National Reform Programme of the Slovak Republic 2023

1.1 National priorities..............................................................................................................................4

1.2 Fulfilling CSRs ..................................................................................................................................7 1.3 Delivering on the 2030 Agenda for Sustainable Development .........................................................8

1.1 Meeting the objectives of the European Pillar of Social Rights ........................................................9 2 Macroeconomic framework and medium-term forecast .................................................................. 13 3 Measures in key structural areas ....................................................................................................... 15

3.1 Public Finance ................................................................................................................................15

3.2 Education .......................................................................................................................................20 3.3 Productivity: research, development, innovation and digitalisation ................................................29

3.4 Labour market, social affairs and housing ......................................................................................38

3.5 Quality of institutions ......................................................................................................................43

3.6 Healthcare and long-term care .......................................................................................................51

3.7 Green transition ..............................................................................................................................57 4 EU cohesion policy.............................................................................................................................. 71 5 The institutional framework of the NRP............................................................................................. 75 Annex 1: Targets and indicators .............................................................................................................. 76 Annex 2: List of abbreviations ................................................................................................................. 82 List of graphs Chart 1: Sources of economic underperformance of the Slovak Republic relative to Germany (GDP per capita of Germany = 100), 2022 .....................................................................................................................4 Chart 2: International comparison of Slovakia's quality of life (standard deviation from the OECD EU average) .........................................................................................................................................................6 Figure 3 : Reform compass: distance from 2030 targets and best performance by area ...............................6 Chart 4: Agenda 2030: 17 Sustainable Development Goals and Slovakia's countdown ................................9 Chart 5: Contributions to GDP growth - forecast (p.p.).................................................................................13 Chart 6: EU spending (EUR million) .............................................................................................................13 Chart 7- Nominal vs. real wages and inflation (%) ......................................................................................14 Chart 8 - Contributions to inflation (p.p.).......................................................................................................14 List of tables Table 1: European Pillar of Social Rights - 20 principles..............................................................................10 Table 2: European Pillar of Social Rights - selected indicators, year 2022 ..................................................11 Table 3: Objectives of the 2030 Action Plan for the implementation of the EPSR .......................................12 Table 4: Status of disbursement and contracting of projects as at 31 December 2023................................71 Table 5: Status of implementation of the Slovakia 2021-2027 Programme as of 31 December 2023 .........73 Table 6: Overview of the indicators used .....................................................................................................77 Table 7: Description of result indicators .......................................................................................................80 Summary The National Reform Programme of the Slovak Republic 2024 (NRP) describes the reform efforts of the Government of the Slovak Republic (SR) in key structural areas. It aims to provide a comprehensive overview of the measures implemented and planned by the Slovak Republic in response to the Country- specific recommendations for Slovakia, whether these measures are implemented through EU cohesion policy, the Slovak Recovery and Resilience Plan (RRP) or from the state budget. At EU level, the NRP is a key part of the European Semester cycle, in which it is presented to the EU Council and the European Commission1 and plays a central role in the collective monitoring and multilateral debate on policy challenges and how to address them. The RRP also serves as a tool to communicate the implementation of the 2030 Agenda for Sustainable Development and the European Pillar of Social Rights. When planning and implementing reforms, it is necessary to base them on an analysis of the current state of the country in the most important areas of development and to place them in the context of the major structural challenges facing the Slovak Republic. Allocative efficiency, the labour market and education have been identified as the three main areas of lagging behind in terms of economic convergence. In addition to sustained higher GDP growth, the state must also pursue the objective of improving the quality of life of the population. In this sphere, housing, health and the quality of acquired knowledge and skills remain the biggest challenges. The priority of the Government of the Slovak Republic is to return to sustainable public finances and to stabilise public debt-to-GDP. The long-term sustainability of the Slovak Republic's public finances, burdened also by high future costs related to population ageing, has deteriorated over the past three years and is in a high-risk zone. This undesirable situation has been partly mitigated by the reform of the pension system to which Slovakia committed itself under the RRP. During the course of 2023, measures were implemented which diminish its positive impact, but measures are currently under preparation to ensure that the positive impact of the reform on the long-term sustainability of public finances is maintained. The government plans to align the concept of public expenditure limits with the new EU fiscal rules in order to simplify the fiscal rules and avoid rule dualities. The Slovak government intends to change the debt brake with the aim of adjusting sanction mechanisms and managing liquidity more effectively. At the same time, the quality of public finances has been strengthened by the implementation of changes aimed at prioritising investments and their continuous monitoring. Compared to the European Union average, the Slovak education system underperforms at several levels. Nowadays, it is necessary for the education system to emphasise the systematic and targeted development of comprehensive skills among pupils. A gradual transition to a new curriculum is therefore under way, which will enable pupils to develop their creative thinking and digital skills to a greater extent. The lack of support for children in pre-primary education is reflected in a lower proportion of differently disadvantaged children in kindergartens. In this context, the right of admission to kindergarten has been introduced for children from the age of four and progressively from the age of three, as well as the transition to normative funding for kindergartens. Other inclusive measures include a change in the approach to children with special educational needs and the introduction of desegregation standards. Reform efforts are also focusing on improving the performance of universities and supporting their ability to attract and retain talent. Modernising the existing infrastructure of universities and adjusting the methodology for allocating 1 Council Regulation (EC) No 1466/97, Regulation (EU) No 1175/2011 of the European Parliament and of the Council and Regulation (EU) 2021/241 of the European Parliament and of the Council. 1 grants by introducing performance contracts will support the profiling and diversification of universities based on their specific strengths and development potential. Research, development and innovation are of undeniable importance for long-term sustainable economic growth, quality of life and tackling global challenges. However, the impact of the reforms launched will only be seen over time. The importance of the research, development and innovation agenda is underlined by the consolidation of cross-ministerial coordination under the Office of the Deputy Prime Minister as part of the ongoing reform of competences and cross-ministerial coordination of policy-making in this area. The implementation of the measures from the adopted National Research, Development and Innovation Strategy 2030 significantly advances reform efforts towards more efficient governance, processes and allocation of increased resources to support the ecosystem. Digital transformation is part of successfully managing reforms in this area. A key element of Slovakia's digital transformation will be the successful implementation of the extensive National Digital Decade Plan. Concrete steps to support digitisation will be directed towards increasing the use of e-services by the state, developing cyber security and increasing the number of projects to develop and apply cutting-edge digital technologies. Demographic pressures, combined with a persistent brain drain and low participation of selected groups2 of the population, are leading to a deepening labour shortage. Employers today face the highest capacity shortages ever in filling vacant positions, but the increase in foreign workers in the last year has largely offset the departure of Slovaks from the labour market and contributed up to 0.7 p.p. to the growth of domestic employment. In this context, the measures implemented under the RRP contribute to reducing barriers and attracting skilled labour. For example, in order to support the attraction and retention of highly skilled employees and students, 3 fully operational client centres (one-stop shops) will be established to provide comprehensive services facilitating the establishment in Slovakia. Adjusting the indexation of the minimum subsistence level to reflect the rising cost of living for low-income households, as well as the unfreezing of the minimum pension, have the potential to mitigate the effects of higher inflation for vulnerable groups. However, as the level of the subsistence minimum remains well below the poverty line, the whole concept of the subsistence minimum needs to be reconsidered so that its amount actually corresponds to the minimum expenditure on the basic necessities of life. The quality of the institutional environment greatly influences the efficiency of resource allocation in the economy. In Slovakia, barriers to development in this area are manifested mainly in the form of limited enforceability of property rights, lack of trust in public institutions or regulatory and administrative barriers for entrepreneurs. In this context, it is important that a new reorganised court network has been launched, which aims to streamline court proceedings and improve the quality of court decisions. In turn, the electronicisation and speeding up of insolvency proceedings and commercial register processes will contribute to reducing administrative barriers to business. By the end of 2024, 300 specific measures will enter into force, leading to administrative savings for businesses. The planned legislative changes should bring improvements to the current mechanism for the management of seized and confiscated assets. The modernisation of information systems for international police cooperation will make the exchange of information needed to fight international crime more efficient. The aim of building shared service centres is to strengthen and improve the performance of local authorities in providing public services to citizens. As in developed countries, health spending is growing faster than the Slovak economy. After adjusting for demographics, current health spending as a share of GDP is even slightly higher in international comparison than in similarly wealthy countries. However, Slovakia's health system performance so far lags behind Western European health systems as well as neighbouring Central European countries. Slovakia has 2 Mothers with small children, people in the age group 60-69, members of the MRC, long-term unemployed. 2 one of the highest death rates in the EU from causes that are treatable or preventable. There is still considerable room for improvement in public health policies to reduce premature deaths. The Slovak health system is gradually moving towards a DRG reimbursement system for five selected groups of healthcare, representing 15-20% of the total, from 2024. A key measure in the area of hospitals is also the continuation of the reform to optimise its network. In order to improve the allocation of resources in the health sector, a health budget board is to be established. Under the RRP, contracts have been signed for seven major investment projects, but several are now behind schedule. In long-term care, the assessment of the needs of persons with disabilities for personal assistance is expected to be consolidated and streamlined. Russia's military invasion of Ukraine has highlighted the need to accelerate the green transition, reduce dependence on Russian fossil fuels and strengthen the resilience of the energy system across the EU. The European Commission has responded to these challenges with the REPowerEU plan. The ambition of the measures in the REPowerEU component of the Slovak Recovery and Resilience Plan is to contribute to reducing dependence on fossil fuels and to a faster and wider integration of renewable energy sources into the Slovak energy mix. Measures include, for example, simplification of permitting processes or investments in energy infrastructure, zero-emission transport and energy efficiency in buildings. The new climate law should harmonise the Slovak legislative framework with that of the EU and make a significant contribution to achieving the 2030 climate targets, including climate neutrality by 2050 at the latest. Investments in increasing the share of clean forms of transport support the transition towards sustainable transport. However, in the case of rail, rising construction costs and lengthy project preparation have made it difficult to meet some of the original targets. Improving water management in the landscape has the potential to bring about drought mitigation and contribute to the restoration of ecosystems and biodiversity. The forthcoming Waste Management Strategy and Action Plan aims to ensure stability and predictability of the circular and waste management environment and to improve its functioning. 3 1 Challenges of the Slovak economy The chapter focuses on the identification of key challenges that have a significant impact on the formation and development of the socio-economic structure of Slovakia. The challenges described are in line with national priorities, which are based on the specific recommendations of the Council of the EU for Slovakia (CSRs), the principles of the European Pillar of Social Rights (EPSR) and the implementation of the 2030 Agenda. The chapter also provides a basis for the formulation of future actions that are targeted to address the identified challenges and support the sustainable development of the country.

1.1 National priorities Taking stock of the country's current progress in addressing its main structural challenges is a key part of a successful reform effort. In 2022, the Slovak Economy Reform Compass project3 was introduced as a comprehensive tool to identify Slovakia's biggest challenges not only in terms of economic growth but also in terms of the quality of life of the population. Its update provides a more accurate view of the current state of the country in the context of the impact of recent crises and economic slowdown. Chart 1: Sources of economic underperformance of the Slovak Republic relative to Germany (GDP per capita of Germany = 100), 2022 0 -10 -20 -1,4 -0,5 -30 -0,4 15 -40 -30 -1,5 -0,1 -39 -50 +7,4 -16 11 -60 +3,5 -15 -70 -4 Allocative Number of Human capital Available Available capital Hours worked GDP efficiency workers technology Source: Eurostat/OECD, IFP calculation Note: The above charts are an updated part of the publication Reform Compass of the Slovak Economy. The arrows represent the absolute changes in the values for the individual sources of economic underdevelopment compared to the 2019 values (part of the original document). In line with the findings of the Reform Compass study, allocative efficiency, the labour market and the quality of human capital remain among the most significant factors of Slovakia's lagging behind the German economy. Compared to last year's NRP 20234, which decomposes economic growth based on 2019, the Slovak economy is slightly closer to the German level by 2022, mainly through the factor of allocative efficiency5. However, in the period under review, the German economy showed a tendency to move towards the EU average in a negative direction, namely in the GDP per capita in purchasing power parity standards, a lower growth in the purchasing power parity income of the German population compared to the EU average was identified. In the case of Slovakia, there was a largely stagnant development relative to the EU average over the same period, i.e. convergence towards Germany was passive. At the same time, 3 Reform compass of the Slovak economy. 4 National Reform Programme 2023. 5 The efficiency of resource allocation is primarily influenced by the quality of the institutional environment. In the conditions of the Slovak economy, significant barriers to development in this area are manifested mainly in the form of limited enforceability of property rights, lack of trust in public institutions and high regulatory barriers for entrepreneurs. 4 Slovak GDP data in purchasing power parity (PPP) should be interpreted with a higher degree of caution, as methodological flaws have been identified in the measurement and revision of price levels, while Eurostat's time series revision policy is also subject to delays.6 Within a static view of the sources of Slovakia's economic underperformance, reform efforts should continue to be concentrated in the areas where the negative convergence gap is largest. Despite the resilience of the Slovak labour market7 in recent crises, many challenges remain unresolved. The labour market in Slovakia has proved to be relatively fit and resilient, even in an environment of slower economic activity caused by the pandemic and energy crises. On the other hand, the main obstacles to Slovakia's outperformance on the indicator of the share of the working population in the total population include long-term unemployment, the underperformance of the labour market of people from the MRC, the low representation of mothers with young children, and the limited participation of people aged 60 to 69. In the longer term, the implications of automation8, the ageing population9 and the increasing skill requirements of the workforce must also be taken into account, which synergistically pose a significant challenge to the current employment structure in Slovakia. The resilience of the labour market to macroeconomic fluctuations is an important but insufficient precondition for successful adaptation to these (partly ongoing) changes. The third main identified source of Slovakia's economic underdevelopment is the quality of human capital. The education system is marked by a lack of inclusion, which starts with low participation of children in pre-primary education. The challenge remains the elimination of the readiness gap at entry to primary education and a more targeted focus on educational outcomes, not only literacy and lifelong skills, but the whole spectrum of areas where educational outcomes lag behind and do not create the conditions for the development of an innovative economy. This is the case, for example, in the areas of mathematical and reading literacy and knowledge and skills in science literacy. Universities face the problem of declining attractiveness, which is reflected in the departure of a significant percentage of domestic students to foreign educational institutions. The rigid nature of the lifelong learning system and the absence of quality career guidance contribute to the relatively low participation of adults in further education once they enter the labour market. In the light of technological progress, the skills gap between the available workforce and the requirements of the labour market is widening. In addition to sustained higher GDP growth, the country must also pursue the goal of improving the quality of life of its citizens. In this sphere, the areas of greatest underdevelopment are health, housing and, as with economic growth, the quality of acquired knowledge and skills. Challenges in education are also largely related to other areas. In a broader sense, education is a universal public good that cuts across almost all spheres of social and economic life. Compared to other economic policies, it has higher long-term returns and is a necessity for the development of innovation. 6 On parity (Dujava and Žúdel, 2023). This issue is also discussed in detail in the study Is Slovak GDP per capita in purchasing power parity catching up with richer EU countries?(Hlaváč, 2023). 7 The resilience of the labour market in the context of the pandemic crisis can be partly attributed to a change in the nature of job protection. In contrast to the financial crisis of 2008/09, the pandemic crisis was not primarily manifested by an increase in the unemployment rate, but primarily by a reduction in the utilisation of workers' capacities (hours worked) while maintaining employment status. This was due to the application of a job protection system ('Kurzarbeit'), which had not been implemented in Slovakia during previous recessions. (Morvay and Hudcovský, 2022). 8 Technological progress in Slovakia threatens the low- and medium-skilled workforce in particular. Thus, occupations with low average wages are more at risk from automation, with further implications for the growth of income inequality and social aspects. In particular, a number of manufacturing, wholesale and retail trade industries are among the sectors with the highest share of high-risk employment in their total employment in Slovakia (Collective of authors of KOZ SR, 2020). 9 According to Eurostat population projections, Slovakia is among the European countries with the fastest ageing population. The current ratio between the population of post-working age and the working age population, which is approximately 1 : 4.1, will change to approximately 1 : 3.0 by 2030. Slovakia is thus facing the challenges of a declining population, including significant social and economic impacts, with negative consequences for the social security and health care systems and the need to adopt unprecedented and costly measures. See more in Slovakia's Vision and Strategy for Development to 2030. 5 Chart 2: International comparison of Slovakia's quality of life (standard deviation from the OECD EU average)10 0,5 0,0 -0,5 -1,0 -1,5 -2,0 Source: OECD, IFP calculation In addition to identifying challenges, it is equally important to set specific targets and regularly evaluate their achievement. To this end, targets11 have been set for the TOP 30 indicators12 in eight areas. The individual areas represent the biggest challenges in terms of economic growth, quality of life, but also in terms of megatrends such as demographic change (in relation to long-term sustainability indicators) or green and digital transition. An aggregated view of the identified challenges is provided by the Reform Compass in the updated Figure 3, which summarises on an annual basis the distance of the current situation from the set targets in outcome indicators covering all eight areas. Figure 3 : Reform compass: distance from 2030 targets and best performance by area Labour market and social affairs Productivity Education Quality of institutions Housing Public finance Health Green transition NRP 2024 goal NRP 2023 Source: IFP calculations 10 The left axis shows the standard deviations from the OECD EU average for each quality of life domain (the bars represent the average of the indicators in that domain). 11 The full methodology for setting targets is in Annex 1. 12 An overview of the 30 indicators, together with their long-term trend, can be found in Annex 1. 6 The graphical representation of Slovakia's main socio-economic lagging areas is a tool for identifying challenges where intensive reform efforts are needed to reach the targets. Effective use of available EU funding is therefore essential to achieve a narrowing of the gaps in all eight development areas in order to properly implement the measures of the ambitious RRP13. From this perspective, priority areas include in particular "trusted finance", "health" and "productivity", where the SR performs worst compared to the best EU countries. We are the furthest away from achieving the targets in the area of long-term sustainability and productivity. In particular, the high future costs of ageing populations and the lack of consolidation achieved so far are contributing to the unfavourable long-term sustainability of public finances. However, the deterioration in the long-term sustainability of public finances should also be seen in the context of the impact of the pandemic, the war in Ukraine and the resulting energy crisis. Compared to last year's 2023 NRP report, there has been little progress in the area of public finances in aggregate. Indeed, the positive year-on-year contribution of the long-term sustainability indicator (S2) and of the gross public debt is also strongly influenced by the favourable trend in other EU countries. The resulting value for a specific area is therefore subjective to the spread between the third best and worst performing countries in a given year and does not reflect purely absolute changes. Thus, the more significant improvement in the S2 indicator due to the pension reform has ultimately not been translated into the overall assessment, and the aggregate indicator for public finances remains well above the 2018/19 level or the 2030 target. The factors described above have resulted in the catching-up of the target value defined by the methodology becoming largely stagnant between the reference periods. The areas with the lowest convergence gaps include education14 and green transition. In the case of green transition, we identify a partial deterioration, which is mainly due to a negative short-term fluctuation in the municipal waste recycling rate indicator. In the long run, however, the shift in green transition is most visible, making the country use its environmental resources more efficiently. However, the energy crisis triggered by the armed conflict in Ukraine has highlighted the urgency of further challenges in this area, which need to be addressed by reform measures. It is therefore important to focus reform efforts in particular on diversifying energy sources to reduce dependence on fossil fuels and accelerating the transition to renewable energy sources in line with the European Commission's new REPowerEU plan.

