Download Questionnaire to Member State Representatives, Annex 3

Príloha: Zaslanie originálnych podkladov za SR na sekretariát špeciálnej pracovnej skupiny
EK/EIB/členské štáty EÚ k 14.11.2014 (sprievodný list, zhrnutie, dotazník a prvý indikatívny
zásobník)
Annex 1: Summary to the Pipeline of investment projects
SLOVAK REPUBLIC
Project list is assembled in connection with an initiative of EC president Juncker (investment package in the
amount of 300 billion EUR) and in accordance with guidelines of the "Special Task Force" at the EU level and
steps agreed at the level of the Working Group "SK Task Force". On 20.10.2014 was sent a request to public
administration (central state and self- governments) as well as to the private sector to submit information to the
pipeline corresponding to conditions summarized in "Instruction for processing the information on the investment
projects of EU interest".
The output reflects an overall goal. The deadline for submission projects (by 31.10.2014 public sector,
respectively by 12.11.2014 private sector) was generally met. Central authorities and organizations submitted
projects totaling about 29 billion EUR. From the Ministry of Transport it is over 10 billion EUR. The key sectors of
interest i.e. transport, environment and economy submitted viable projects in line with the aim and intention of the
project.
From the self-governing regions responded Nitra, Žilina and Košice, from local self-governments responded the
capital city of Bratislava, Nitra and Kechnec. Private sector responded by a consolidated input from the Ministry of
Economy and it included key business companies such as Slovnaft, Nafta, Transpetrol, Eustream and others.
Professional federations and associations also responded. In addition projects are from USSK and Optimal Top.
Slovak Academy of Sciences submitted projects directly and they are endorsed by the Ministry of Education.
Indicative outcomes in billion EUR / number of projects in sectors
1. Knowledge and Digital Economy
2. Energy Union
3. Transport
4. Social Infrastructure
5. Resources and Environment
6. Multi sector self-governments
3.7 / 10
3.2 / 22
12.7 / 37
0.15 / 1
3.8 / 17
5.4 / 38
Total indicative pipeline volume is 29 billion EUR / 125 projects with approximate amount of 230 million per
project.
The projects were not subject to an individual evaluation, selection or special approval. It is expected that for the
overall evaluation of projects in terms of specific investment requirements and risks assessment will be set up a
special group of experts from the EIB/EU and private investor. (Projects that will not be ultimately included in the
project pipeline of the EU importance will be considered for a further use at level of the Slovak Investment
Holdings).
Conclusions:
• Pipeline was endorsed by the state secretaries of relevant ministries on 13.11.2015 with recommendation
for submission to the STF Secretariat on 14.11.2014 as planned.
• The "National Investment Plan" should be set up as the base for the future actions of the Government
• To advise the Special Task Force at the EU level on the need to define a special solution for financing
self-governments through Integrated Projects or Cluster solutions.
It is intended that by 31.1.2015 a separate material on "Juncker´s package" will be prepared for the session of the
Government of the Slovak Republic and will reflect process of preparation of the pipeline and conclusions of the
EU Council on 18-19.12.2014. Only after that it will be possible to take concrete and targeted measures to ensure
proper implementation of the investment opportunities from the proposed investment package in Slovakia.
Questionnaire to Member State Representatives, Annex 3:
Question 1: More generally, given the recent evolution of investment activity , and given the structure of the
economy, please identify the sectors with the biggest investment needs going forward (incl. those associated with
SMEs and MidCaps). Please quantify these investment needs to the extent possible, and explain how the needs
have been estimated.
To clarify what is meant by “sectors” in this context, please see the Annex for the categorisation of investment.
This categorisation seeks to capture investment in those areas that are the most crucial ones for boosting the
productivity, competitiveness and, ultimately, sustainable growth and employment of the EU economy, and for
securing that the growth is balanced and equitable. Ideally, the categories shown in the Annex would be used in
response to this question; however, others can be flagged as well if critical to your country.
The share of investment on GDP has consistently been above the EU average. However, Slovakia still remains
one of the most undercapitalized economies in the EU, as measured by the capital stock per unit of GDP.
Investment/GDP ratio (%)
Capital stock/GDP ratio (2013)
35.0%
5
30.0%
4
25.0%
20.0%
3
15.0%
10.0%
2
Source: Eurostat
ES
AT
IE
EA
PT
EU
FI
NL
BE
UK
LU
DK
0
SK
2013
2012
2011
2010
2009
2008
2007
Slovakia
1
RO
European Union
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
0.0%
MT
5.0%
Source: AMECO database, EC
The levels of capacity utilization are not consistent across sectors in Slovakia. Especially the automotive industry,
which has been the main source of growth for the Slovak economy in the past, it has reached its upper limit on
production and exports, and will require further investments in order to contribute to growth going forward. In
comparison, the production in the electronics industry, which has been the other high-profile recipient of
investments in the past, has never recovered above the 2010 peak, indicating idle capacities. However, both of
these sectors contributed to the growth more through the labour productivity than creation of jobs.
On the other hand, the capacity utilization in services has been consistently high (above 90%) for the past 3 years
(data are collected only since 2011), indicating that there is space for further investments. This concerns mainly
high-value added services sectors such as IT, telecommunications, professional and scientific services, as well
as financial and banking institutions. Most recent development suggest there is a potential for a solid contribution
to the employment growth in these sectors, as well as an acceleration of export in these sectors.
Moreover, the energy and transport sector show large potential for investment. Developing key infrastructure in
these sectors would boost potential for economic growth with positive spillovers into other sectors.
Question 2: Please identify the main barriers that prevent investment activity from recovering in those sectors
where it is currently depressed. Such barriers can be, e.g., lack of enabling government (infrastructure)
investment; lack of confidence and risk-taking in the private sector; lack of investment financing; regulatory
barriers; etc.. Please identify also the possible solutions/best practices to overcome those barriers and promote
investments in those sectors where the needs going forward are biggest (incl. structural reforms, identification of
type of finance needed and leveraging private resources through use of public funds) .
Barriers for investment in Slovakia:
The main reasons behind low investment activity, especially in eastern part of Slovakia are as follows:
 Infrastructure
The density of motorways per capita is much lower in the eastern and central parts of the country. As a
result, eastern regions do not have easy access to the large Bratislava market. Building such links is a
prerequisite to tapping the growth and investment potential. There is still no completed highway between
the east and west. Employers in the eastern and central regions view weak transport connections as the
most significant barrier to business and new investments.

