obliged to report any suspicious transactions to the required authority. Examples of these obliged institutions include banks, stock exchanges, securities warehouses, management companies, tax and economic consultants, selected insurance companies, accountants, post offices, auditors, lawyers, and notaries. This system is relatively effective in preventing money laundering nationally, as the Council of Europe report confirms.
In spring 2023, disinformation circulated in Slovakia stating that the EU wanted to ban cash. As a result, the Sme Rodina party pushed for a constitutional amendment granting people the right to pay for goods and services in cash. The amendment was criticized by the European Central Bank (ECB) because it was not consulted, and the Court of Justice of the European Union has already ruled that cash payments cannot be refused.
Citations:
Council of Europe. 2022. Anti-money Laundering and Counter-Terrorist Financing Measures: Slovak Republic. Strasbourg: Council of Europe
Slovakia has intelligence and regulatory institutions dedicated to the prevention of money laundering. The Financial Intelligence Unit of the police forces (https://www.minv.sk/?financna-policia), established under Law 297/2008 on the protection against the legalization of illicit incomes, is responsible for overseeing compliance with the law. Other authorities, such as the National Bank of Slovakia and the Financial Directorate of the Slovak Republic, have specific functions within the scope of special regulations.
Law 297/2008 lists institutions that must comply with money laundering regulations and are obliged to report any suspicious transactions to the required authority. Examples of these obliged institutions include banks, stock exchanges, securities warehouses, management companies, tax and economic consultants, selected insurance companies, accountants, post offices, auditors, lawyers, and notaries. This system is relatively effective in preventing money laundering nationally, as the Council of Europe report confirms.
In spring 2023, disinformation circulated in Slovakia stating that the EU wanted to ban cash. As a result, the Sme Rodina party pushed for a constitutional amendment granting people the right to pay for goods and services in cash. The amendment was criticized by the European Central Bank (ECB) because it was not consulted, and the Court of Justice of the European Union has already ruled that cash payments cannot be refused.
Citations:
Council of Europe. 2022. Anti-money Laundering and Counter-Terrorist Financing Measures: Slovak Republic. Strasbourg: Council of Europe