1.2 Fulfilling CSRs CSRs for Slovakia 202315 recommend focusing on ensuring prudent fiscal policy and accelerating green and digital transition. The growth of domestic-financed current spending related to offsetting high energy prices and assistance to people fleeing Ukraine should be in line with overall neutral policy intentions. The general escape clause of the Stability and Growth Pact, which allows for a temporary deviation from the normally applied budgetary requirements in the event of a severe economic downturn, will be deactivated at the end of 2023. The Council of the EU therefore called for the adoption of fiscal policies in 2023-2024 that ensure medium-term sustainability of debt servicing while raising potential growth in a sustainable manner. This recommendation is particularly relevant for Slovakia given the identified shortcomings in the long-term 13 At the end of 2023, Slovakia has already submitted its 4th payment request for €924 million under the RRP, making it one of the countries with the fastest implementation of RRP measures. Equally important in terms of meeting the targets will be the efficient absorption of financial resources (almost €13 billion) and the implementation of EU Cohesion Policy investments for the period 2021-2027. 14 Within education, a significant year-on-year shift in the proportion of people participating in education and training over the last four weeks has been identified. However, it is important to note that in 2021 there was a methodological adjustment to the EU-LFS which also affected the above mentioned indicator. However, at the moment it is not possible to distinguish the effect of the methodological change from the actual progress in the indicator. However, Slovakia's significant underperformance in other education indicators, such as PISA or the share of children in pre-primary education, shows the necessity to increase reform efforts in the field of education. 15 EU Council recommendations for Slovakia for 2023. 7 sustainability of public finances at the national level. The CSRs also monitor the achievement of prudent medium-term fiscal positions, where reform efforts need to be strengthened. Slovakia's tax system has the potential to be reformed in order to increase economic efficiency, promote environmental and fiscal sustainability and enhance fairness. The tax burden on low-income labour and single-parent households is particularly high compared to other EU countries. On the other hand, the potential of environmental and property taxes is not being fully exploited. Changing the tax mix could boost growth while helping to promote green transition and environmental sustainability. The Council of the EU therefore recommends streamlining the tax mix and ensuring that it is more supportive of inclusive and sustainable growth, including by harnessing the potential of environmental and property taxes. Following the challenges addressed in the area of green transition, Slovakia is to reduce its overall dependence on fossil fuels, diversify energy sources and achieve energy savings on the basis of reforms and investments brought about by the new REPowerEU chapter in the approved update of the RRP. The REpowerEU chapter also includes measures that will help fight energy poverty, promote low- and zero-emission transport and accelerate the retraining of the workforce in green and related digital skills. The Slovakia Programme and the Modernisation Fund are also expected to play an important role in the green transition. The lack of workforce and required skills in sectors and occupations that are key to the green transition, including the production, deployment and maintenance of emission-neutral technologies, creates barriers to the transition to an emission-neutral economy. Quality education and training systems that respond to changing labour market needs and targeted up-skilling and retraining measures are key to reducing skills shortages and promoting labour inclusion and reallocation.16

1.3 Delivering on the 2030 Agenda for Sustainable Development Last year, Slovakia ranked 23rd out of 166 countries monitored in the broader UN assessment of countries in terms of achieving the 2030 Agenda goals. The overall score, which measures a country's progress in achieving all the Sustainable Development Goals (SDGs), increased to 79.12 from the original 78.27, indicating a slightly positive overall trend in Slovakia's development compared to 2022. The SDGs complement the identified national challenges, emphasising the environmental and social sustainability of further development. Two-thirds of the selected indicators used for national monitoring of progress on the reforms outlined in the previous section are likewise included in the SDGs tracked, thus partly reflecting the 2030 Agenda's accountability of achievements.17 Another initiative aimed at achieving the SDGs represents a complementary approach to the ambition to achieve the goals set at the national level. Slovakia is currently showing moderate progress in most of the monitored areas, the "No Poverty"18 target has been achieved. In contrast, major challenges are identified for the objectives "Climate action", "Responsible consumption and production" and "Industry, innovation and infrastructure". Although the 2022 target "Reduced inequalities" has already been achieved, challenges in this area remain again. 16 Slovakia is one of the countries with the highest concentration of employment in the automotive and steel industries in the EU, i.e. in sectors that will be significantly affected by the green transformation. 17 The 2024 Annual Sustainable Growth Survey recommends focusing accountability in the context of European policies on four cross-cutting areas: macroeconomic stability, environmental sustainability, productivity and equity. These dimensions of competitive sustainability are in line with the EU's efforts to make steady progress towards the UN Sustainable Development Goals. 18 The targets are set and evaluated by the UN. The "No Poverty" goal aims to end poverty through interlinked strategies, including the promotion of social protection systems, satisfactory employment and the capacity of the poor to overcome the disadvantages of poverty. A list of measurable indicators for the 'No Poverty' goal is available here. 8 Chart 4: Agenda 2030: 17 Sustainable Development Goals and Slovakia's countdown ↑ → ↗ ↗ ↗ ↗ ● ● ● ● ● ● ↗ ↗ ↗ ↗ ↗ ↗ ● ● ● ● ● ● → ↑ ↗ → ● ● ● ● ● Legend: ↑ on trajectory or maintaining the achieved goal, slight improvement, → stagnation, ↓ deterioration ● target achieved ● challenges remain ● significant challenges ● major challenges ● information unavailable Source: European Sustainable Development Report 2023 The 2030 Agenda, endorsed by UN Member States, represents a sustained global effort to monitor socio-economic development with a view to achieving long-term sustainability. It defines 17 areas of sustainable development and 169 measurable goals, emphasising the equitable distribution of economic prosperity, including with respect to future generations. Slovakia joined the implementation of the 2030 Agenda in March 2016. The European Sustainable Development Report 202319 finds, across the board, for all the countries studied, significant deviations from the expected trajectories for achieving the SDGs in all the areas monitored. As a result of the 2020 pandemic and the accompanying crises, including the energy crisis, the projected trajectories for meeting the targets have stalled across the board. However, committed countries continue to be strongly urged to use the second half of the 2030 Agenda implementation period to critically review and update their national strategies for the SDGs, while renewing their firm commitment to achieving them.

1.1 Meeting the objectives of the European Pillar of Social Rights The continued implementation of the European Pillar of Social Rights (EPSR) remains a political priority to promote upward social convergence in the EU. The purpose of the EPSR is to strengthen the enjoyment of EU citizens' rights under three headings: (i) equal opportunities and access to the labour market, (ii) fair working conditions, and (iii) social protection and inclusion, which are subsequently defined in more concrete terms in 20 core principles (table below). The foundations for the establishment of the EPSR were laid at the Bratislava Summit during the Slovak Presidency of the Council of the EU. 19 European Sustainable Development Report 2023. 9 In terms of achieving results under the EPSR, one of the biggest national challenges is the provision of adequate education and skills strengthening. We are also lagging behind in selected labour market indicators, including the long-term unemployment rate. By contrast, we are regularly among the best performing countries in the EU on income inequality and on the risk of poverty and social exclusion. All the major challenges currently affecting the SR, including ecological transition, digitalisation and demographic change, should respect equality between men and women. To achieve this, it is therefore essential to integrate an equality perspective between men and women into all policies and processes. Table 1: European Pillar of Social Rights - 20 principles Equal opportunities Fair working conditions Social protection and inclusion and access to the labour market 1. Education, training and lifelong learning 5. Secure and adaptable employment 11. Childcare and support for children 2. Equality between men and women 6. Payroll 12. Social protection 3. Equality of opportunity 7. Information on terms and conditions of 13. Unemployment benefits 4. Active employment support employment and protection in the event of 14. Minimum income dismissal 15. Retirement income and pensions 8. Social dialogue and worker 16. Healthcare involvement 17. Inclusion of people with disabilities 9. Work-life balance 18. Long-term care 10. Healthy, safe and adapted working 19. Housing and assistance for the environment and data protection homeless 20. Access to essential services Quality pre-primary education is essential for developing children's skills and improving the inclusiveness of the education system. Weaknesses in the education system also translate into problems in the labour market, particularly in the area of long-term and youth unemployment. Particular emphasis should also be placed on strengthening the participation of children from socially disadvantaged backgrounds20 . Although the year-on-year stagnation in the indicator for formal education of children under 3 can be attributed to a particularly unfavourable crisis period, Slovakia's worst regular ranking within the EU is more indicative of a systematic underperformance. Given the long-term return on investment in education, progress in this area needs to be strengthened to ensure that positive changes in educational outcomes are visibly translated into labour market outcomes. According to a recent survey, adult participation in learning is similar to the EU average21 . Formal adult learning contributes to greater labour market mobility22, while non-formal learning is important for retaining and updating skills. As a result, there is a higher chance of successful retraining, which is essential in view of the increasing demands on the quality of the workforce and to mitigate the negative effects of automation. Ultimately, adult learning helps to improve employability, promote innovation and social justice, or eliminate the digital skills gap. At the same time, extending working careers, closely linked to re-linking the increase in retirement age to the rise in life expectancy23, is a prerequisite for improving the long-term sustainability of public finances. The positive effect of this measure will only be fully realised if workers remain 20 These are recurring recommendations both within the framework of specific recommendations of the EU Council for Slovakia and the OECD - see e.g. CSR2 from 2019 or key recommendations within the OECD (2022): Economic Survey of Slovakia. 21 In this context, however, it is necessary to add that the EU-LFS methodology was modified in 2021, which affected the quality of data collection. A number of countries, including Slovakia, have modified their national questions, in particular as regards participation in non-formal education, which, according to Eurostat, may have a significant impact on the results. Therefore, the break in the data should be taken with a grain of salt and the country's progress on the adult learning indicator should only be objectively assessed well after the methodological change made in 2021. More on Adult learning statistics. 22 Labour mobility includes not only geographical mobility but also mobility between employers, occupations and positions. 23 Part of the package of laws approved by the Slovak Parliament (the Social Insurance Act and the Old Age Pension Savings Act) with effect from 1 January 2023. 10 employable and productive in old age. This requires ensuring that they have access to effective skills development throughout their lives, so that they can update and upgrade their skills in line with changing labour market needs. Table 2: European Pillar of Social Rights - selected indicators24, year 2022 Chapter Indicator EN EU27 Position Trend ST LT Equal opportunities Early leaving from education or training (%) 7,4 9,6 12 ↘ and access to the Gender employment gap (p.p.) 8,1 10,7 16 ↗ labour market Income inequality (S80/S20 share) 3,12 4,74 1 ↗ Adult participation in education25 (%) 12,8*** 11,9*** 12 ↗ Tertiary education attainment (%) 39,3 42,8 20 ↗ Individuals with basics. Digital skills (%) 51,31** 55,51** 20 ↗ Young people not in employment and education (NEET) (%) 12,3 11,7 20 ↗ Fair working Employment rate (%) 76,7 74,6 17 ↗ conditions Unemployment rate (%) 6,1 6,2 17 ↗ Long-term unemployment rate (%) 4,1 2,4 24 ↗ Youth unemployment rate (%) 19,9 14,5 22 ↗ Activity rate (%) 76,1 74,5 17 ↗ Rate of workers at risk of poverty (%) 7,1 8,5 12 Household disposable income (index since 2008) 124,4 109,74 7 ↗ Social protection and Risk of poverty or social exclusion (%) 16,5 21,6 6 ↗ inclusion Rate of severe material and social deprivation (%) 6,3 6,7 20 ↗ Children at risk of poverty or social exclusion (%) 24,7 24,7 21 ↗ Employment gap for people with health disability 21 21,4 10 ↗ Children under 3 in formal care (%) 2,3 35,9 27 ↗ Aggregate pension replacement rate (ratio) 0,6 0,58 7 ↘ Own expenditure on healthcare (%) 19,4* 14,52* 15 ↗ Note: The columns "SK" and "EU27" reflect the indicator value for Slovakia and the weighted average of the EU27 countries. The column "Position" indicates Slovakia's position among the EU27 countries. The first marker in the column "Trend" indicates the long-run (LT) trend of SK - change from 2011 to 2022 (or from the oldest available year in case of data for a shorter period) and the second marker indicates the short-run (ST) trend of SK - change in the most recent year. More detailed information on the indicators can be seen by opening the links in the indicator name. Legend: ↗ improvement, ↘ deterioration, → stagnation * Figures for 2021 ** Figures for 2023 *** Adjustment of the methodology in 2022 Source: Eurostat Compared to the EU average, Slovakia performs positively on income inequality and some poverty indicators. These are indicators that take into account income comparisons against the national poverty line26 and both are thus affected by the level of income inequality among low-income groups27. At the same time, however, some groups, such as people from an MRC background, children from socially disadvantaged backgrounds, lone parents with children and people with disabilities face a significantly higher risk of poverty or social exclusion than the rest of the population28 and may not be sufficiently captured in statistical surveys. 24 All indicators listed in the table 2 are part of the so-called Social scorecard. This is the official set of indicators chosen by the EC to monitor the implementation of the EPSR. The indicators listed in the table 2 have been selected to contain all key information relevant to Slovakia and to reflect as many of the EPSR principles as possible. Indicators where the quality of the collected data is lower, are only indirectly related to the EPSR principles or are less relevant for the Slovak Republic were not included in the selection. 25 This is a different indicator than in the table Table 3 which measures adult participation in learning with a reference period of 4 weeks. The indicator in the 2030 Action Plan for the implementation of the EPSR takes a reference frame of 12 months. The first indicator is based on information collected in the Labour Force Survey (LFS), the second from the Adult Education Survey (AES). 26 The poverty line is set at 60% of the median national equivalised disposable income. 27 The rate of workers at risk of poverty takes the relative concept fully into account, while the rate of workers at risk of poverty or social exclusion is a cross-sectional indicator that also takes into account severe material and social deprivation and very low work intensity. 28 Review of spending on groups at risk of poverty or social exclusion 2020. 11 The main quantitative targets for each of the three chapters under review were defined within the Action Plan for the implementation of the EPSR29. In the EPSR Action Plan, the European Commission has set three main EU targets to be achieved by the end of 2030. These were subsequently translated into targets at national level based on proposals from individual Member States on their contribution to the EU- wide commitment30. In 2022, Slovakia met one of the three targets set, namely to achieve an employment rate of 76.5% for people aged 25-64. However, the number of people at risk of poverty or social exclusion has increased year-on-year. Data for 2022 capture the impact of the energy crisis caused by the war in Ukraine and also the inertial responses of the COVID-19 crisis. However, this is a short-term fluctuation, as the long-term trend is downwards for the indicator. Table 3: Objectives of the 2030 Action Plan for the implementation of the EPSR EU SR Present value (2022) Equal opportunities and access to the labour market Adult participation in education (%, 25-64 years) 31 60 50 54,8 Fair working conditions Employment rate (%, 20-64 years) 78 76,5 76,7 Social protection and inclusion Reducing the number of people at risk of poverty or -15 million (including 5 -70 thousand. +90 thousand. social exclusion32 million children) Source: Definition of national targets by 2030 in the context of the Action Plan for the implementation of the European Pillar of Social Rights, EUROSTAT 29 The Action Plan for the implementation of the European Pillar of Social Rights was endorsed by the Porto Social Summit in May 2021 and subsequently by the European Council in June 2021 in the form of Conclusions in line with the Porto Declaration. 30 The definition of Slovak national targets by 2030 in the context of the Action Plan for the implementation of the EPSR was approved by the Government of the Slovak Republic at its meeting on 12 January 2022. 31 The reference frame for participation in training is 12 months. Available from Eurostat. 32 Compared to 2019. 12 2 Macroeconomic framework and medium-term forecast The Slovak economy strengthened in 2023 thanks to the use of EU funds. GDP grew by 1.1%, while other V3 economies lagged behind. GDP growth will reach 2% in 2024, supported by receding inflation and a recovery in domestic demand. Strong real wage growth will lead to an increase in household consumption, which will drive the recovery. The absorption of EU funds will be partly offset by stronger implementation of Recovery and Resilience Plan projects. Foreign trade will rebound and the mood in the world economy will slowly improve, boosting Slovak exports. A stable labour market will be hampered by labour shortages. However, the risks to the forecast are mainly on the downside, as Russian aggression persists, which may destabilise energy and food prices in the first instance. In 2024, GDP will grow by 2%, driven by receding inflation and a recovery in domestic demand. The recovery will be driven by household consumption, which will be supported by strong real wage growth above 3%. The 2023 peak in EU fund absorption will be partly replaced in 2024 by a stronger implementation of the Recovery and Resilience Plan (RRP) projects as well as the purchase of military equipment. Foreign trade will rebound from the trough and the mood in the world economy will slowly improve during the year, supporting Slovak exports. The labour market will be stable, labour shortages will hamper job creation. The gradual easing of monetary policy in the euro area should provide a positive impulse to the economy. The current tight monetary policy is already largely reflected in declining economic activity, resulting in a process of disinflation. Lower inflation will also allow for a gradual move away from restrictive monetary policy. Financial markets suggest that interest rates are currently at a peak and a reduction can be expected in the second half of 2024. This, together with the fading shocks, will accelerate economic growth in the bloc, especially in 2025. Chart 5: Contributions to GDP growth - forecast (p.p.) Chart 6: EU spending (EUR million) 2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F 2021 2022 2023 2024F 2025F 2026F 2027F 2028F 10 6000 4,8 5000 5 3,1 1,8 2,0 2,2 1,6 2,1 2,5 1,1 4000 0 3000 -3,3 2000 -5 1000 Private consumption Government consumption 0 -10 Investments Net export Stocks and No. drive. GDP growth EU funds - investments RRP - investments EU funds - other RRP - other Source: MoF Source: MoF We expect economic growth of around 2% between 2026 and 2028. The impacts of the drawdown from the Recovery and Resilience Plan will fade over time. Higher export capacity in the automotive industry will drive the Slovak economy forward. With new models, Slovak carmakers will gradually penetrate foreign markets and we expect to catch up lost market shares. Consolidation of public finances will dampen government consumption. However, household consumption will remain stable. The ageing population will start to have a negative impact on the Slovak economy. The main age categories of the labour force will start to shrink and employment will reduce the dynamics of the economic potential. The labour market is resilient, the unemployment rate is close to the minimum, but employment growth remains low at 0.2% due to labour shortages. The economy will create about 4 000 new jobs in 2024, a third fewer than last year. The industry and low-skilled services, where employment has still not 13 reached pre-pandemic levels, will suffer the most from the deterioration in domestic and foreign demand. Increased early retirements will continue to a lesser extent this year. The problem of a shrinking workforce in Slovakia continues to be cushioned by over 100 000 foreign workers. The unemployment rate will fall to a new low of 5.5%. Inflation will fall to 3% in 2024 and the price shock will reverberate across the EU. Slow price growth since April last year has led to a gradual decline in annual inflation, which has continued in 2024. The low price growth has also been helped by the continuation of subsidies for household energy prices, which have not risen this year. Food prices, which have been one of the main causes of high price increases in the recent past, have stabilised, as have prices of tradable goods and services. Real wages will return to growth in 2024 after two years, rising by 3.7%. Real wages will increase after two years of declines. Nominal wage growth will slow year-on-year, along with lower productivity growth, inflation and back-indexation. Negotiations in the public sector reflect the need for consolidation. The private sector will thus outpace the public administration in terms of wage increases in 2024. In the following years, the scissors between the growth of average wages in the economy and labour productivity will gradually close. Real wages should increase at an average rate of 2% per year from 2025. Chart 7- Nominal vs. real wages and inflation (%) Chart 8 - Contributions to inflation (p.p.) 14,0 12,8 15 Change in indirect taxes 12,0 10,5 Regulated prices 10 Food prices 10,0 Net inflation 5 8,0 Headline inflation 0 6,0 4,1 4,0 3,2 3,0 2,3 2,2 2,2 -5 2,0 -10 2021 2022 2023 2024F 2025F 2026F 2027F 2028F 0,0 -2,0 Real wage Nominal wage Inflation 2021 2022 2023 2024F 2025F 2026F 2027F 2028F Source: MoF Source: MoF High interest rates have slowed household lending activity, the property market has cooled slightly but housing prices remain overvalued. Household incomes are expected to be negatively affected by the consolidation of public finances, limiting the growth of disposable incomes and household over-indebtedness. Measures to promote the expansion of housing supply and curb household over-indebtedness through property taxation can address imbalances in the housing market. Rising energy prices have caused high current account deficits, also related to higher gas stock build-up from sources outside Russia. The deficits have dissipated by 2023 and in the coming years the negative trade balance will be reinforced by imports of military equipment and the high import intensity of EU-funded investments. Thus, the negative development of the balance of payments is not permanent. Following the recovery of export performance, especially in the automotive sector, we expect a gradual dampening of the trade balance imbalance. Moreover, excessive domestic consumer demand will be contained by fiscal consolidation. Downside risks prevail, and a war on our borders could once again destabilise energy and agricultural prices. Domestically, weaker absorption of RRP funds remains a risk, which should significantly increase capital stock and ensure productivity gains in the face of looming demographic challenges. The outcome of the US elections may also mean a new round of trade war with the EU. The opportunity, on the other hand, is stronger integration of people from abroad into the domestic labour market. World energy prices have fallen more sharply, opening the way for more moderate growth in regulated (energy) prices. 14 3 Measures in key structural areas