Lack of skilled labour force
Investors find it sometimes hard to hire a person with adequate skill set. Low-skilled workers have worse job
prospects than their counterparts in other countries with employment only half that of the OECD countries,
although that for the tertiary-educated is not significantly different. Moreover, very low labour mobility does
not provide enough labour supply from other parts of the country for new investments. High tax wedge,
especially for low-skilled employees, is planned to be tackled with social contribution allowance.
Youth suffer from weak labour market, with an unemployment rate of 34%, which is among the highest in
EU and OECD countries. The vocational education and training (VET) system fails to provide adequate skills
for the labour market. The government plans to financially incentivize the firms to offer training for VET
students. Very low participation in life-long learning also contributes to worsening labour market
outcomes and productivity by decreasing the level of skills and improving matching.

Low adoption of new technologies
The resources devoted to research, development and innovation activities are weak in international
comparison. The Innovation Strategy has identified a set of challenges to be tackled for more evenly
balanced growth based on knowledge-based resources, including the need to strengthen public sector
research, clusters, an R&D tax credit scheme, venture capital, incubators, and to focus resources in specific
areas of specialisation, which are related to local comparative advantages. The promotion of clusters in
lagging regions could improve knowledge and technological transfers between firms and create a local
labour market. The implementation of a tertiary vocational education programme, including on-the-job
training, would provide the technicians needed to use new technology.
Possible solutions
The Slovak Investment Holding (SIH) will primarily invest in new strategic investments related to infrastructure,
environment and supporting small and medium businesses. The purpose of the holding fund is to multiply the
effect of public investments from EU funds through the so-called leverage effect. Selected financial mediators will
make decisions about particular investments, based on the approved investment strategy, in order to achieve the
commercial nature of the fund attractive also for investors. The holding is planned to start operating in the first
half of 2015.
When supporting business, the Government in cooperation with experts will create a motivating environment
which will stimulate establishment and development of starting innovative companies – the so-called startups. It
will prepare several programmes and measures which will contribute to their development. The state will ensure
information, educative and networking activities for startups, organize startup events as well as a direct support of
particular business plans and involvement of Slovak startups with the biggest potential in international startup
networks.
Government will also prepare measures to improve business environment with the aim to decrease the
administrative burden, mainly in the areas of establishment of business companies, tax collection and crossborder trade.
Indicative pipeline:
http://ec.europa.eu/priorities/jobs-growth-investment/plan/docs/project-list_part-2_en.pdf