3.1 Public Finance The priority of the Government of the Slovak Republic is to return to sustainable public finances and to stabilise public debt-to-GDP. The long-term sustainability of the Slovak Republic's public finances, burdened also by high future costs related to population ageing, has deteriorated over the past three years and is in a high-risk zone. This situation has been partly mitigated by the pension reform to which Slovakia committed itself in the RRP. Measures have been taken during 2023 to reduce its positive impact, but other measures are currently under preparation to ensure that the positive impact of the reform on the long-term sustainability of public finances is maintained. The government plans to align the concept of public expenditure limits with the new EU fiscal rules in order to simplify the fiscal rules and avoid rule dualities. At the same time, the Slovak government intends to change the debt brake with the aim of adjusting sanction mechanisms and managing liquidity more effectively. At the same time, the quality of public finances has been strengthened by the implementation of changes aimed at prioritising investments and their continuous monitoring. Public finance outcome indicators 2030 2017 2018 2019 2020 2021 2022 2023 target Government gross debt SK 51,5 49,4 48,0 58,9 61,1 57,8 56,7 40 (% OF GDP) EU 81,9 79,8 77,7 90,0 87,4 83,5 83,1 - S2 - long-term sustainability indicator SK 2,4 2,5 3,8 7,7 10,6 11,3 9,9 2 (value) EU 1,9 2,3 2,4 2,4 3,0 2,7 2,9 - Note: the methodology for setting targets at national and European level can be found in Annex 1. The public spending limits have not been implemented in the general government budget for 2024- 2026, but are planned to be aligned with the new EU fiscal rules. Due to the autumn parliamentary elections, the Council for Budget Responsibility (CBR) calculated the public expenditure limits for the new government during December 2023. At that time, the draft budget was already on the agenda of the National Council of SR, but the public expenditure limits had not been discussed by the Finance and Budget Committee or the Economic Affairs Committee, nor had they been approved by the plenary of the National Council. For this reason, the limits were not reflected in the public administration budget for 2024 to 2026, which was approved by the National Council in December in order to avoid a budgetary standstill. The new fiscal rules are expected to be approved by the European Parliament this spring. These are expected to be stricter than national rules based on public spending limits in the case of the required annual consolidation. They should require an annual consolidation of the primary structural balance of around 1% of GDP over a seven-year horizon.33 In order to simplify the current fiscal rules, the public spending limits will be aligned with the new EU fiscal rules from 2025. The two approaches to calculating expenditure limits (national and European) would make public finance management complicated. Pending the entry into force of the new EU fiscal rules, the Ministry of Finance of the Slovak Republic (MoF) will submit to the legislative process transitional changes to the Budget Rules Act to ensure compliance with the public expenditure limits for 2024. In its programme statement, the Government of the Slovak Republic declared its intention to change the debt brake with the aim of adjusting sanction mechanisms and more effective liquidity management. Due to the recent increase in public sector debt during the COVID-19 pandemic and the energy crisis, the government will seek to amend the constitutional law on fiscal responsibility. As part of the modification of the law, the government will also consider changing the penalty bands of the debt brake, taking into account 10 years of experience with its operation. The sanction bands should not be based on 33 If these targets are met, Slovakia should achieve an approximately balanced budget in 2030. 15 gross government debt, but on net debt. This modification aims at allowing more efficient liquidity management of the general government sector. To maintain the positive impact of the first pillar reform on long-term sustainability, compensatory measures are being prepared. Several adjustments to the intermediate pillar of the pension system were adopted under the RRP to improve the sustainability of the pension system, which together improved the level of the S2 indicator by around 1.7% of GDP. Following the adoption of the reform, several measures were adopted during 202334 , which together reduce the positive impact of the reform on long-term sustainability by 0.2% of GDP. Compensatory measures are currently under preparation to maintain the positive impact of the reform on the long-term sustainability of the public finances. The change in the rules for the preparation of public investments has increased the emphasis on the social benefits of investment projects. In 2023, the MoF evaluated 203 projects with identified potential savings of EUR 563 million. Evaluations for a total of EUR 11.9 billion brought recommendations towards optimising technical solutions, improving processes or making projects cheaper. Ministries with an average annual investment of over €20 million have a published prioritisation methodology and investment plan for the next five years35. However, the investment plans still do not meet the quality criteria in some cases, which makes it impossible to link them to the budget. For example, the plans do not correspond to the actual budget execution during the year and thus do not contribute to better investment planning. The MoF coordinates their updating to ensure that the methodologies objectively reflect priorities and that the plans are realistic and linked to the public administration budget. Adopted measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Limits on public spending in the 2024- The limits on public spending were not discussed by 2026 budget the Finance and Budget Committee or the Economic Affairs Committee, nor were they approved by the Plenary of the National Council. For this reason, the limits have not been reflected in the public administration budget for 2024-2026. Until the new Component 18: EU fiscal rules enter into force, the Ministry of Finance Reform 2 of the Slovak Republic (MoF) will submit to the legislative process transitional amendments to the Budget Rules Act to ensure the implementation of the public expenditure limits for 2024. Implementation is ongoing Application of the methodology of the The preparation and appraisal of all relevant public procedures for the preparation and investment projects shall be carried out in accordance prioritisation of investments with a published methodology harmonising preparation and prioritisation. The evaluation is Component 18: carried out by the MoF for all new investment projects Reform 3 above EUR 1 million. Implementation is ongoing 34 In 2023, the minimum pension was unfrozen, while its level relative to the subsistence level was later increased, the 13th pension was permanently increased from 2024 and the rates to Pillar II were reduced to 4% from 2024. Other changes in the pension system (introduction of extraordinary indexation, lump-sum payment of the 13th pension, changes in the assessment of disability and adjustment of the entitlement to widow's and widower's pensions) have had a negligible impact from the perspective of long-term sustainability. 35 The published investment methodologies and plans are also summarised and published on the MoF website. 16 Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Implementation of budgeting under Part of the amendment to the Law on Budget Rules unchanged policy scenarios resulting approved by the National Council in March 2022 was from the amendment to the Financial the creation of NPC scenarios as a basis for public Regulation Act administration budgeting. NPC scenarios are compiled and in some cases (social/general health Amendment to insurance, railway companies, the area of personal the Financial expenditure of the national budget and local Regulation Act government expenditure) have been used for setting expenditure limits in the framework of the draft public administration budget for 2024-2026. Implementation is ongoing Reducing the VAT loophole and The legislative definition of tax fraud, coupled with improving collection efficiency 'three times and enough' style software alerts, will make it easier to assess participation in fraud, which tends to promote the psychological effect of tax compliance. Not implemented Streamlining processes for recovering The Tax Administration Act (Tax Code) is amended in tax arrears the part regulating the recovery of arrears with the aim of increasing the volume of recovered and paid arrears, reducing the total volume of registered arrears, increasing the efficiency of recovery and Current version ensuring the development of IT support for bailiffs. of the Tax Code Work is currently underway to finalise the text of the draft legislation. Implementation is ongoing Sending invoice data from tax entities E-invoice is an information system for submitting (eInvoice) invoices in electronic form. Following the EC initiative "VAT in the digital age36 ", it is expected to continue the preparation of the implementation of this system at national level, based eInvoice on the legislative framework to be approved by the EU Member States. Implementation is ongoing Planned measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information None Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Prepare a draft amendment to the The application practice of the debt brake has shown Programme constitutional law on budgetary the need for several changes. A shift from gross debt Statement of the Government of 36 E-invoicing is also one of the pillars of the VAT in the Digital Age initiative, which aims to modernise the VAT system in the EU and, among other things, to bring about a new digital system for real-time reporting of data from e-invoices issued. According to the EC proposal, the introduction of e- invoicing should be mandatory by 2028. 17 responsibility (adjustment of the debt tracking to net debt tracking is proposed in order to the Slovak brake) manage public sector liquidity more efficiently. Republic Aligning national public spending limitsThe new fiscal rules should enter into force this with new EU fiscal rules spring. In the case of the required annual Preliminary consolidation, they should be stricter than the national information on rules based on public spending limits. They will the amendment require an annual consolidation of around 1% of GDP to the Financial over a seven-year horizon. If they are met, Slovakia Regulation Act should achieve an approximately balanced budget in 2030. Improving electronic services and The measure responds to the call of tax subjects for promoting a client-oriented approach in the tax administration to become a modern the financial administration organisation and to bring services to the subjects that other institutions have been using for a long time (insertion of QR codes into the output documents of the financial administration). The aim of the measure is to reduce the number of errors in the payment of taxes, fees or penalties on the part of the tax subject. At the same time, this measure will speed up the work of the entities, which will ultimately bring positive feedback from them. The first QR code output documents are planned to be sent to the entities in May/June 2024. The measure also includes pre-filling of tax returns of individuals receiving income from employment and the abolition of the obligation for employers to carry out the annual tax settlement of employment tax. Improving electronic services in the Customs authorities are primarily responsible for the financial administration for customs supervision of the Union's international trade and thus contribute to fair and open trade, to the implementation of the external aspects of the internal market, the common commercial policy and other common Union policies affecting trade and to the overall security of the supply chain. Customs authorities shall put in place measures aimed in particular at: (a) the protection of the financial interests of the Union and its Member States; (b) the protection of the Union against unfair and illegal trade while promoting legitimate commercial activity; (c) ensuring the safety and security of the Union and its inhabitants and, where appropriate, the protection of the environment in close cooperation with other authorities; and (d) maintaining an appropriate balance between customs controls and the facilitation of legitimate trade. Relevant reference points Specific recommendations of the Council of the EU for Slovakia (CSRs) • CSR 2019/1 (Part 2): Safeguard the long-term sustainability of public finances, notably that of the healthcare and pension systems. • CSR 2020/3 (Part 3): Front-load mature public investment projects. 18 • CSR 2020/4 (Part 2,3): Ensure a favourable business environment and quality public services through enhanced coordination and policy-making. • CSR 2022/1 (section 3,5): For the period beyond 2023, pursue a fiscal policy aimed at achieving prudent medium-term fiscal positions. Continue to strengthen tax compliance, including by further digitalising tax administration. • CSR 2022/2 (Part 1): Proceed with the implementation of its recovery and resilience plan, in line with the milestones and targets included in the Council Implementing Decision of 13 July 2021. • CSR 2023/1 (Sections 3,4,6): Preserve nationally financed public investment and ensure the effective absorption of RRF grants and other EU funds, in particular to foster the green and digital transitionsFor the period beyond 2024, continue to pursue a medium-term fiscal strategy of gradual and sustainable consolidation, combined with investments and reforms conducive to higher sustainable growth, to achieve a prudent medium-term fiscal position. Continue to strengthen tax compliance, including by further digitalising the tax administration. • CSR 2023/2 (Part 1): Maintain the momentum in the steady implementation of the recovery and resilience plan and, following the recent submission of the addendum, including the REPowerEU chapter, rapidly start the implementation of the related measures. Proceed with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan. 2030 Agenda for Sustainable Development Goals • Goal 5: Equality between men and women • Goal 8: Decent work and economic growth • Goal 17: Partnerships for the Goals European Pillar of Social Rights • Principle 2: Equality between men and women • Principle 3: Equality of opportunity • Principle 15: Retirement income and pensions 19

3.2 Education Compared to the European Union average, the Slovak education system underperforms at several levels. Nowadays, it is necessary for the education system to emphasise the systematic and targeted development of comprehensive literacy skills of pupils, which are in line with the constantly changing demands of society. A gradual transition to a new curriculum is therefore under way, which will enable pupils to develop their critical and creative thinking and digital skills to a greater extent. Curriculum reform is also intended to strengthen the skills of teaching staff, including training them for the new curriculum. The lack of support for children in pre-primary education was reflected in the rejection of applications for admission to kindergarten due to insufficient capacity, as well as with a lower proportion of differently disadvantaged children in kindergartens. Support for pre-primary education has recently been highlighted by the introduction of the right of a child to be admitted to kindergarten for children from the age of four and gradually from the age of three, as well as by the preparation of the transition to normative financing of kindergartens. Other inclusive measures include a change in the approach to children with special educational needs across the education system, the introduction of desegregation standards, the development of a manual on de-parenting and the mapping of the needs of schools at all levels of education. A high proportion of domestic students go abroad to pursue higher education, where they often start their working lives. Reform efforts are therefore also focused on improving the performance of universities and supporting their ability to attract and retain talent. Modernising the existing infrastructure of universities and adjusting the methodology for allocating subsidies by introducing performance contracts will support the profiling and diversification of universities based on their specific strengths and development potential. Outcome indicators for education 2017 2018 2019 2020 2021 2022 2023 2030 target Proportion of children in pre-primary education SK 74,9 77,6 77,8 78,1 77,4 - - 94,6 (from 3 years to the beginning of compulsory primary education) EU 92,5 92,3 92,9 93,0 92,5 - - 94,6 PISA 37 SK - 466 - - - 458 - 473 (grade point average in reading literacy, maths and science) EU - 484 - - - 473 - 481 Percentage of pupils below basic level in reading SK - 31,4 - - - 35,4 - 28,0 (PISA) EU - 22,5 - - - 26,2 - 21,3 Percentage of young early school leavers SK 9,3 8,6 8,3 7,6 7,8 7,4 - 6,0 (% in the 18-24 age group) EU 10,5 10,5 10,2 9,9 9,8 9,6 - 6,0 Average ranking of the best university in TOP rankings SK 651 668 784 835 834 784 851 706 (average ranking in Times, Shanghai rankings and QS), EU median EU 316 319 336 334 353 356 421 353 Percentage of people participating in adult education SK 3,4 4,0 3,6 2,8 4,8 12,838 - 7,0 (age 25-64; last 4 weeks) EU 10,4 10,6 10,8 9,1 10,8 11,9 - 10,6 Note: the methodology for setting targets at national and European level can be found in Annex 1. Curriculum and textbook reform focuses on the systematic and targeted development of comprehensive literacy that is in line with the dynamic demands of society. The importance of reform efforts in this area stems from the need to move beyond the simple accumulation of isolated facts to deeper learning and the ability to understand connections. The poor results in PISA can be partly attributed to an education system in which pupils passively absorb and then memorise facts rather than developing creative thinking and soft skills. A new National Curriculum (SEP) for primary education was approved by the Minister 37 PISA testing takes place every 3 years. However, in 2021 it was postponed to 2022 to reflect the impact of the COVID-19 pandemic on pupils' abilities. 38 In 2022, the wording of the question on lifelong learning has been modified and refined in the Labour Force Survey (LFS) in order to harmonise with the Adult Education Survey (AES), with a reference period of the last 4 weeks. In an effort to improve the quality of data collection, the question was supplemented with more examples of courses, training and extra-curricular learning, highlighting the fact that all learning can also be delivered as online courses, which caused respondents to respond positively to a greater extent than in the past. 20 of Education at the end of March 2023, with implementation starting in September 2023 in primary schools with which an experimental verification agreement is in place. From the school year 2026/2027, the obligation to apply the new curriculum in education and training will apply to all primary schools from the first year onwards. In the first school year of implementation (2023/24), approximately 100 schools (39 selected) have expressed interest in piloting the new curriculum, increasing by 422 in the following school year (2024/25). The curriculum reform creates educational content organised in three multi-year cycles, while also applying the use of innovative methods and forms of teaching to the new educational content and creating a supportive and motivating school climate. The curriculum aims to develop students' ability to engage in future challenges, adapt to current situations, take responsibility, solve complex problems, critically approach information, and collaborate in diverse teams. The establishment of regional curriculum management and school support centres is a key element for the successful implementation of the new curriculum. The role of the centres is to provide mentoring, expert advice and consultancy services to help teachers with the transition to the new form of education following the introduction of the curriculum reform. The preparation and development of teaching and professional staff for the reformed content and forms of teaching will enhance the quality of their skills and their motivation for lifelong professional development. In 2022, 16 regional centres were created, in 2023 another 16 centres were created and in November 2023 the call for the last 8 centres was closed. There is also a wider scope to develop the skills of educators thanks to other measures and several legislative changes. These include the introduction of new curricula to prepare future teachers, support for lifelong professional development of teaching staff, updating of competencies and certification providers, expansion of in-service and qualification training in education and a new model for accreditation of professional development. The emphasis on supporting schools and teachers will also be reflected in the new Law on State Administration in Education and School Self-Government, which will help to increase the efficiency, effectiveness and quality of education in the regional education system. The optimisation of the network of schools and educational establishments will include transparent criteria for founders, as well as rules for inclusion and removal of the establishments in question from the network. A significant part of the reform efforts within the RRP focuses on increasing the inclusion of children with special educational needs, children from marginalised Roma communities and children from families at risk of poverty. In this context, the approval by the Parliament of legislative changes39 introducing support measures provided by a school or school establishment to enable a child or pupil to participate fully in education and training and to develop his/her knowledge, skills and abilities was an important step. Similarly, a definition of segregation and desegregation standards are introduced in school legislation. A national project on desegregation is also under preparation, which will include the development of pilot desegregation plans. The purpose of this reform is to provide guidelines for the prevention and desegregation of segregated education, a key element of which will be the successful implementation of the monitoring process in practice. Steps have so far been taken to develop a methodological material on school desegregation for head teachers and school founders, a methodological manual on desegregation in education and a concept for monitoring the risk of desegregation. Another important milestone for the promotion of inclusive education was the adoption of legislative changes by the National Assembly of the Slovak Republic concerning the implementation of compulsory pre-primary education for children from the age of five and the introduction of a legal entitlement to a place in a kindergarten or with other providers of pre-primary education from the age of three. Sufficient places will also be gradually ensured for all children in kindergartens or other providers of pre-primary education40. 39 Amendment to the Act on Education and Training and amendment to the Act on Financing of Primary Schools, Secondary Schools and Educational Institutions. 40 For all children from the age of four (from September 2024) and then from the age of three (from September 2025). 21 Adopoted measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Introduction of legal entitlement to a The amendment to the Education Act approved by the place at nursery school from the age of National Assembly of the Slovak Republic introduces three a universal legal entitlement to a place in kindergarten for children from the age of four from the school year Component 6: 2024/2025 and subsequently from the age of three Reform 1 from the school year 2025/2026. Implemented Redefinition of the concept of special The adoption of the amendment to the Education Act educational needs and preparation of and the amendment to the Act on the Financing of accompanying methodological materials Primary Schools, Secondary Schools and for teaching staff, professional staff and Educational Institutions defines children and pupils Component 6: school management experiencing barriers to access to education and Reform 2 establishes their entitlement to educational support through special support measures. Implemented Increase in the number of trained 10 000 teaching and professional staff will be trained teaching and professional staff through professional development programmes and other outreach activities. The professional development programmes are aimed at introducing a new model of eligible support measures in education and training, diagnosing the level of children's and Component 6: pupils' linguistic abilities and providing support for Reform 2 pupils with language barriers in accessing education. In the framework of professional development, 1270 participants were trained by January 2024, of whom 334 received a certificate upon completion. Implementation is ongoing Entry into force of legislation creating a The comprehensive guidance and prevention system comprehensive guidance system consists of newly established guidance and prevention centres (CPP), which provide specialist activities without a defined focus on target groups according to health disadvantage, with specialist activities being implemented in close cooperation between support teams in schools and school settings, including the so-called multidisciplinary team and the newly established specialised guidance and Component 6: prevention centres (SPCs). The amendment to the Reform 3 School Act was adopted and from 1 January 2023 the original concept of the guidance system was replaced by a new comprehensive guidance and prevention system. From 1.1.2024 the financing of the counselling centres is uniform and covered by the state budget. Implemented Increasing the share of optimised lower The main objective of the measure is to reduce the secondary education (LSE) courses and drop-out rate overall and specifically in the population implementing tools to prevent early of pupils with disadvantaged who are at excessive Component 6: school leaving risk of early school leaving. Reform 4 Implementation is ongoing 22 Introduction of desegregation standards - The definition of segregation clearly defines what acts phase 1 and omissions are considered segregation, thus avoiding different interpretations. The methodological materials provide guidelines for the prevention and desegregation of segregated education for the Component 6: different actors involved in education. The definition Reform 5 of segregation in the School Act has been approved by the National Assembly. Implemented Introduction of desegregation standards - The purpose of the measure is to apply desegregation phase 2 standards in all schools. A national desegregation project is under preparation, which will include the Component 6: development of school desegregation plans. Reform 5 Implementation is ongoing Establishing a definition of debarrier The manual defines the standards of debarring to standards, creating a debarrier manual meet the actual needs of children, pupils and students and mapping the needs of schools at all with disabilities and to respect the principles of levels of education universal design. An analysis of the current state of Component 6: debarring in schools in relation to the standards in Investment 1 place has been prepared and used as a basis for prioritising the debarring of individual schools. Implemented Approval of the primary education The Ministry of Education, Research, Development curriculum and Youth of the Slovak Republic has approved a new state educational programme for primary education with the possibility of its implementation Component 7: from 1.9.2023 and its compulsory universal Reform 1 introduction from 1.9.2026. Implemented Implementation of the new curriculum in In the first year of implementation (2023), primary schools approximately 100 schools expressed interest in piloting the new curriculum, of which 39 were selected. In the following year (2024), there was a significant increase in the number of schools involved Component 7: ,100-200 schools were expected to sign up, but 422 Reform 1 schools eventually expressed interest. The aim is to have at least 30% of public primary schools implementing the new curriculum by the end of 2025. Implementation is ongoing Introduction of on-line matriculation (final The measure aims at introducing the internet-based exam for all grammar and secondary part of the final school-leaving examination for pupils school graduates) in all grammar and secondary schools by 2026 at the latest. The achievement of the target by the target Component 7: date is subject to significant delays due to delays in Reform 1 the call for tenders. Implementation is ongoing Establishment of regional curriculum The role of the centres is to assist schools in management and school support centres implementing the changes, and they will work through mentoring, advice and consultancy activities during the process of transition to the new curriculum. In Component 7: 2022, 16 regional centres were created, in 2023 Reform 1 another 16 centres were created and in September 2023 a call for the last 8 centres was launched. Implementation is ongoing 23 Enactment of legislative changes to Current teacher training is inadequate and does not strengthen the quality of skills of teaching copy the needs of school practice. Teacher curricula and professional staff and to motivate create combinations of subjects without the possibility them to lifelong professional to specialise in broader educational areas (natural development sciences, social sciences), which is a prerequisite for Component 7: the successful implementation of the new curriculum. Reform 2 Legislative changes41 came into effect during the 2022/23 term. Implemented Increase the percentage of teachers By 31 December 2023, at least 55% of teaching and trained, especially in preparation for the professional staff should have been trained. The new curriculum, inclusive education and actual achievement of the target is still lower than digital skills expected (approximately 45%). However, this is an Component 7: estimation as the process of collecting data on the Reform 2 training received is still underway on the part of the MoED. Implementation is ongoing Increase the percentage of schools with The aim is to increase the proportion of schools with full digital input full input facilities from 30% to 90% by the end of 2026. The project documentation was approved by MoINV in April 2023, and data collection from schools Component 7: is currently underway. In the revision of the RRP, the Investment 1 target has been pushed back by one year as the investment is significantly delayed. Implementation is ongoing Introduction of performance contracts Performance contracts support the strategic goals of individual colleges, shifting away from a single model of scholarly performance to a diversified higher Component 8: education environment offering career-focused Reform 1 programs (schools of applied research). Implemented Performance contracts signed with public By the end of 2023, performance contracts have been universities signed with at least 90% of the public universities (PUs). Following the approval of the budget, the MoED signed contracts with all PUs. In January 2024, Component 8: the contracts with all 20 PUs were published in the Reform 1 Central Register of Contracts. Implemented Approval of a bonding roadmap for at The Roadmap elaborated on the timeline and the least two college units. different steps leading to the merging of the universities. The actual merging process will be supported by investments from the Revolving Fund Component 8: Facility as well as performance contracts due to direct Reform 5 transaction costs and the building of new infrastructure capacity. Implemented 41 Adoption of amendments to Laws 138/2019, 597/2003 and 131/2002, amendment to Decree 244/2019, new Decree 173/2023. 24 Conclusion of at least two calls to The overall modernisation of existing university support the strategic development of infrastructure is a priority. Investments target universities development according to needs at the level of individual schools. An important aspect is also the promotion of excellence through an investment plan linked to the process of merging university units. The Component 8: call for consortia closed in December 2023, with 4 Investment 1 consortia projects submitted. They are currently being evaluated. The call for the renovation of university buildings was launched in July 2023, with 10 applications registered so far. Implementation is ongoing Promoting internationalisation in the The measure aims to promote Slovak higher academic environment education and science abroad and supports international networking of Slovak universities. In 2024, the Ministry of Education, Research, Development and Youth of the Slovak Republic Component 10: ensures the participation of universities in the largest Investment 4 university fairs in order to present Slovak higher education abroad and to support the establishment of cooperation of Slovak universities abroad. Implementation is ongoing Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information None Planned measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Capacity building of kindergartens for The development of kindergarten capacities will the exercise of the right to enrol children create conditions for the legal entitlement to pre- Component 6: in pre-primary education primary education for children from the age of four Reform 1 and subsequently from the age of three. New normative system of financing pre- A differentiated and transparent funding system for primary education comes into force and pre-primary education will be established to ensure enrolment rates of children aged four in stability, resilience and ring-fencing of funds Component 6: pre-primary education increase allocated to education. The legislation will enter into Reform 1 force on 1 January 2025. By 30 September 2024, the enrolment rate of children aged four in pre-primary education will be at least 82%. Removing architectural barriers in The aim is to achieve the removal of architectural secondary schools barriers in 182 larger secondary schools as part of Component 6: the debarrierisation of secondary schools for the Investment 1 purpose of improving quality and inclusion in education. Completing the process of linking Completion of the formal merger process for at least universities through consortia two consortia, confirmed by new statutes for each consortium, and completion of a concrete plan leading to the legally binding establishment of a third Component 8: consortium. The statutes cover the harmonisation of Reform 5 internal quality systems, the introduction of flexible curricula, the linking of research units and other measures. 25 Renovation of college and dormitory At least 120 201 m2 of university space, including Component 8: areas university dormitories, will be renovated and Investment 1 modernised. Scholarships for talented domestic and In an effort to mitigate the brain drain, the Ministry of international students Education, Research, Development and Youth of the Slovak Republic is already conducting the third year of the scheme to support talented students. The aim is to motivate both Slovak and foreign students to Component 10: start studying at Slovak universities. In 2024, 1,570 Investments 3 and domestic scholarship holders are expected to be 4 supported, of which up to 400 will receive an increased scholarship if they enrol in a study programme preparing them for a shortage occupation. A further 100 scholarships are earmarked for students from abroad. Implementation of a project to build life Addressing life situations based on integrated situations in kindergarten, primary and eGovernment tools to reduce the administrative secondary schools burden prior to entry into maternity, primary and secondary school. At the same time, centralization of Component 17: information for parents/legal guardians, map of Investment 1 school facilities, computerization of applications for Kindergarten, Primary School, Secondary School, health certificates and register of educational achievements will be created. Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Optimising the network of schools and The legislative change will make it possible to school facilities for the needs of the 21st increase the efficiency, effectiveness and quality of century education in regional education. The measure will include transparent criteria for the founders of schools and educational establishments, as well as rules for inclusion and removal of schools and educational establishments from the network. The law will regulate the status of the State School Inspectorate (SSI) and strengthen the emphasis on support for schools and teachers. Streamlining university processes The aim is to identify processes that have proved ineffective in practice, in cooperation with university representations and the universities themselves. Subsequently, to streamline and improve these processes, including in the relationship between universities and state bodies (selection of board members, approval of long-term plans of universities, etc.). Top experts at universities Higher education in Slovakia must be focused on quality, and this cannot be ensured without better management of schools and support of top experts. The measure will modify the framework conditions and the process of filling the posts of professors and associate professors so that these positions are filled by people with the highest qualities in the field. Increase in funding for emergency cases The aim of the measure is to ensure that funds are in special educational establishments raised and made available to the special educational establishment in the event of necessary repairs. Spatial and material-technical provision The premises of special education buildings do not of special educational facilities meet the needs of children and are inadequate (both indoors and outdoors). The aim of the material and technical provision is to provide the necessary 26 infrastructure, technology and equipment, following the example of developed countries. Qualitative and quantitative staffing of The measure aims to ensure training and sufficient special education facilities staff specialised in special education. Professional support for pedagogical The measures concern the application of and professional staff and management professional, pedagogical-psychological and human of special education institutions rights standards through intensive retraining and further education. Comprehensive review of the special A comprehensive review of the system of these education system facilities will be prepared by a group of experts from several ministries, human rights organisations, the Children's Ombudsman, etc. It will also include a detailed analysis of the situation and needs of individual facilities, preparation of a strategy and vision for special education facilities in the Slovak Republic in accordance with the principles of desegregation and inclusion of education and training as well as international standards. Incentive pay in education The introduction of regional differentiation in the remuneration of education staff and making teaching in shortage occupations more attractive will lead to solving the shortage of education staff in the regions or teachers in shortage specialisations. Digital transformation of education in The aim of the reform is to support the systematic primary schools digital transformation of education and schools and to build synergistically on completed and ongoing investments in digital infrastructure. The starting point is to ensure the long-term sustainability of the position of the school digital coordinator and the legislative definition of the position of the school computer network administrator. Compulsory education for children of Compulsory education for children of foreigners, foreigners including adequate language support provided in schools, will be made compulsory and rules will be set. The reform will support the integration of persons arriving in the Slovak Republic and create conditions for successful entry into the labour market. Introduction of micro-certificates The aim of the measure is to increase the flexibility of studies, introducing a new tool for upskilling and reskilling for people in the labour market, but also for Microcredentials university students to increase opportunities to acquire specific skills. Updating the content of the State The new curriculum responds to changes in the Educational Program (SEP) for school law and their content will include sections vocational education focused on the specifics of education and training of pupils with disabilities and pupils with talents in accordance with the principles of inclusive education. At the same time, the educational standards for all fields of education will be updated. A total of 27 new SEP for vocational education will be submitted, with expected entry into force on 1 September 2024. Relevant reference points Specific recommendations of the Council of the EU for Slovakia (CSRs) 27 • CSR 2019/2: Improve the quality and inclusiveness of education at all levels and foster skills. Enhance access to affordable and quality childcare and long-term care. Promote integration of disadvantaged groups, in particular Roma. • CSR 2019/3 (Part 2,4,5): Focus investment-related economic policy on research and innovation, digital infrastructure and energy efficiency. • CSR 2020/2 (section 3,4): Strengthen digital skills. Ensure equal access to quality education. • CSR 2020/3 (Part 2): Close digital infrastructure gaps. • CSR 2022/2 (Part 1): Proceed with the implementation of its recovery and resilience plan, in line with the milestones and targets included in the Council Implementing Decision of 13 July 2021. • CSR 2022/3 (Part 5): Adjust renovation policies to accelerate and incentivise deep renovations of buildings. • CSR 2023/1 (Part 3): Preserve nationally financed public investment and ensure the effective absorption of RRF grants and other EU funds, in particular to foster the green and digital transitions. • CSR 2023/2 (Part 1): Maintain the momentum in the steady implementation of the recovery and resilience plan and, following the recent submission of the addendum, including the REPowerEU chapter, rapidly start the implementation of the related measures. Proceed with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan. • CSR 2023/3 (Part 5): Accelerate and incentivise deep renovations of public and private buildings. 2030 Agenda for Sustainable Development Goals • Goal 4: Quality education • Goal 8: Decent work and economic growth • Goal 9: Industry, innovation and infrastructure European Pillar of Social Rights • Principle 1: Education, training and lifelong learning • Principle 3: Equal opportunities • Principle 11: Childcare and support to children 28

3.3 Productivity: research, development, innovation and digitalisation Research, development and innovation are of undeniable importance for long-term sustainable economic growth, quality of life and tackling global challenges. However, the impact of the reforms launched will only be seen over time. A shift in key indicators, such as ranking in the European Innovation Scoreboard, is not yet observable in the current period. The importance of the R&D agenda is underlined by the consolidation of the supra-ministerial coordination under the Office of the Deputy Prime Minister as part of the ongoing reform of competences and supra-ministerial coordination of policy-making in this area. The implementation of the measures from the adopted National Research, Development and Innovation Strategy 2030 significantly advances the reform efforts, not only in terms of streamlining governance and processes, but also in terms of more efficient allocation of the increased support resources for the ecosystem. Under the POO measures, calls for €551 million have been launched in 2023. Digital transition is part of successfully managing reforms in this area. A key element of Slovakia's digital transition will be the successful implementation of the extensive National Digital Decade Plan. Concrete steps to support digitisation will, for example, be directed towards increasing the use of e-services by the state, developing cyber security and increasing the number of projects to develop and apply cutting-edge digital technologies. Outcome indicators for research, development, innovation and digitalisation 2030 2017 2018 2019 2020 2021 2022 2023 target DESI index SK 20 20 21 21 22 23 - 14 (ranked out of 27 EU countries) EU - - - - - - - European Innovation Scoreboard (EIS) SK 21 22 22 23 23 23 23 13* (order) EU - - - - - - - Business expenditure on research and 0,48 0,45 0,45 0,49 0,51 SK 0,56 - 1,2* development (% OF GDP) EU 1,44 1,46 1,49 1,52 1,50 - - 1,73 *Revision of objectives based on the approved National Strategy for Research, Development and Innovation. Note: the methodology for setting targets at national and European level can be found in Annex 1. The newly established Office of the Deputy Prime Minister of the Slovak Republic represents another step in strengthening the research, development and innovation (RDI) agenda. The new Competence Act, in force since February 2024, confirms the supra-ministerial coordination of public policies in this area. The Research and Innovation Authority, operating in the Office of the Deputy Prime Minister as the implementer of selected parts of the RRP42 , coordinates the activities of the reformed Government Council for Science, Technology and Innovation, and covers the coordination of the implementation of measures from the National Strategy for Research, Development and Innovation 2030. Milestones of the National Strategy achieved include the approval of the Binding Methodology for the Management, Financing and Evaluation of RDI Support and the Review of Expenditure, Competences and Staff Capacity in RDI. The methodology is a prerequisite for standardising processes in competitive funding in order to make this area more efficient from the point of view of the final beneficiaries of the support provided (researchers and innovators). The review proposed complementary measures to the National Strategy with an emphasis on consolidation of competences and funding by elaborating three possible consolidation scenarios. The increase in public resources under the approved National Strategy implies a continuation of the reforms that have been launched. One of the tools for a more efficient allocation of the increased resources are the calls for proposals from the RRP, totalling €551 million43 . These are mainly to support the involvement in the European Research Area, cooperation between academic institutions and industry, support for 42 These are Component 9 and Investment 2 Component 10. 43 Calls for proposals from the POO. 29 excellent researchers, support for research and innovation focused on digitisation and decarbonisation and financial instruments. The new draft law on research, development and innovation will include anchoring the final model for the consolidation of grant agencies and clarifying competences in other important cross-cutting policies. Developing a roadmap for the consolidation of the competences of ministries, existing agencies and institutions responsible for policy-making and funding, and anchoring it in legislation, is a necessary next reform step to stimulate research and innovation activities. This step is synergistic to other reform measures such as the Binding Methodology, the Inter-Ministerial Programme and the Preliminary RDI Support Financing Plan, which will allow for a more efficient planning of research activities from the perspective of the beneficiaries. A key element of Slovakia's digital transformation will be the adoption and successful implementation of the extensive National Digital Decade Plan (NDDP SR). This overarching strategic document will define Slovakia's current and planned development up to 2030 in the areas of digital skills, digital infrastructure, digital transformation of businesses and digitisation of public services. The NDDP SR is part of the EU's joint programme, The Road to the Digital Decade 2030 , which pursues the achievement of the EU's common digital transformation objectives. Specific measures from the RRP also contribute to the fulfilment of Slovakia's digital transformation objectives, in particular the enhancement of e-services of the state by building digital innovation centres and digital platforms, such as a platform for the development and resolution of priority life situations or a central platform for the use of IT resources (digital marketplace). The digital marketplace will enable the assessment of the value of investments in information systems by monitoring costs, submissions, transactions and returns, thereby improving the efficiency of state IT procurement. Adopted measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Call for proposals to support the Six calls were launched with a total volume of EUR 40 participation of Slovak entities in Horizon million to support the participation of Slovak entities in Component 9: Europe the Horizon Europe programmes with the aim of Investment 1 promoting internationalisation and attracting resources from abroad. VAIA challenges Implemented Calls for projects to promote cooperation Four calls for a total of €171 million were launched to between companies, academia and support collaboration between companies, academia Component 9: research organisations and research organisations (transformation and Investment 2 innovation consortia, vouchers and matching grants). VAIA challenges Implemented Calls for excellent researchers Six calls have been launched for a total of €156 Component 9: million to support excellent researchers. Investment 3 Implemented VAIA challenges Calls for thematic demand-driven 3 calls were launched for a total of €84 million to projects addressing the challenges of the address the challenges of green transformation, Component 9: green transformation decarbonisation as well as resilience and adaptation Investment 4 to climate change. VAIA challenges Implemented 30 Calls for thematic demand-driven 3 calls have been launched for a total of €113 million Component 9: projects addressing the challenges of to address the challenges of digital transition, helping Investment 5 digital transition to meet the EC's ambitions for digital autonomy. Implemented VAIA challenges Launch and implementation of financial Two contracts (including an investment strategy) tools to support innovation have been signed for the financing of financial instruments. This will result in the launch of at least two financial instruments supporting innovation in Component 9: enterprises, in particular in the early ("pre-seed") Investment 6 phase of the business life cycle and in the growth phase of enterprises. Implementation is ongoing Call to strengthen relations with the A €1.6 million call has been launched to support the diaspora and support civic initiatives strengthening of relations with Slovaks abroad as part of policies to attract and retain talent. The call is under Component 10: evaluation. Investment 2 Implemented Digitisation of public procurement The single electronic platform brings the possibility of processes through a single electronic automating the award and evaluation of contracts for platform all purchases of goods, services and works in sub- Component 14: limit contracts and partly in low-value contracts, thus Reform 3 ensuring increased transparency. Implemented Priority Life Situations Investment Plan The investment plan includes priority life situations, a description of the current and future state of processes and a list of investment actions to be implemented in offices and information systems, as well as for the deployment of the 16 life situations. The investment plan takes the form of a list of priority Component 17: e-services. Following the publication of the list of Reform 1 priority e-services by life cycle, an analysis of the service design was carried out and gaps in the plan were identified with a view to improving it. Implemented Central platform for the use of IT A central platform will increase the efficiency of state resources (digital marketplace) IT procurement. Services will be procured centrally (framework contract) and service users will be able to draw dynamically as needed from the central Component 17: platform. The IT sourcing platform was deployed into Reform 2 production in January 2024 and is subject to approval. Implementation is ongoing Increasing the number of IT experts on A further 571 IT professionals will be trained in cyber security in public administration cybersecurity in the public administration. The tender for training providers is scheduled to be launched at Component 17: the end of January/beginning of February 2024. Reform 5 Implementation is ongoing Increase in the number of eGovernment The introduction of 2 digital solutions to life situations, solutions developed and implemented - namely: 1. Losing and finding a job 2. Buying a first phase property. The solution will have features such as a unified approach to search for services, a unified Component 17: design and location for the implementation of Investment 1 services, clear navigation, an overview of the status of the processing of the application, among others. Implementation is ongoing 31 Platform for development and addressing Platform modernisation based on the principles of priority life situations low-code components that are centrally managed for all public service providers. The platform is a prerequisite for the introduction of eGovernment Component 17: solutions for life situations. The preparation of tender Investment 1 documents for public procurement is currently underway. Implementation is ongoing Digital transition of public administration The measure will optimise and automate public departments administration processes and departments. Investments will be aimed at improving the quality of public services or increasing efficiency through changes in legislation or the organisation of Component 17: processes. The planned deadline for the call for the Investment 2 digital transition of public administration departments is April 2024. Consultations with potential applicants are currently underway. Implementation is ongoing Development and construction of a The intention of the measure is to commission the supercomputer for the national computer infrastructure on the basis of functional supercomputing centre tests and a handover protocol. The investment will finance the construction of a supercomputer, with the ambition of ranking in the top ten of the world's "Green Component 17: 500" ranking of energy-efficient supercomputers. Investment 3 Details of the architecture will be provided in the feasibility study. Implementation is ongoing Increasing the number of Digital Networks of four European Digital Innovation Hubs Innovation Centres/European Digital (EDIHs) have been established in Slovakia, providing Innovation Centres services to businesses to support the uptake of new Component 17: technologies and innovations. Investment 3 Implemented Participation in cross-border digital The measure will provide support for participation in projects two cross-border digital projects from a list proposed by the EC. The involvement in the European Blockchain Service Infrastructure (EBSI) project is delayed, with the preparation of procurement documents currently underway to ensure the full Component 17: technical functioning of the EBSI. The second project Investment 3 is the involvement in the European Quantum Communication Infrastructure project, which is on schedule. Implementation is ongoing Support for projects to develop and apply The measure will support 19 projects in the cutting-edge digital technologies - first development and application of digital solutions. Calls Component 17: phase for proposals for funding are currently underway. Investment 4 Implementation is ongoing Organization of quick grant events - Organising 17 events (hackathons) to award fast hackathons grants to the most innovative solutions to today's societal challenges. Participants in the events will include, for example, start-ups, research institutions, Component 17: universities and their students or other professionals. Investment 5 The winning teams will provide their solutions to the public administration or the wider public. By the end of 2023, 6 hackathons have been organised. 32 Implementation is ongoing Securing IT systems in the public Securing 1000 IT systems to enhance cyber security. administration environment Early warning system tools will be integrated into the cybersecurity incident management system, implementing the necessary hardware/software elements, two-way encrypted communication and Component 17: alerts. The project documentation for the IT project Investment 6 has been evaluated by the UHP and the documents have been prepared for the launch of the procurement. Implementation is ongoing Introduction of application security audits The measure relates to the introduction of new or in the public administration environment revised tools for auditing the vulnerability of public IT applications in the field of cyber security. The assessment shall be carried out through penetration tests and vulnerability assessment software. Priority will be given to information systems that are part of Component 17: critical infrastructure. During January 2024, a CBA Investment 6 analysis was carried out and a draft business model for a central vulnerability management service solution was developed. Implementation is ongoing Training seniors and disadvantaged Based on the pilot project and its recommendations, people in basic digital skills the digital skills of 105 440 elderly and disadvantaged people need to be improved. This will be achieved through the completion of a training programme and Component 17: the distribution of subsidised equipment. To date, Investment 7 2554 elderly and disadvantaged people have been trained. Implementation is ongoing Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Approval of the timetable and The aim of implementing the review of informatisation implementation of the review of spending is to improve the quality of state IT, reduce informatisation expenditure the cost of its operation and increase its efficiency. Update of the The update of the implementation plan of the Revision Implementation of Informatisation Expenditure 2020-2023 was Plan of the approved by the Government on 27 July 2023. As of Revision of the the end of 2023, not all measures have been Informatisation implemented yet. The implementation report on the Expenditure implementation of the measures for 2023 will be 2020-2023 available in autumn 2024. Implementation is ongoing Implementation of measures and The aim of the measures is to improve Slovakia's recommendations under the Strategy position in the DESI index so that Slovakia is at least and Action Plan for the period 2020-2024 in the middle of the DESI ranking. However, despite to improve Slovakia's position in the the gradual implementation of the measures, Strategy and Digital Economy and Society Index Slovakia's position in the index is stagnating. Action Plan to (DESI) Information on the implementation of the Strategy and improve Action Plan was discussed at the meeting of the Slovakia's Slovak Government Council for Digitisation of Public position in the Administration and Digital Single Market in DESI by 2025 September 2023. Implementation is ongoing 33 Binding unified methodology for the The final version was approved by the Government management, funding and evaluation of Council for Science Technology and Innovation in support for research, development and September 2023. The binding methodology aims to innovation achieve clear rules for public support for research, Binding development and innovation, while aligning these methodology rules as far as possible with best practice in the EU. Implemented Review of expenditure, competences In October 2023, the Government of the Slovak and staff capacity for research, Republic took note of the information on the revision development and innovation (Review) in question. The revision will allow for an even better grasp of upcoming measures such as the inter- Revision of ministerial programme or the plan for consolidation of competences. Implemented National plan for the Digital Decade of The National Digital Decade Plan of the Slovak the Slovak Republic Republic is an umbrella document summarising the activities of the Slovak Republic to meet the EU's digital and general objectives. It presents a draft of the national objectives that Slovakia plans to Record of the contribute to the joint EU initiative. The objectives are Government divided in the document into four dimensions, which Council meeting bring together related areas of digital transition. Each dimension has a set of objectives that the EU as a whole wants to achieve. Implementation is ongoing Reform of science and research in the As part of the ongoing reform, a quality audit of the Ministry of Agriculture and Rural professional research and innovation activities of the Development of the Slovak Republic National Agricultural and Food Centre and the (MoA) National Forestry Centre was carried out in 2023. Following the audit, an Action Plan for the implementation of the Comprehensive Strategy for Research, Development and Innovation in the Ministry of Agriculture and Rural Development until 2030 is being prepared, which will elaborate on the proposed recommendations, objectives and measures. Implementation is ongoing Planned measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Support for collaborative projects At least 1770 collaborative projects between between companies, academia and R&D companies, academia and research organisations will organisations be supported. The investment is Component 9: expected to lead to the creation of at least two Investment 2 "transformation and innovation" consortia and the award of 250 innovation and 400 digital vouchers. Support for excellent researchers At least 650 excellent researchers will be supported. The investment is expected to lead to, for example, 15 large grants for excellent research teams, 425 Component 9: fellowships for researchers at different stages of their Investment 3 careers, or 200 "early stage" grants for young researchers. 34 Support for research, development and At least 27 projects will be supported to address innovation projects to address the green transition and decarbonisation. Projects will be Component 9: challenges of the green transition approved at different stages of technological Investment 4 readiness. Support for research, development and At least 140 projects will be selected under thematic innovation projects to address the schemes (e.g. demand-driven calls and/or financial challenges of digital transition instruments) for thematic projects addressing digital Component 9: transition challenges at different levels of Investment 5 technological readiness. Support for projects to develop and apply A total of at least 41 projects will be supported in the Component 17: cutting-edge digital technologies - development and application of cutting-edge digital Investment 4 second phase solutions. Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Concept for the development of security The concept will regulate the approach to security monitoring for central government bodies monitoring in the public administration and will define the strategy for building security surveillance centres in the public administration or the allocation of financial resources to meet its objectives. Simplifying citizens' and businesses' The reform will ensure the implementation of activities access to the State's electronic services to raise the awareness of citizens and entrepreneurs on how to access the electronic services of the state in the form of new navigation in the context of solving life situations. The result will be a reduction in the time needed to deal with official acts in life situations, a significant reduction in the administrative burden placed on citizens and entrepreneurs when dealing with the state and a streamlining of communication between the authorities and end users. Update of the National Concept of The concept sets the framework for the Informatization of Public Administration implementation of public administration information (NCIPA) technology projects. Ministries and central government bodies follow the principles of the NCIVS Concept in the development of IT and progressively meet its objectives. The NCIPA will be updated to reflect the forthcoming National Digital Decade Plan. Inter-ministerial programme for research, The inter-ministerial programme is established as development and innovation part of the programme budgeting of the state budget. From November 2023, individual ministries create their own sub-programmes, while the gradual start-up of ministries and institutions implementing RDIexpenditure to the new system is also foreseen in 2024. Introduction of an interim funding plan to A pre-funding plan will contribute to the predictability support research, development of support, which will lead to more interest from and innovation researchers and companies to participate in calls and thus improve the average quality of the supported project. The plan will be developed each year for the following year, with a view to the next three years, with all funders working together to ensure synergies and complementarity of support. Developing a plan to consolidate the The proposal for consolidation of competences is Draft plan for the competences of ministries, existing processed as part of the Review of Expenditure, consolidation of agencies and institutions responsible for Competences and Staff Capacities in Research, competences policy-making and support for science, Development and Innovation. The consolidation plan (Chapters 5 to 6 research and innovation itself will be addressed together with the preparation of the Revision) of the blueprint for the new RDI Act. 35 Approval of the Implementation Plan for The implementation plan breaks down the individual the measures proposed in the Review of measures into measurable tasks and assigns Expenditure and Competences on responsibility for their implementation within set Research, Development and Innovation deadlines to specific entities. New law on research, development and The law will extend the reform from the RRP aimed at innovation streamlining the system of support for RDI and will trigger relevant amendments to other laws. It will also modify the competences in the field of social innovation and the relations between the different central government bodies in the field of RDI. Changes will also affect the principles for the use, modernisation and construction of research infrastructure. Introduction of performance contracts in Performance contracts between the SAS Bureau and the Slovak Academy of Sciences (SAS) individual institutes will bring better planning of development activities and improved performance of the SAS institutes. The contracts will define specific objectives for these institutes with measurable indicators based on similar criteria as those applied to the non-teaching activities of universities. Relevant reference points Specific recommendations of the Council of the EU for Slovakia (CSRs) • CSR 2019/2 (Part 1): Improve the quality and inclusiveness of education at all levels and foster skills. • CSR 2019/3 (Parts 2, 4, 5, 6, 8): Focus investment-related economic policy on research and innovation, digital infrastructure, energy efficiency, competitiveness of small and medium-sized enterprises. Increase the use of quality-related and lifecycle cost criteria in public procurement operations. • CSR 2020/2 (Part 3): Strengthen digital skills. • CSR 2020/3 (Parts 1, 2, 4, 5): Effectively implement measures to ensure liquidity for small and medium- sized enterprises and self-employed. Close digital infrastructure gaps. Promote private investment to foster the economic recovery. Focus investment on the green and digital transition, in particular on clean and efficient production and use of energy and resources. • CSR 2020/4 (Part 2, 3): Ensure a favourable business environment and quality public services through enhanced coordination and policy-making. • CSR 2022/1 (Part 2): Expand public investment for the green and digital transitions, and for energy security taking into account the REPowerEU initiative, including by making use of the Recovery and Resilience Facility and other Union funds. • CSR 2022/2 (Part 1): Proceed with the implementation of its recovery and resilience plan, in line with the milestones and targets included in the Council Implementing Decision of 13 July 2021. • CSR 2023/1 (Part 3): Preserve nationally financed public investment and ensure the effective absorption of RRF grants and other EU funds, in particular to foster the green and digital transitions. • CSR 2023/2 (Part 1): Maintain the momentum in the steady implementation of the recovery and resilience plan and, following the recent submission of the addendum, including the REPowerEU chapter, rapidly start the implementation of the related measures. Proceed with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan. 2030 Agenda for Sustainable Development Goals • Goal 4: Quality education • Goal 8: Decent work and economic growth • Goal 9: Industry, innovation and infrastructure 36 • Goal 13: Climate protection • Goal 16: Peace, justice and strong institutions European Pillar of Social Rights • Principle 1: Education, training and lifelong learning • Principle 8: Social dialogue and worker involvement • Principle 20: Access to essential services 37

3.4 Labour market, social affairs and housing Demographic pressure coupled with persistent brain drain and low participation of selected population groups44 exacerbates the issue of labor shortages. Employers today are facing are facing historically high capacity shortages when filling vacant positions.The increasing number of foreign workers over the past year has largely offset these trends and contributed up to 0.7 p.p. to the growth of domestic employment. In this context, the measures implemented under the RRP contribute to reducing barriers and attracting skilled labour. For example, in order to support the attraction and retention of highly skilled employees and students, 3 fully functional client centres (one-stop shops) will be established to provide comprehensive services facilitating the settlement in Slovakia. Adjusting the indexation of the minimum subsistence level to reflect the rising cost of living for low-income households, as well as the unfreezing of the minimum pension, have the potential to mitigate the effects of higher inflation for vulnerable groups. However, as the level of the subsistence minimum remains significantly below the poverty line, it is necessary to reconsider the entire concept of the subsistence minimum so that its amount actually corresponds to the minimum expenditure on basic necessities of life. Outcome indicators for labour market and social affairs 2030 2017 2018 2019 2020 2021 2022 2023 target LFS employment rate SK 71,1 72,4 73,4 72,5 74,6 76,7 - 76,5* (LFS, 20-64 years) EU 71,3 72,3 73,1 72,2 73,0 74,6 - 78,0* ESA employment rate SK 43,6 44,4 44,8 43,9 43,8 44,2 - 47,4 (ESA, whole population) EU 45,8 46,4 46,8 46,1 46,8 47,6 - 47,4 Percentage of people at risk of poverty or social SK 15,8 15,2 14,8 13,8 15,6 16,5 - 13,6* exclusion (after transfers, % of population) EU 22,4 21,7 21,1 21,6 21,7 21,6 - 17,7* Employment rate of women SK 59,7 59,6 59,6 57,9 66,4 68,0 - 66,8 (LFS, 20-39 years old) EU 65,8 66,6 67,2 66,1 67,4 69,3 - 67,9 Employment rate of people with low education SK 37,3 36,3 36,0 34,0 26,9 31,1 - 49,4 (LFS, ISCED 0- 2) EU 54,3 55,3 56,0 55,3 55,4 57,5 - 56,5 Household overcrowding SK 36,4 35,5 34,1 30,1 31,2 31,8 - 16,5 (% of population) EU 17,5 17,1 17,1 17,4 17,3 16,8 - 16,5 Housing costs SK 28,5 28,1 28,7 31,0 31,4 30,3 - 27,9 (Share of total final household consumption) EU 23,6 23,4 23,4 25,5 25,0 24,1 - 23,4 Proportion of the population living in rent-controlled SK 1,5 1,2 1,4 1,6 1,9 2,7 2,8 4,2 or rent-free accommodation (% of population) EU 9,6 9,3 9,1 9,5 9,8 10,7 - 6,7 *approved national target Note: the methodology for setting targets at national and European level can be found in Annex 1. The amendment to the Law on the Subsistence Minimum adjusted the indexing mechanism of the subsistence minimum in line with the growth of consumer prices. Instead of the existing calculation mechanism45, the amendment has linked the adjustment of the minimum subsistence amounts solely to the coefficient of growth in the living costs of low-income households. This step is aimed at ensuring that the real value of the minimum subsistence amounts is maintained, especially during periods of high inflation. However, from the perspective of poverty reduction in Slovakia, this measure appears to be insufficient, as the current values of the minimum subsistence level remain significantly below the poverty line. A 44 Mothers with small children, people in the age group 60-69, members of the MRC, long-term unemployed. 45 The indexation of the minimum subsistence amounts has so far taken into account the growth rate of net cash income per person compared to the growth rate of the cost of living of low-income households. 38 comprehensive reassessment of the design of the minimum subsistence level is therefore also needed, both in terms of its level and not just its year-on-year growth. The unfreezing of minimum pension amounts has allowed them to increase automatically. The amendment restored the linking of the minimum pension to 136 % of the minimum subsistence amount for an individual in order to prevent them from falling into a state of material deprivation. From 1 October 2023, this was increased to 145% of the minimum subsistence amount, in response to inflation and the anticipated rise in the minimum subsistence level. The change also increased the percentage valuation of qualifying years of pension insurance, thus maintaining the original intention to minimise the risk of material deprivation for individual pensioners. Adopted measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Creation of one-stop shops providing As part of investments aimed at attracting and comprehensive services supporting the retaining highly skilled employees and students in integration of foreign nationals as well as Slovakia, three fully operational one-stop shops citizens from the Slovak Republic when providing services to facilitate settlement in Slovakia returning from abroad will be built by the end of 2024. The development of the concept, including the relevant legislation, is slightly delayed due to the change of the implementing authority from the Ministry of Labour, Component 10: Social Affairs and Family of the Slovak Republic (MoL Investment 1 SR) to the Ministry of the Interior of the Slovak Republic (MoI SR). The MoI SR prepared a meeting on the implementation of the investment, where the tasks for the different sections were assigned, and at the same time, the final version of the concept for establishing f the centres is being adjusted. Implementation is ongoing Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Adjustment of the minimum subsistence A mechanism for adjusting the amounts of the indexation mechanism subsistence minimum has been set, which from 1 July 2023, are multiplied only by the coefficient of growth Minimum in the living costs of low-income households. On the subsistence level basis of the same coefficient, the amounts of and the law on assistance in material need have also been adjusted, aid for material with the effectiveness of their adjustment shifted to 1 need October 2023. Implemented The unfreezing of the minimum pension The level of the minimum pension has been re-linked to the minimum subsistence level as of 1 July 2023, while the graduation of the minimum pension according to the qualifying period of pension insurance (QPI) has also been adjusted. For an Social Insurance insured person with 30 years of QPI, the level of the Act minimum pension as of 1 October 2023 is 145% of the minimum subsistence level. Implemented 39 Coordination of public policies to prevent The National Concept for Preventing and Ending and end homelessness - adoption of a Homelessness was adopted in April 2023, and the strategy and action plan first Action Plan is currently being developed, National Concept reflecting the need to create a separate entity for Preventing (organisational component) to coordinate and Ending homelessness policies. Approval of the Action Plan Homelessness by the Government is expected in March 2024. Implementation is ongoing Coordination of the lifelong learning The competences of the Alliance of Sectoral Councils system with the needs of the labour (ASR) will be strengthened to adapt training and market retraining strategies to the needs of the labour market. The ASR should be actively engaging in creating solutions to set up a lifelong learning system. The ASR, as an interest association of legal entities, Alliance of acquired legal personality in March 2023. One of the Sectoral tasks of the ASR is, for example, to assess the needs Councils of the labour market on a quarterly basis in the form of shortage occupations as well as current trends based on the needs of employers. Implementation is ongoing Simplifying the conditions for the The transposition of the EU directive into national admission of highly skilled workers to the legislation will make blue cards, which serve as labour market residence permits for highly skilled workers from third countries, more attractive. The draft law on the residence of foreigners has already been passed by the MPK and its approval would significantly simplify Draft law on the a number of conditions for the admission of such residence of workers to the Slovak labour market. This includes, foreigners for example, recognition of professional qualifications or the reduction of the salary threshold required for obtaining a blue card. Implementation is ongoing New law on lifelong learning The aim is to introduce new institutions in the field of lifelong learning, to ensure the permeability of the education system, to introduce a system of recognition and validation in the field of adult learning, to introduce a new funding scheme for adult learning through individual learning accounts and to address Action plan for a inter-ministerial coordination of lifelong learning. lifelong learning Meetings have been held with external partners on strategy the draft law and, on the basis of the outcome of these meetings, draft material is currently being prepared for the inter-ministerial review procedure. Implementation is ongoing A chance to return The aim of the project is to re-socialise and strengthen the key competences of convicts with the aim of their subsequent active integration into society. It is an innovative, comprehensive and systemic A chance to support for the target group of individuals in an return disadvataged social situation, focusing on reducing the risk of their social exclusion and improving their chances of integration into the labour market. Implementation is ongoing 40 Social agriculture The new legislation will create a legal framework for the establishment of social farms which, as social enterprises, can engage not only in primary production but also in non-productive activities, thus contributing to rural development and the Bill on certain sustainability of jobs. The draft law has already been agricultural submitted to the inter-ministerial comment prcedure registers in November 2022. submitted to the However, due to the change of the Slovak MPC Government, the Ministry of Agriculture and Rural Development will resubmit an updated version of the Act to the MPK in 2024, or will separate the issue of social farms into separate legislation. Implementation is ongoing Implementation of measures from the The Construction Act was adopted by the National Action Plan (Housing Policy of the Council of the Slovak Republic back in 2022 with the Slovak Republic until 2030) - Act on aim of fundamentally streamlining and speeding up Construction the construction process. However, the new Slovak government has decided to postpone the effectiveness46 of the adopted construction legislation in order to allow time for the necessary adjustment of Construction Act the construction rules. In its programme statement, it stated that the new construction law was unenforceable as of the effective date and its implementation would lead to significant difficulties in the preparation and permitting of construction. Not implemented Planned measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information None Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Coordination of public policies to prevent Creation of an organisational unit to coordinate and end homelessness - creation of a measures to end homelessness to ensure effective supra-ministerial unit cooperation between ministries, municipalities and non-governmental organisations. The measure is based on the National Concept for Preventing and Ending Homelessness and on the process of developing its Action Plan, in which the creation of a coordinating organisational unit is planned to be translated into an activity under the responsibility of the MoL and other interested partners. Develop workforce skills to promote The proposed measure fulfils the provisions of the employability and adaptability in the Employment Services Act, supporting the reduction of labour market the shortage of skilled labour. In 2024, project solutions will be introduced to support the acquisition and change of skills of jobseekers, with a particular focus on young people under 30 in NEET situations.47 46 The effective date is to be postponed from the original date of 1 April 2024 by at least a year, possibly a year and a half. 47 ,,Not in employment, education or training" - People who are not in employment, education or training are not in education or training. 41 Relevant reference points Specific recommendations of the Council of the EU for Slovakia (CSRs) • CSR 2019/2: Improve the quality and inclusiveness of education at all levels and foster skills. Enhance access to affordable and quality childcare and long-term care. Promote integration of disadvantaged groups, in particular Roma. • CSR 2020/3 (Part 3): Front-load mature public investment projects. • CSR 2022/2 (Part 1): Proceed with the implementation of its recovery and resilience plan, in line with the milestones and targets included in the Council Implementing Decision of 13 July 2021. • CSR 2023/1 (section 3,7): Preserve nationally financed public investment and ensure the effective absorption of RRF grants and other EU funds, in particular to foster the green and digital transitions. Reduce the risks related to household debt by supporting housing supply and the expansion of the rental market. • CSR 2023/2 (Part 1): Maintain the momentum in the steady implementation of the recovery and resilience plan and, following the recent submission of the addendum, including the REPowerEU chapter, rapidly start the implementation of the related measures. Proceed with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan. 2030 Agenda for Sustainable Development Goals • Goal 4: Quality education • Goal 8: Decent work and economic growth • Goal 9: Industry, innovation and infrastructure • Goal 10: Reduce inequalities • Goal 16: Peace, justice and strong institutions European Pillar of Social Rights • Principle 1: Education, training and lifelong learning • Principle 3: Equal opportunities • Principle 4: Active employment support • Principle 12: Social protection • Principle 15: Retirement income and pensions 42

3.5 Quality of institutions The quality of the institutional environment significantly influences the efficiency of resource allocation in the economy. In the Slovak context, barriers to development in this area are particularly evident in the form of limited enforceability of property rights, lack of trust in public institutions, and regulatory and administrative obstacles for businesses. In this context, an important milestone is the launch of a new reorganised court network, which aims at streamlining court proceedings and improving the quality of court decisions. In turn, the electronicisation and speeding up of insolvency proceedings and commercial register processes will contribute to reducing administrative barriers to business. By the end of 2024, 300 specific measures will enter into force, leading to administrative savings for businesses. Environmental impact assessments will be made faster and more efficient by linking them to permitting processes. The adoption of the planned legislative changes should bring improvements to the current mechanism for the management of seized and confiscated assets. The modernisation of information systems for international police cooperation will improve the exchange of information needed to fight international crime. The aim of building shared service centres is to strengthen and improve the performance of local authorities in providing public services to citizens. Outcome indicators for the quality of institutions 2017 2018 2019 2020 2021 2022 2023 2030 target Government by Law SK 58 65 65 64 56 62 - 49 (WGI, ranking), EU median EU 37 35 37 37 35 35 - 37 Control of corruption SK 86 80 84 74 83 83 - 48 (WGI, ranking), EU median EU 49 55 54 48 49 50 - 50 PMR index (target for 2028) SK - 1,52 - - - - - 1,30 (Index value) EU - 1,40 - - - - - 1,30 Note: The methodology for setting targets at national and European level can be found in Annex 1. The reform of the court map and the related specialisation of judges aims to make court proceedings more efficient and improve the quality of court decisions.The change of the court map is a response to the fragmentation and resulting inefficiency that characterises the Slovak court system. At the same time, the reorganisation allows for the specialisation of judges in criminal, civil, family and commercial matters in the general courts and in administrative matters in the separate administrative judiciary. In this context, the Ministry of Justice of the Slovak Republic is also introducing a system of monitoring key indicators of the new court map, which will help to identify possible weaknesses and suggest future improvements to the current set-up. Electronization and acceleration of the commercial register processes will contribute to improving the business environment. The investment of more than EUR 11 million, including funds from the RRP, will establish a modern information system that will enable entrepreneurs and courts to carry out activities related to the commercial register fully electronically. The new system will thus fully replace the existing technologically obsolete solution and ultimately speed up individual proceedings by automating the operations. A public procurement procedure for the selection of a contractor for the development of this system, including the provision of maintenance services, is currently under way, but the deadline for submitting tenders had to be extended again. A change in the relevant legislation is also being prepared to reflect the functionalities and requirements of the new information system. In order to ensure the timeliness and transparency of the data kept in the Commercial Register, the exchange of information between the various registers, databases and records kept in the Slovak Republic as well as at European level will be improved and automated. 43 The creation of shared service centres should contribute to the modernisation and improvement of local government performance. They will function as common centres providing public services for citizens in one place, serving several municipalities on the basis of micro-regions. Although a call for more than €11 million of RRP funds for this purpose was launched in June 2023, no applicant has applied so far. The Ministry of the Interior will therefore consider launching a new call that will be more attractive to municipalities and will allow them to meet the objective of building 22 centres in the least developed districts by the end of 2024. It also appears to be a problem for municipalities to secure financial coverage for the staff capacity to provide professional administrative services in the centres. At the same time, given the fragmentation of local government in Slovakia and the lack of decentralisation, it is important to prepare a comprehensive reform of public administration. In this context, the Government of the Slovak Republic in its programme declaration has declared its ambition to reorganise public administration in order to increase its efficiency and transparency. Adopted measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information 300 measures reducing administrative By the end of 2024, 300 specific measures will come burdens on businesses come into force into force, leading to administrative savings for businesses48 . The first package was approved by the National Assembly of the Slovak Republic in June Component 14: 2022. The second package, which should fulfil the Reform 1 number of 300 measures, was approved by the Government of the Slovak Republic in January 2024. Implementation is ongoing Approval of the second piece of The second part of the legislation, which mainly legislation needed to reform the concerns adjustments in connection with the insolvency framework digitalisation of insolvency proceedings, was approved by the National Assembly of the Slovak Component 14: Republic in June 2023. The first part of the legislation Reform 2 aimed at the resolution of impending insolvency is already effective as of 17 July 2022. Implemented Launch of a fully functional unified The digitisation of insolvency processes will be digitised insolvency process enabled by the establishment of a public administration IT system focused on insolvency law and winding-up processes. A tender for a supplier for Component 14: the development of this IT system is currently Investment 2 underway49 . Implementation is ongoing Introduction of a new network of courts The new reorganised court network, which is expected to speed up and increase the clearance rate of court cases, was launched on 1 June 2023. In this context, the Ministry of Justice of the Slovak Republic Component 15: (MoJ) is also introducing a system for monitoring key Reform 1 indicators of the new court map. Implemented 48 A dedicated IT application (Workflow tool) was launched in May 2023 to collect data and identify individual proposals for action, which will improve the user experience for submitters and processors. 49 MoJ received technical assistance from the EU Technical Support Instrument programme in preparing the documents for the development of the new IT system. 44 Introduction of the IT system - The modern IT system will enable entrepreneurs and Commercial Register courts to carry out activities related to the commercial register fully electronically. The project is in the process of implementation50 and the public Component 15: procurement for the selection of the supplier of the IT Investment 2 system is currently underway. Implementation is ongoing Strengthening the infrastructure to fight The Central Register of Accounts51 at the MoF will corruption and money laundering create access to data on financial flows and assets of persons under investigation. A tool (goAML software)52 for effective financial investigations will be implemented at the Financial Intelligence Unit.53 of Component 16: the Office for the Protection of Whistleblowers of Anti- Investment 1 Social Activity will be fully operational and technically equipped. Implementation is ongoing Training of police officers in financial By the end of 2023, at least 240 police officers will investigations and analytical activities participate in training, workshops and seminars with the participation of foreign and domestic lecturers (CEPOL and EUROPOL). As part of the approved Component 16: changes to the POO, the target was adjusted and was Investment 1 successfully met in 2023 by training 165 staff. Implemented Automated system for detecting traffic By the end of 2024, an automated IT system will be offences put into operation, which will make the detection of traffic offences more efficient. The contract with the hardware supplier has already been signed and the tendering procedure for the radars and the Component 16: transaction module, which has already been Investment 2 cancelled once in the past, needs to be launched as soon as possible. Implementation is ongoing Setting up shared service centres By the end of 2024, 22 Shared Service Centres will be established to help pool capacity at local level to deliver essential public (social) services. A call was Component 16: launched in June 2023 which has not yet closed. Investment 4 Implementation is ongoing Measures to improve citizens' With effect from 1 January 2024, a legal framework is information on the expected amount of introduced to improve information on future pension their future pensions from the entire entitlements from the statutory pension scheme. The pension system (the so-called orange obligation for the Social Insurance Institution to envelope) provide a pension forecast to insured persons will Component 18: arise for the first time in 2026. The amendment also Reform 1 provides that the MoL is empowered to establish a decree setting out a model pension forecast and its content. The draft decree is expected to be submitted to the MPK in the second quarter of 2024. 50 The project is currently significantly delayed. The tender for the development of the IT system was launched on 27.6.2022, but is still pending due to repeated objections to the project. 51 The launch of the IT system Central Register of Accounts is delayed. The MoF has procured a supplier of the IT system, and the system will be deployed on the released infrastructure of the MoF. A decree specifying the conditions for sending data of financial institutions to the system was issued on 15.2.2024. On the date of entry into force of the decree, the legal deadline of 6 months for financial institutions to send complete data to the system started to run. 52 The launch of the IT system is delayed. The contract for the supply of software and hardware has already been concluded. Testing is currently underway on a temporary government cloud. Once the hardware is delivered, the IT system will be moved and data configuration will take place. 53 The Office for the Protection of Whistleblowers is operational and equipped with the necessary hardware and software. Minor renovation of the premises of the Office is still in progress. 45 Implementation is ongoing Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Family business development An action plan54 for the development of family businesses will be adopted to serve as a basic framework for the promotion of family business. Draft action plan Some of the measures in the Action Plan, such as the for the creation of a focal point for family businesses and the development of modification of transfer pricing rules, have already family been implemented. Other measures, such as advice businesses in to family businesses on generational change, are Slovakia (MPK already being implemented. version 2021) Implementation is ongoing Strengthening value for money in the The Public Procurement Office is cooperating with the public procurement system OECD on a project aimed at contributing to a more efficient public procurement system in Slovakia, in particular by strengthening the application of the principle of value for money, including the most economically advantageous offers (MEAT) in public Project - procurement procedures. This should result in the Responsible development of guidelines and templates on the use Public of MEAT criteria or an action plan for training in the Procurement use of MEAT criteria. For example, the project has already published a study and a strategy to promote the use of MEAT criteria. Implementation is ongoing Implementation of measures to support The project succeeded in implementing a and optimise family law processes multidisciplinary approach (MDP) in the family law agenda in almost all courts (98%), with the participation of entities providing professional assistance (guardians, social workers, mediators, experts, etc.) in the decision-making process regarding the child. Methodological procedures for Further the application of the MDP have been developed and description of the the positions of coordinator and specialist with project psychological training have been created and standardised. The introduction of the MDP in the courts is expected to streamline and shorten court proceedings in family law matters. Implemented Enhancing the effectiveness of the The aim of the project was to contribute to the justice system by protecting and efficiency and improvement of the judicial system in empowering victims and vulnerable the field of protection of victims of crime and minors parties in family law disputes. This effort included training of Further judges and mediators, preparation of methodological description of the materials and adaptation of specialised rooms in 8 project courts. Implemented 54 The material will be resubmitted to the MPC, as the MPC failed to address all the substantive comments from the Departments in 2021. 46 Strengthening and building capacity in The project, which will be completed at the end of the provision of legal aid 2023, will result in more efficient provision of legal aid to citizens (especially to socially and economically Further excluded groups). The assistance is provided through description of the the Call Centre or the newly built offices and project consultation centres of the Legal Aid Centre. Implemented Implementation of a project to build and The project was completed by the end of 2023 and strengthen alternative dispute resolution aimed to raise awareness of alternative solutions to through mediation civil and criminal litigation among judges, Further prosecutors, court officials and the wider public, while description of the strengthening access to the application of alternative project sanctions in practice. Implemented Modernisation of private law - The aim of the recodification is to increase and recodification of company law simplify the involvement of shareholders in corporate governance, including the digitisation of decision- making processes. At the same time, the new Legislative intent legislation55 should set up effective mechanisms for of the the protection of affected entities and bring greater recodification of transparency in the identification of end-users of company law benefits. Work on the recodification was suspended in autumn 2023, but the Ministry of the Interior announces its resumption. Implementation is ongoing Humanisation of detention and The legislative changes will lead to the modernisation sentencing and humanisation of detention and imprisonment. As of 1 January 2024, an amendment to the Regulations on the Execution of Imprisonment came into force, Amendment to which, for example, eases the conditions for placing the Ordinance a convict in an open ward or simplifies the issuing the implementation of educational programmes and Regulations for therapeutic activities. The planned56 adoption of the the Execution of amendment to the Act on the Execution of Sentences Prison has been suspended for the time being due to the Sentences intentions of the Slovak Government to change the penal policy of the State. Implementation is ongoing Modernising criminal codes and The aim of the intended amendment to the Criminal Draft streamlining the state's penal policy Code was to make greater use of modern European amendment to criminal law instruments in line with the principles of the Criminal restorative justice57 . The draft amendment passed its Code submitted first reading in the National Assembly of the Slovak to the National Republic (May 2023) and was not further pursued. Assembly of the Not implemented Slovak Republic Improving the current mechanism for the The legislative changes will ensure the efficient management of seized and confiscated administration of confiscated property and its return in Bill on judicial property the framework of international cooperation. The remit cooperation in of the Office for the Administration of Seized Assets criminal matters will be reviewed in line with the transposition of the submitted to the EU Asset Recovery and Confiscation Directive. A MJC draft law on judicial cooperation in criminal matters has already been submitted to the MPK and is 55 Preparation of the new Civil Code and preparation of the Companies Act. 56 The amendment to the Act on the Execution of Sentences was scheduled to come into force in the second half of 2023. 57 Restorative justice aims to repair the harm caused by the crime. 47 expected to be adopted by the Government in May 2024. An amendment to the law on the execution of decisions on seizure of property and administration of seized property will also need to be adopted. Implementation is ongoing Adoption of legislative amendments to In line with the EU Asset Recovery and Confiscation ensure direct access of the Police Force Directive, direct online access to specific information to specific records of state bodies systems of state authorities is necessary for the Directive of the Police Force (PF) to investigate the laundering of European proceeds of crime more effectively. In 2023, Parliament and cooperation on the integration of the PF IT system of the Council into the databases of the Social Insurance Institution on asset has already started. In 2024, the MoF should provide recovery and PF with access to the Central Register of Accounts. confiscation Implementation is ongoing Implementation of information systems to In order to make the exchange of information more improve international police cooperation effective in the fight against international crime, the EU Directive relevant EU Directive will be transposed into Slovak on the exchange legislation. At the same time, the information system of information for international police cooperation (CMS-Case between law management system58 ) and the information system enforcement for searching for stolen documents and vehicles (link authorities of the to the INTERPOL database59 ) will be modernised. Member States Implementation is ongoing Establishment of a register of the The register of land use relations is a temporary usufruct of agricultural land solution60 to the fragmentation and inconsistency of land ownership in the Slovak Republic. It addresses the problem of proving land use relations and should Preliminary contain data on the land user, the right of use, the information on land used and its owner or manager. The legislative the draft law on changes will also create a legal framework for the the register of registration of existing and new land use relations and usufruct relations for the resolution of land use disputes. The draft law to agricultural has already been prepared and is expected to be land submitted to the MPK in the first half of 2024. Implementation is ongoing Speeding up and streamlining the The amendment will speed up and streamline the Amendment to environmental impact assessment environmental impact assessment process by linking the process it to the permitting processes. The amendment in Environmental question was submitted to the MPK in February 2024. Impact Assessment Act Implementation is ongoing submitted to the MPK Planned measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Modernisation of the information system The implementation of the new IT system modules Component 16: for registration of foreigners will enable the computerisation of the procedures for Investment 2 granting residence permits in order to simplify the 58 The technical basis for the modernisation of this information system is currently being prepared. 59 The Vehicle Tracing Information System is already integrated with the INTERPOL database. 60 The long-term solution, however, is land improvements, which are not scheduled to be completed until 2049. 48 procedures for the public. It will have key functionalities such as application for residence, renewal of residence, registration of residence, notification modules and electronic communication during the procedure. The need for maximum interconnectivity with the systems of the EU Member States is part of the measure. Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information New commercial register The change in legislation will reflect the new functionalities and requirements for a modern business register information system to be introduced Commercial as part of the RRP investment. In order to ensure the register timeliness of the data kept in the Commercial information Register, the regular and automated exchange of system and information between the various registers, databases related services and records kept in the Slovak Republic as well as at EU level will be improved. Reorganisation of Probation and The strategic analysis will focus on the assessment of Mediation Services - Strategic Analysis the current situation and the elaboration of alternatives for the probation and mediation service, including the specification of financial, personnel and spatial impacts. Amendment of the law on proof of origin To combat money laundering more effectively, the of property law needs to be amended in line with good examples Proof of Origin of from other EU countries. In its current form, the law is Assets Act ineffective and difficult to apply in practice. Relevant reference points Specific recommendations of the Council of the EU for Slovakia (CSRs) • CSR 2019/3 (Sections 4, 6, 8): Focus investment-related economic policy on digital infrastructure, and the competitiveness of small and medium-sized enterprises Increase the use of quality-related and lifecycle cost criteria in public procurement operations. • CSR 2019/4: Continue to improve the effectiveness of the justice system, focussing on strengthening its independence, including on judicial appointments. Increase efforts to detect and prosecute corruption, in particular in large-scale corruption cases. • CSR 2020/4: Ensure effective supervision and enforcement of the anti-money laundering framework. Ensure a favourable business environment and quality public services through enhanced coordination and policy-making. Address the integrity concerns in the justice system. • CSR 2022/2 (Part 1): Proceed with the implementation of its recovery and resilience plan, in line with the milestones and targets included in the Council Implementing Decision of 13 July 2021. • CSR 2022/3 (Part 2): Accelerate the deployment of renewables by further facilitating grid access, introducing measures to streamline permitting and administrative procedures. • CSR 2023/1 (Part 3): Preserve nationally financed public investment and ensure the effective absorption of RRF grants and other EU funds, in particular to foster the green and digital transitions. • CSR 2023/2 (Part 1): Maintain the momentum in the steady implementation of the recovery and resilience plan and, following the recent submission of the addendum, including the REPowerEU chapter, rapidly start the implementation of the related measures. Proceed with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan. • CSR 2023/3 (Part 3): Simplify permitting and administrative procedures for deploying renewables, including by establishing ‘one-stop shops’ and ‘go-to’ areas. 49 2030 Agenda for Sustainable Development Goals • Goal 7: Affordable and clean energy • Goal 16: Peace, justice and strong institutions 50

3.6 Healthcare and long-term care As in developed countries, health spending is growing faster than the Slovak economy. At present, healthcare costs in international comparison correspond to the country's wealth, but after adjusting for demographics, they are higher than in similarly wealthy countries.61 However, the performance of the Slovak health system is still lagging behind Western European health systems as well as neighbouring Central European countries. Slovakia has one of the highest death rates in the EU from causes that are treatable or preventable. There is still considerable room for improvement in public health policies to reduce premature deaths. The Slovak health system is gradually moving towards a DRG reimbursement system for five selected groups of healthcare, representing 15-20% of the total, from 2024. A key measure in the area of hospitals is also the continuation of the reform to optimise its network. Data collection on waiting times in inpatient care is currently underway to ensure the management of patient care from the beginning of 2025. In order to improve resource allocation in the health sector, a health budget board is to be established. Under the RRP, contracts have been signed for seven major investment projects, but several are behind schedule. In long-term care, the assessment of the needs of persons with disabilities in the case of entitlement to personal assistance is expected to be standardised, as is the streamlining of assessment through digitisation. Outcome indicators for health 2030 2017 2018 2019 2020 2021 2022 2023 target Life expectancy at birth SK 77,3 77,4 77,8 77,0 74,6 77,0 - 80,6 (Number of years) EU 80,9 81,0 81,3 80,4 80,1 80,6 - 82,9 Avoidable mortality through healthcare SK 173,7 165,3 163,6 168,8 - - - 119,6 (Number of deaths per 100 thousand inhabitants) EU 92,1 91,3 89,2 91,7 - - - 64,5 Preventable mortality SK 238,8 241,3 231,2 262,4 - - - 173,7 (Number of deaths per 100 thousand inhabitants) EU 160,0 158,6 154,0 180,0 - - - 119,1 Difference in life expectancy by education SK 15,6 - - - - - - 9,6 (Number of years, males aged 25, difference between ISCED 5- EU 6,9 - - - - - - 4,3 8 and ISCED 0-2) Note: the methodology for setting targets at national and European level and the source of the data can be found in Annex 1. The MoH plans to improve the budgeting process by establishing a Health Budget Council. The aim of the council is to support not only the budget preparation process, but also its continuous monitoring and evaluation during the year and, on this basis, to provide flexible answers to the question of how much money is needed in the health sector. The Budget Council will involve all institutions involved, strengthening cooperation between the MoH and the MoF, health insurers and health care providers. Resource monitoring will be complemented by health sector performance monitoring (HSPA62 ), the frameworks for which will be developed by the MoH in cooperation with the OECD and the EC under the Technical Support Facility. Comprehensive and regular evaluation is crucial for the design, development, implementation and evaluation of public health policies. The DRG system will be implemented as a reimbursement mechanism and performance contracts according to DRG output will be introduced. For 2024, the MoH, in cooperation with health insurers and hospitals, has selected five groups of care that will be reimbursed according to DRGs, which is 15-20% of hospitals' output. Specifically, these will be births, newborn care, knee and hip replacements, and selected procedures in oncology and cardiology. Procedures relating to deliveries and physiological newborns will be covered without limit. This will support quality improvement of services to attract female patients without impacting on overall financial resources. The remaining three groups of procedures will be reimbursed with a 61 Spending priorities for a successful Slovakia. 62 HSPA - Health System Performance Assessment 51 limit. These groups today represent inpatient cases for which there are longer waiting times. Exempting these procedures from the prospective budget regime and moving them under direct DRG reimbursement will support the reduction of waiting times. To ensure predictability of the financial resources needed, a maximum limit of 120% of the expected 2024 output has been set for these groups. As part of the optimization of the hospital network (OHN), the implementation of maximum waiting times and quality indicators will take place during 2024. These parts of the reform will benefit patients in particular. The OHN extends maximum waiting times to hundreds of procedures to ensure adequate and timely health care for all patients. Originally, the reform of patient management in inpatient care was supposed to start at the beginning of 2024. However, the OHN is currently in a transition period that allows level one hospitals to carry out a virtually unchanged scope of care. During this period, all second-tier supplementary programmes are optional for hospitals, which can provide them on the basis of an agreement with the health insurer without the need for approval. During 2024, the technical background for monitoring and evaluating waiting times as well as the economic impact of their introduction needs to be prepared. For the quality indicators identified by the experts, methodologies for their evaluation and gradual publication will be prepared during 2024. The quality information will feed into the annual network evaluation and will also be available for informed decision-making by patients when choosing a planned healthcare provider. Further, the network will be transformed in line with the OHN and a Network Design Commission will be established. Several capital projects of hospitals funded by the RRP are delayed against contractual schedules. The two largest projects for the construction of new hospitals in Martin and Banská Bystrica, financed from the RRP funds in the amount of EUR 611 million (excluding VAT), have not yet been awarded to a contractor. Seven hospitals have signed contracts with the Ministry of Health of the Slovak Republic on financing large investment projects in the amount of EUR 197.5 million. In the call for smaller projects (up to five million euro), 15 projects were successful with a total value of 65 million euro. The projects from the RRP are to be implemented by June 2026. The hospitals in Martin and Banská Bystrica are to be built in the rough construction stage by this date and commissioned by the end of 2028 at the latest. The vast majority of projects have already been tendered to a contractor. The overall objective is to modernise at least 1 980 hospital beds, of which at least 1 080 beds at the "rough construction" level. Adopted measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Optimisation of the hospital network - The second phase of the hospital networking exercise second phase to make it more efficient has been completed. In this phase, hospitals included in the network at the end of 2022 have been allocated complementary programmes. A Network Formation Council was Component 11: established as a second-tier body in network Reform 1 decision-making. An update of the decree regulating the categorization of inpatient health care (IHC) was prepared in collaboration with expert working groups. Implemented 52 Establishment of a central authority for The role of the body is to provide the governance hospital management (centralisation of structure for the 19 hospitals that will comprise the management of the largest hospitals) network of hospitals in the pilot phase. The Authority will manage, guide and evaluate the planning and performance of the hospitals. It will also make Component 11: recommendations for optimising expenditure and Reform 3 inventories of medicines and medical devices. The MoH is currently working on the preparation of the relevant change to the legal regulation63 . Implementation is ongoing Modification of the law on the optimal Legislative changes64 have introduced a new acute network of emergency medical services care network and a new definition of urgent care. The and a new definition of emergency new network will guarantee the availability of medical care emergency services within 15 minutes for 90% of the Component 11: population and is geographically and procedurally Reform 4 linked to the new hospital network. Implemented Support for general outpatient care Under the first phase of the pilot programme, 28 clinics - pilot programme general outpatient clinics will be established and contracts will be signed to support them. As of 24 Component 11: January 2024, 22 contracts have been signed so far. Investment 1 Implementation is ongoing Construction and reconstruction of The government directly supervised the construction hospitals - approval of the plan of St. Martin's University Hospital (UNsvM) and the F.D. Roosevelt Banská Bystrica (FNsP). The balance Component 11: of the allocation was allocated to other beneficiaries Investment 2 selected through two calls for proposals. Implemented Construction and renovation of hospitals Contractors will be notified of the award of tenders in - award of all public contracts to order to achieve the overall target of 2,200 new contractors hospital beds. The call for large capital projects to support construction is closed, with contracts signed for 7 projects. The call for small investment projects to support the construction and reconstruction of Component 11: hospitals has been closed and contracts for the Investment 2 provision of the Mechanism funds have been signed with all successful bidders. FNsP in Banská Bystrica and UNsvM in Martin are evaluating the bids from the bidders. Implementation is ongoing Increasing the provision of atrial Equipping three cardiovascular disease institutes with fibrillation surgery a navigation system to perform interventions to treat atrial fibrillation, thereby reducing its average duration65 and increasing the number of successful Component 11: interventions66 . The procurement for the necessary Investment 3 accessories has been completed and the technology is currently being installed in the various institutes. Implementation is ongoing Construction and renovation of Out of the total target (55), construction of all 55 EMS Component 11: emergency medical service (EMS) stations should start by the end of 2024. The project Investment 4 stations 63 The timely approval of the legislation remains a risk. 64 Amendment to the Health Care Act, Amendment to the Health Care Providers Act and Amendment to the Emergency Medical Services Act. 65 At least 30% compared to the baseline scenario (i.e. compared to the average duration of operations over the previous five years). 66 At least 20% compared to the pre-investment baseline (i.e. compared to the average annual volume over the previous five years). 53 documentation for specific sites is currently being finalised. Approval of the National Mental Health One of the first tasks of the newly established Programme, including the Action Plan Government Council for Mental Health is to coordinate the development of the National Mental Health Programme for 2024-2030. The material, Component 12: including the action plan, is almost finalised and is Reform 1 expected to be approved by the Slovak Government in the first half of 2024. Implementation is ongoing Introduction of provisions on Autism Definition of ASC centres and psychosocial centres in Spectrum Disorder Centres (ASCs) and the legislation of the Ministry of Health of the Slovak psychosocial centres into the current Republic. After a legal analysis, the MoH has decided legislation that there is no need to amend the decree, but an Component 12: amendment to the MoH decree of August 2022 is Investment 3-5 sufficient. Implemented Mental health staff training - phase one In the first phase, at least 84 health professionals will complete mental health training. Component 12: Investment 8 Implementation is ongoing New concept for financing social services The concept will introduce a new financing system based on a personal budget for the needy. The concept is currently in the working version stage. In January 2024, the intra-ministerial comment Component 13: procedure was completed and the subject matter Reform 1 manager together with the members of the working group are continuing to finalise the concept. Implementation is ongoing Unification of assessment activities In 2024, new legislation will come into force that will unify assessment activities, eliminate inefficiency and bureaucracy for assessors and assessors by digitising activities. At the same time, new dependency criteria will be defined to make Component 13: assessment more transparent. The Ministry of Labour Reform 2 and Social Affairs has prepared a draft law on integrated assessment activities, but its finalisation requires further consultations with stakeholders. Implementation is ongoing Reform of social care supervision A single supervisory system will be created with a head office and 8 regional branches, which will also provide supervision of informal home care. The necessary infrastructure will be provided during Component 13: 2023 and 2024 and the selection procedures for Reform 3 inspectors are currently underway. The system will be operational in 2024. Implementation is ongoing Expansion of community social care In 2023, a call for capacity expansion of community- capacities based residential services, low-capacity health and social care facilities and outpatient services was announced. In 2024, it is planned to increase the Component 13: availability of new places for each service through the Investment 1 construction of new buildings and renovation of existing buildings. Implementation is ongoing 54 Expansion and renewal of aftercare and In response to the calls for nursing home care nursing care capacities support, the first applicants to be supported in 2023 have been selected (50% of the total target of 91 supported entities). In 2024, an additional 50% of the planned target is expected to be approved. In the Component 13: framework of aftercare support, a call was launched Investment 2 in 2023, but with only partial achievement of the target67 , and therefore a call needs to be re-launched. Implementation is ongoing Expansion and renewal of palliative care In 2023, 13 mobile hospices (50% of the total target) capacities have been contracted and will be provided with new material and technical equipment. For residential palliative care facilities, the first beneficiaries will also Component 13: be contracted in 2024 to create at least 135 new beds Investment 3 (50 % of the overall target). Implementation is ongoing Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information DRG system - preparatory phase before During 2023, the collection and processing of data the launch of DRG reimbursement from hospitals and health insurers has already been implemented as part of a standardised process. Data quality has improved due to strengthened communication and education of hospitals. Further development of methodologies and updating of DRGs for the next year was also underway so that DRG reimbursement for a selected part of the institutional healthcare could be launched in 2024. Implemented Planned measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Optimisation of the hospital network - The further transformation of the network in line with third phase the OHN, which foresees the establishment of a Networking Commission and the updating of the Categorization Decree, is ongoing. There will also be the implementation of maximum waiting times for Component 11: hundreds of medical services according to the Reform 1 categorization of inpatient health care. Methodologies will be developed for selected quality indicators identified in the framework of the categorisation of inpatient health care for individual programmes. Connecting hospitals to the central IT The ERP system will enable hospitals to centralize ERP system68 control and other processes. Out of the total target of Component 11: 19 connected public hospitals, at least 5 hospitals are Investment 3 expected to be connected to the system by the end of 2024. Mental health staff training - second In the second phase, at least 168 health professionals Component 12: phase will complete mental health training. Investment 8 Measures beyond the SR Recovery and Resilience Plan 67 The overall aim is to contract refurbishment projects that will create a minimum of 650 aftercare beds. 68 Enterprise resource planning (ERP) 55 Link to further Name of the measure Further description of the measure information Health Budget Council Establishing a board to coordinate the budget preparation process as well as its ongoing monitoring and evaluation throughout the year, and to respond flexibly to how much money is needed in the health sector. Preparation of a framework for Slovak In the framework of the TSI project, in cooperation Health Sector Performance Assessment with the EC and the OECD, prepare a framework for (HSPA) HSPA in Slovakia. DRG system - launch of DRG as a The launch of DRG reimbursement in 2024 means reimbursement mechanism that 15-20% of total hospital output will be reimbursed through DRGs. Specifically, this will be for deliveries, neonatal care, hip and knee replacements, and selected procedures in oncology and cardiology. Catalogue of Procedures for Specialised Update of the existing performance catalogue for the Health Care (SOC) SOC. In the initial phase, especially for selected specialties that are currently the most underfunded, in order to rationalise and supplement the range of procedures with regard to their complexity. Relevant reference points Specific recommendations of the Council of the EU for Slovakia (CSRs) • CSR 2019/1 (Part 2): Safeguard the long-term sustainability of public finances, notably that of the healthcare and pension systems. • CSR 2019/2 (Part 2): Enhance access to affordable and quality childcare and long-term care. • CSR 2019/3 (Part 1,5): Focus investment-related economic policy on healthcare, and energy efficiency. • CSR 2020/1 (Part 2,3): Strengthen the resilience of the health system in the areas of health workforce, critical medical products and infrastructure. Improve primary care provision and coordination between types of care. • CSR 2020/3 (Part 3): Front-load mature public investment projects. • CSR 2022/2 (Part 1): Proceed with the implementation of its recovery and resilience plan, in line with the milestones and targets included in the Council Implementing Decision of 13 July 2021. • CSR 2023/1 (Part 3): Preserve nationally financed public investment and ensure the effective absorption of RRF grants and other EU funds, in particular to foster the green and digital transitions. • CSR 2023/2 (Part 1): Maintain the momentum in the steady implementation of the recovery and resilience plan and, following the recent submission of the addendum, including the REPowerEU chapter, rapidly start the implementation of the related measures. Proceed with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan. • CSR 2023/3 (Part 5): Accelerate and incentivise deep renovations of public and private buildings. 2030 Agenda for Sustainable Development Goals • Goal 3: Quality of health and life European Pillar of Social Rights • Principle 16: Healthcare • Principle 18: Long-term care 56

3.7 Green transition Russia's military invasion of Ukraine has highlighted the need to accelerate the green transition, reduce dependence on Russian fossil fuels and strengthen the resilience of the energy system across the EU. The European Commission has responded to these challenges with the REPowerEU plan. The ambition of the measures in the REPowerEU component of the Recovery and Resilience Plan is therefore to contribute to reducing dependence on fossil fuels and to a faster and wider integration of renewables in the energy mix of the Slovak Republic. Measures include, for example, simplification of permitting processes or investments in energy infrastructure, zero-emission transport and energy efficiency in buildings. The Slovakia Programme and the Modernisation Fund will also play a key role in the green transition69. The new Climate Act, which is however withdrawn from the legislative process for the time being, should harmonise Slovakia's legislative framework with that of the EU and make a significant contribution to achieving Slovakia's 2030 climate goals, including climate neutrality by 2050 at the latest70. Improving water management in the landscape has the potential to bring about drought mitigation and contribute to the restoration of ecosystems and biodiversity. Reforms and investments aimed at promoting alternative propulsion and increasing the share of environmentally friendly forms of transport can significantly help in the process of transition to sustainable transport and thus make a significant contribution to reducing CO2 in transport and improving air quality. However, in the case of rail investments, the extraordinary increase in construction costs coupled with the lengthy project preparation have delayed the achievement of some of the original targets set out in the RRP, leading to some projects being reconsidered or dropped. The forthcoming Waste Strategy and Action Plan is intended, among other things, to ensure the stability and predictability of the circular and waste management environment and thus contribute to its functioning and development. Outcome indicators for green transformation 2017 2018 2019 2020 2021 2022 2023 2030 target Average concentration of PM2.5 in the air SK 17,5 16,9 13,8 - - - - 8,6 (μg/m3) EU 14,9 14,5 12,6 - - - - 8,6 Greenhouse gas emissions SK -43,0 -41,7 -46,5 -54,2 -47,9 - - -55* (Total emissions excluding LULUCF71 , Decrease from 1990, %) EU -23,0 -25,0 -28,2 -34,3 -30,4 - - -55* Percentage of waste recycled SK 29,8 36,3 38,5 42,1 39,0 - - 60 (% of municipal waste) EU 46,3 46,4 47,2 54,4 55,5 - - 60 Share of RES SK 11,5 11,9 16,9 17,3 17,4 17,5 - 19,2** (% of gross final energy consumption) EU 18,4 19,1 19,9 22,1 21,9 23,0 - 32** *Common EU target agreed in the European Green Deal and legally anchored in the European Climate Change Act ** The target is set on the basis of the Integrated National Energy and Climate Plan 2021-2030 or the EU Regulation Note: the methodology for setting targets at national and European level is provided in Annex 1. The reforms and investments under the REPowerEU chapter of the RRP aim to support and accelerate Slovakia's ending of its dependence on fossil fuel imports from Russia, as well as tackling the climate crisis. The REPowerEU initiative is the EU's response to Russia's military aggression against Ukraine and to the subsequent effects of this war on the global energy market. Actions in the REPowerEU component therefore focus on energy saving, diversification of energy supply, accelerating the deployment of renewable energy sources (RES), developing low carbon transport and green skills training. At the same time, reforms to accelerate the authorisation of renewables or to simplify processes in order to speed them up must respect nature conservation and the interests of communities. The path to such RES development 69A list of specific measures and support schemes, including their description, allocation and estimated contribution to energy and climate targets will be provided in the Update of the Integrated National Energy and Climate Plan of the Slovak Republic. 70 Its main objective is to clarify the legal climate framework so that it is clear that the main priority of climate policy in Slovakia is precisely the accelerated achievement of low-carbon transformation and climate neutrality, increasing climate resilience and adaptation to the adverse effects of climate change. 71 Excluding interceptions in the land use and forestry sector. 57 is through quality land suitability mapping and participatory setting of acceleration criteria, including with the participation of municipalities, business and non-governmental organisations. By successfully implementing these measures, Slovakia has a unique opportunity to not only achieve the above goals, but also to increase its energy security and significantly support environmental protection. The forthcoming Strategy and Action Plan for Waste Management (SaAPOH) will contribute to the stability and predictability of the environment, which are key factors for the effective functioning of the circular and waste management. The main objectives of the SaAPOH are to increase the recycling rate of municipal waste, and to reduce the rate of landfilling. The current Waste Management Programme and Waste Prevention Programme are only valid until the end of 2025. New documents are to be adopted by that date, valid for another 10 years. The EU Waste Directive also implies that a new Food Waste Prevention Programme is to be adopted by this date. In preparing the new SaAPOH, the aim is to integrate all these documents into a single strategic document, which should have a similar structure to the RRP with clearly defined objectives, measures and other prerequisites for their implementation. The Government of the Slovak Republic is aware of the need to adopt the first ever Slovak climate law, which would bring clarity to the legal climate framework. The importance of adopting this law stems from the necessity to harmonise the legislative framework of the Slovak Republic with that of the EU, and also from the urgency of achieving the climate goals of Slovakia and the EU by 2030, including climate neutrality by 2050 at the latest. The new Climate Change Act should clearly define that the objective of climate policy is not only to reduce and adapt to the effects of climate change, but mainly to accelerate Slovakia's low-carbon transformation and climate neutrality. The measures to be implemented by the adoption of the Climate Law should include the creation of an independent body responsible for overseeing the quality of the strategic documents adopted and their subsequent implementation. The law was already prepared and submitted to the Slovak Government in 2023, but was subsequently withdrawn from the legislative process following a decision of the Economic and Social Council of the Slovak Republic. The way forward will depend on the position of the ministries concerned as well as on the level of implementation of the elements of the Climate Change Act in the ongoing update of the Integrated National Energy and Climate Plan. Adopted measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Construction of new sources of electricity The goal is to build at least 120 MW of new capacity from RES by 2026. In 2022, the MoEN announced the first call with an allocation of EUR 39 million for the construction of new renewable energy sources Component 1: (RES). In January 2024, the second call was closed Investment 1 with an allocation of almost EUR 64 million. Implementation is ongoing Modernisation of existing RES electricity The aim of the investment is to ensure the sources ("repowering") modernisation of existing production capacities for the production of electricity from RES or the production of biomethane as a result of the connection of the modernised capacities to the grids Component 1: under this measure by at least 83 MW. In 2022, the Investment 2 MoEN announced calls for the modernisation of hydropower plants (EUR 16 million) and the modernisation of biogas plants (EUR 10 million). These calls were closed during 2023. In the same 58 way, another call for the modernisation of biogas plants (EUR 26 million) was announced and closed during 2023. Implementation is ongoing Increasing the flexibility of electricity The investment will increase the capacity of the systems for higher RES integration electricity storage facilities by at least 52 MW thanks to the commissioning of new storage capacities. The scheme supports the installation of new battery capacity, electrolysis systems and an increase in the regulating capacity of hydropower plants. Meanwhile, Component 1: a combined call for support for the modernisation of Investment 3 pumped storage hydropower plants and the construction of stationary battery systems amounting to EUR 44 million has been launched. Implementation is ongoing Alignment of support mechanisms for the The reform concerns the implementation plan, which renovation of family houses maps out the different support schemes in order to harmonise them. The Implementation Plan was Component 2: signed by the Minister and published on 16 May 2023. Reform 1 Implemented Methodologies for the decision-making The aim of the reform was to develop and adopt three process of the Monuments Office of the methodologies for the classification of listed buildings Slovak Republic (MO SR) in order to increase transparency, public acceptance and speed up the decision-making processes of the MO SR. Another objective was to facilitate restoration decisions and to issue at least 1 000 building passports based on the standardised methodologies Component 2: of the MO SR for the purpose of diagnosing the Reform 2 structural and technical as well as the energy aspects of state-owned monuments. By the end of 2023, the methodologies had been published and more than 1000 buildings had been passported. Implemented Improving the energy performance of The aim of the investment is to reduce the energy family houses consumption of the houses. Currently, four calls for reducing the energy performance of houses have Component 2: been closed and a fifth call has been announced for Investment 1 December 2023. Implementation is ongoing Restoration of public historic and listed The investment aims to renovate at least 93 622 m² buildings - first phase of historic and listed public buildings by 2026, with a mandatory minimum 30% reduction in primary energy consumption. In 2022, the Ministry of Transport (MoT) Component 2: launched the first call with an allocation of EUR 180 Investment 2 million, which was closed on 31 July 2023. Implementation is ongoing Adoption of amendments to the Railway A small part of the reform has already been Act, including related decrees and implemented in the framework of the amendment to regulations the Railways Act (effective from 1.12.2021). The major part of the reform is brought about by the amendment to the Ordinance on the Construction and Component 3: Technical Regulations of Railways, which entered Reform 1 into force on 1.7.2023. The remaining amendment to the Railways Act, concerning road-rail crossings, entered into force on 1.9.2023. 59 Implemented Reform of public passenger transport The new law on public passenger transport, which entered into force on 1 January 2024, unified the standards of public passenger transport and streamlined its ordering, which was fragmented and poorly coordinated between the state, regions, cities and municipalities. An optimised rail timetable was Component 3: also introduced in December 2023. The final objective Reform 2 of the reform, which is currently being implemented, is the creation of an integrated transport system that allows travel by several modes of public passenger transport on a single ticket. Implementation is ongoing Launch of calls for new support schemes On the basis of the 2030 Intermodal Transport on the basis of the Intermodal Transport Development Concept, calls for new support Development Concept schemes aimed at the procurement of intermodal Component 3: transport units and the launch of new intermodal lines Reform 3 were announced and published in January 2023. Implemented Development of green passenger rail Within the framework of investments in the transport infrastructure development of railway infrastructure, it is planned to implement eight projects of modernisation or reconstruction of railway lines with a total length of at least 49.7 km by the end of 202672. Of the originally two large projects of the Slovak Railways, the electrification project of the line to Humenné is under construction with a completion date in 2025. The Component 3: second project (modernisation of the railway section Investment 1 Poprad - Tatry - Vydrník) has been removed from the RRP and replaced by smaller railway line reconstruction projects, which are at an advanced stage of preparation and have significantly shorter construction deadlines. Implementation is ongoing Dispatching of railway lines By the end of 2026, the dispatching of railway lines with a total length of at least 82 km will be achieved73 . The project 74, representing almost 50% of the target, is under implementation with a completion date of Component 3: August 2025. The remainder of the target will be met Investment 1 by smaller projects estimated to be completed by Q2 2026 at the latest. Implementation is ongoing Development of cycling infrastructure At least 162 km of new cycling infrastructure will be in place by 2026. In April 2022, the MoT announced the first call for cycling infrastructure development (closed in September 2022). The second call with an Component 3: allocation of EUR 36 million was closed at the end of Investment 1 January 2024. Implementation is ongoing 72 As part of the RRF update, the target was reduced from the original 69 km. 73 The original plan was 100 km. 74 Electrification of the line to Humenné. 60 Purchase of environmentally friendly The purpose of the investment is the purchase of rolling stock for passenger transport rolling stock. The objective will be fulfilled by the delivery of 6 electric trainsets for Železničná spoločnosť Slovensko, which will be deployed for the provision of regional passenger transport in the public Component 3: interest in Eastern Slovakia. The vehicles have Investment 2 already been contracted and are expected to be delivered in the first half of 2025. Implementation is ongoing Adoption of a package of measures to The reform measures aim to accelerate the promote alternative propulsion development of alternative propulsion in the transport sector. These include, for example, reform of distribution tariffs or measures to simplify and speed up the process of building infrastructure for alternative Component 3: drives. The package of measures in question was Reform 4 approved by the Slovak Government on 12 June 2023. Implemented Support for the development of The aim of the investment is to ensure faster infrastructure for alternative fuel vehicles development of passenger and freight transport with alternative propulsion and modernisation of the fleet with alternative propulsion. In 2023, calls have been launched to support the construction of charging infrastructure for electric vehicles. The preparation of Component 3: calls for the construction of hydrogen filling stations is Investment 4 planned for early 2024. The aim is to commission at least 3,029 charging points and filling stations for alternative fuel vehicles. Implementation is ongoing Termination of coal-fired power Electricity production at the Nováky power plant generation at Nováky power plant ceased in December 2023. The end of support for the production of electricity from domestic coal led to the closure of the Nováky thermal power plant, which will contribute to a decrease in total CO2 emissions in the Component 4: Slovak Republic. There will also be a transformation Reform 1 of the Upper Nitra region, which will not be dependent on coal mining. Implemented Amendment to the Integrated Pollution The legislative changes will shorten and streamline Prevention and Control Act permitting processes for integrated plants. The material has already passed the MPK in 2022. In June 2023, the National Assembly of the Slovak Republic did not approve the bill in question. The amendment Component 4: will therefore be resubmitted either separately during Reform 3 2024 or as part of the amendment to the Environmental Impact Assessment Act, which is set for September 2024 in the legislative task plan. Implementation is ongoing The operation of the industrial Projects supported by the Industrial Decarbonisation decarbonisation scheme Scheme will reduce greenhouse gas emissions by at least 1 232 926 tonnes of CO2 equivalent by 2026. In November 2022, the first call for industrial Component 4: decarbonisation under the scheme was launched. Of Investment 1 the three successful project applications, two contracts were awarded in September 2023, but the third, key applicant (US Steel) has not yet signed a 61 contract. Negotiations are currently underway with the new owner of the applicant. Implementation is ongoing Ensuring the functioning of Slovak The investments will lead to the modernisation of the Environmental Inspectorate processes equipment as well as the facilities of the Slovak related to decarbonisation Environmental Inspectorate. The new inspection vehicles will be equipped with office and measuring equipment, in particular for the inspection of air protection, methane emissions, water protection and Component 4: waste management. The investment will provide Investment 2 improvements to the Inspectorate's buildings. Procurement is currently being prepared for building modifications, and measuring equipment for the vehicles. Implementation is ongoing Reform of landscape planning The new Landscape Planning Act will improve the protection of existing landscape structures, which make an important contribution to climate change mitigation and adaptation. It will link spatial and landscape planning more closely and give greater support to climate change adaptation in the landscape outside protected areas. The Landscape Component 5: Planning Bill was submitted to the MPK in August Reform 1 2023, but not all comments have yet been addressed. The controversy process was suspended in December 2023. The MoEN announced the need for a political decision on the way forward. Not implemented Amendment of the Water Act The amendment will improve water management in the country by creating legislative space and capacity in organisations responsible for investments that will bring about improved water regulation and flood protection, mitigate the effects of drought and contribute to the restoration of ecosystems and Component 5: biodiversity. During 2023, the Water Act was Reform 2 amended several times. The last amendment to the Water Act, which entered into force on 01.04.2024, was adopted by the National Assembly in June 2023. Implemented Revitalisation of watercourses The investment aims to revitalise at least 90 km of watercourses. The revitalisation group will prepare priorities and identify the exact stretches of streams to be restored. Construction work has not yet started on any of the selected sections. In the case of the Component 5: selected section of the Morava watercourse, the Investment 1 property-law settlement is being worked on for the implementation of the construction works. The section has been declared a major investment. Implementation is ongoing Property settlements with private The aim of the investment is to settle privately owned landowners in protected areas land with an area of at least 23 640 ha. Calls for the purchase of land in protected areas, in particular Component 5: national parks, will be issued for selected areas on a Investment 1 rolling basis until 31 December 2025. Currently 319 ha of land in protected areas have been purchased. 62 Not implemented 75 Renovation and construction/acquisition The investment aims to construct or purchase at least of new court buildings 24 909 m2 of modern buildings to meet the needs of the largest courts in the judicial system and to renovate at least 111 931 m2. On 23.9.2023 a contract was concluded for the purchase of a building for the Žilina District Court. Currently, a public tender Component 15: for the contractor of the reconstruction works is Investment 1 underway. The purchase of the building for the Municipal Court Bratislava III and IV is expected in the second quarter of 2024 at the earliest. Implementation is ongoing Training of police officers in The aim is to train 100% of police officers in the newly environmental crime established unit to combat environmental crime. So far, the target has been met at 70% (over 150 persons Component 16: trained). Investment 2 Implementation is ongoing Renovation of police buildings The department plans to renovate 18 police buildings, representing almost 53,000 m2, in order to reduce their energy consumption. Currently 184 m2 are Component 16: renovated. Investment 2 Implementation is ongoing Renovation of fire station buildings The aim is to complete the construction work on at least 4 new fire stations and the renovation of at least 3 existing fire stations. The primary energy savings should be at least 30% on average. The construction Component 16: plan and timetable has been approved and the Investment 3 process of obtaining the building permit is currently underway. Implementation is ongoing Entry into force of the legislative change This legislative change will introduce an exemption to the Water Act from the obligation to pay a levy for the use of groundwater for energy purposes in the case of water-to-water heat pumps. The draft Water Act and Component 19 - the draft Offences Act were submitted to the Ministry REPowerEU: of the Environment in February 2024 for internal Reform 1.3 ministerial comments. Implementation is ongoing Establishment of a centre for Best The role of the BAT Centre will be to coordinate and Available Techniques (BAT) and ensure the acquisition, processing and exchange of provision of BAT reference documents information on best available techniques. This will be particularly relevant in the area of circularity in industrial processes and materials, or Component 19 - decarbonisation of industry and diversification of REPowerEU: energy supply. In November 2023, the BAT Centre Reform 1.4 was established at the MoEN through an organisational change. Implementation is ongoing Assessment of trajectories for The MoEN will complete and publish an assessment Component 19 - sustainable biomass use and biomass of the trajectories for sustainable biomass use in REPowerEU: supply in Slovakia Slovakia and their impacts on LULUCF-related Reform 1.5 75 The implementation of the measure has been suspended. 63 removals76, impacts on biodiversity as well as on air quality in Slovakia in the period up to 2035. Implementation is ongoing Development and promotion of A circular bioeconomy plan will be put in place to biomethane production, organic fertilisers assess the potential of the SR in biogas and and the circular bio-economy biomethane production and its effective integration into the circular cycle. The plan shall identify biogas plants suitable for conversion to biomethane Component 19 - production. In December 2023, it was approved that REPowerEU: the National Agricultural and Food Centre (NPPC) will Reform 1.6 be the direct beneficiary of the RRP funds in this context and a direct invitation to NPPC to conclude a contract with the MoEN is currently being prepared. Implementation is ongoing Establishment of methodologies and 2 The reform aims to bring into force legislation on "go- pilot areas suitable for wind energy to areas" for RES energy production and to publish a development draft methodology for establishing such go-to areas. Another objective is the creation of pilot areas suitable for wind energy development, as well as the adoption and application of the final methodology. This Component 19 - methodology must at the same time respect nature REPowerEU: conservation and community interests. In August Reform 2.1 2023, a working group was set up by the Government Office of the Slovak Republic for this purpose to coordinate relevant public administration actors and civil society stakeholders. Implementation is ongoing Publication of the Hydrogen Action Plan The Action Plan defines priorities for the development of the hydrogen ecosystem, primarily from renewable sources, based on an analysis of the Slovak hydrogen economy. In particular, the Action Plan aims to align the supply of and demand for hydrogen from renewable sources with the EU legislative framework. The Action Plan sets out the priorities for public Component 19 - funding for the different segments of the Slovak REPowerEU: hydrogen ecosystem and the deadlines for launching Reform 2.2 the relevant calls for funding. The Action Plan is also accompanied by a list of legislation to be adopted to align with the EU legal framework and a list of technical standards that support legislation in this area. Implemented Modernisation of transmission lines At least 225 km of transmission lines will be upgraded out of a total target of 250 km. The refurbishment is planned within the system operated by SEPS and will Component 19 - include upgrading components of the high-voltage REPowerEU: electricity transmission lines. Investment 1.2 Implementation is ongoing Modernisation of distribution systems The goal is to achieve at least 469 MW of cumulative additional capacity for connecting RES to distribution Component 19 - systems in Slovakia. In particular, the projects will REPowerEU: contribute to removing bottlenecks in the grids and to Investment 1.3 maximising the additional technical capacity to integrate new RES. 76 Land use, land use change and forestry sector. 64 Implementation is ongoing Launch of a support scheme to mobilise A call is being prepared with a total value of EUR 20.4 energy savings in the public sector million aimed at supporting the renovation of public Component 19 - buildings through so-called quick measures such as REPowerEU: replacement of windows or lighting. Investment 2 Implementation is ongoing Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Promoting sustainable transport Promoting sustainable transport is part of the drive towards a zero carbon economy. The Slovakia Programme has therefore allocated EUR 891 million to support sustainable multimodal urban mobility (including cycling). EUR 686 million will be directed to the development of public passenger rail transport. Additional EU funds are earmarked for the development of both water and road transport. Implementation is ongoing Act on Climate Change and Low Carbon The first-ever climate law will help align Slovakia and Transformation of the Slovak Republic the EU to achieve their 2030 climate goals, including climate neutrality by 2050 at the latest. The law passed the MPK in 2023, but was withdrawn from the legislative process following a decision by the Draft law Economic and Social Council of the Slovak Republic. submitted to the Therefore, the MoEN SR in cooperation with relevant HSR SR ministries (in particular the MoE SR, MoT SR and MoA SR) is looking for an acceptable wording for the policies of the individual ministries77 . Not implemented78 Update of the Integrated National Energy By the end of June 2024, the final version of the and Climate Plan 2021-2030 (NECP) updated NECP will be approved in the context of the Current version new objectives of the Fit for 55 package and the of the NECP REPowerEU initiative. 2021-2030 Implementation is ongoing Update of the National Biodiversity The aim of the updated NBSAP will be to create a Strategy and Action Plan (NBSAP) 2030 coherent set of activities and measures to halt the trend of biodiversity loss and accelerate the transition to a green economy that can use natural resources Current version more efficiently while protecting biodiversity. The of the NBSAP MoEN expects to submit the updated NBSAP by the 2011-202079 end of June 2024. Implementation is ongoing Reassessment of the extent and method The amended Flood Protection Act defines of protection of flood-prone areas floodplains80 and creates a regulatory tool to prohibit new construction and inappropriate activities in these Flood Protection areas. Act Implemented 77 In August 2023, a meeting was held with the MoH to consolidate the provisions of the Act with the NECP. The way forward will depend on the position of the concerned ministries as well as the level of implementation of the elements of the Climate Change Act in the updated NECP. 78 The implementation of the measure has been suspended. 79 Final evaluation of the NBSAP 2011-2020 noted by the Government of the Slovak Republic in 2021. 80 A floodplain is an area adjacent to a watercourse that is usually inundated by water spilling from the channel during floods. 65 Revision of payments and charges for In line with the Water Policy Concept, a new system The current water use of payments for the provision of water services, wording of the including charges for pollutants discharged into Slovak water, will be introduced, allowing better enforcement Government of the polluter pays principle. An amendment to the Regulation Government Regulation setting the level of charges is setting the expected to be submitted in the first quarter of 2024. amount of fees Implementation is ongoing for water use Adoption of a concept for combating The concept aims to bring about a streamlining and environmental illegal activities modernisation of control and accountability processes, including effective remediation of environmental damage. The document has passed Draft concept the MPK, but due to a number of contradictions its submitted to the approval by the Government of the Slovak Republic MPK is not foreseen. Not implemented81 Approval of the Roadmap for a Circular The aim of this strategic material is to support the Economy transition of the Slovak economy to a circular model. The proposed measures will focus on construction, food and bio-waste, economic instruments, sustainable consumption and production. A project in cooperation with the Ministry of Environment, the EC OECD study and the OECD was successfully completed in 2022, the conclusions of which will serve as analytical basis for the development of a national roadmap for a circular economy82. Implementation is ongoing Action plan for the protection of waters in The aim of the action plan is to ensure preventive and the Žitný Island Protected Water Area effective protection of the waters of Žitný ostrov, which is the most important source of drinking water to the population in Slovakia. The Action Plan was Action Plan adopted in June 2023 by the Government. Implemented Modernisation Fund - State aid scheme The scheme is intended to contribute to the reduction for the decarbonisation of industry of greenhouse gas emissions83 through support for industrial decarbonisation projects. These projects will lead to primary energy savings, reduce final energy consumption and introduce the use of advanced environmental technologies in industrial Modernisation production. The call for decarbonisation of industry Fund was announced closed on 30 June 2023, with the original allocation of the call (EUR 350 million) increased to just under EUR 470 million. An indicative list of projects was published as of 30.11.2023. Implementation is ongoing 81 The implementation of the measure has been suspended, and the Slovak Environmental Inspectorate as the gestor of the material proposes to postpone the concept, or to rework or cancel it. 82 The conclusions of the OECD study are currently being compiled into the basis for the preparation of the strategic material. 83 In line with the aim of achieving national, European as well as global climate targets under the Paris Agreement. 66 Planned measures Measures from the Recovery and Resilience Plan of the Slovak Republic Link to further Name of the measure Further description of the measure information Development of intermodal freight The investment aims to purchase 1,000 intermodal transport transport units expressed in TEU (Twenty-foot Component 3: Equivalent Unit). These will be articulated trailers, Investment 3 swap bodies, and containers. Technical assistance to speed up and With 115 additional staff, technical assistance will be improve the quality of environmental provided to speed up the environmental permitting Component 19 - permitting procedures procedures for RES. Of these 115 staff, at least 100 REPowerEU: should work directly on the issuance of permits under Reform 1.1 the EIA Act. Entry into force of legislative and The aim is to adjust the thresholds for installed Component 19 - procedural changes to speed up the capacity or depth of geothermal wells in the EIA Act REPowerEU: issuing of environmental permits to speed up the whole environmental impact Reform 1.1 assessment process for geothermal and wind energy. Pasportization of geothermal boreholes Passporting of at least 60 geothermal boreholes shall Component 19 - be carried out. This will ensure public access to REPowerEU: information on geothermal sites in Slovakia. Reform 1.2 Measures to promote hydrogen As part of the favourable conditions of the Hydrogen deployment Action Plan, the Slovak authorities will adopt legislative measures, secondary legislative measures Component 19 - and binding technical measures concerning the REPowerEU: production of hydrogen from renewable sources, Reform 2.2 standards for hydrogen storage, its industrial and energy use and its various modes of transport. Integration of RES into the electricity grid The aim of the reform is to improve the use of available capacities for connecting RES to the grid Component 19 - and their further development. The result will be REPowerEU: achieved through a set of selected mandatory Reform 2.3 measures. Modernisation of the electrical station The investment will result in the start of operation of the power station of the Slovak electrization transmission system operator (SEPS). The modernisation will include the replacement of transformers, including an increase in transformation capacity of at least 150 MVA and a changeover from the 220 kV voltage level to the 400 kV level. The Component 19 - investment will also enable remote control of the REPowerEU: power station from the Slovak Power Dispatching Investment 1.1 Centre with automatic measurement and data collection and sending them to the dispatching centre or to other SEPS databases. The project also includes the installation of compensating chokes, which will increase the ability to regulate the voltage in the transmission system. Energy Data Centre The aim of the investment is to start the production operation of the Energy Data Centre, which will Component 19 - enable to streamline and accelerate the access of REPowerEU: new participants to the electricity market (RES Investment 1.4 integration), and thus to achieve an effective securing of the rights of new entities on the electricity market. Establishment of a database and data The aim is to complete the collection of data related exchange system on the energy to energy performance certificates and building Component 19 - performance of public buildings renovation passports for at least 4,100 public REPowerEU: buildings, of which at least 1,000 have a floor area of Reform 3 67 more than 2,000 m². The data will be uploaded to a new functional data platform. Strategy for the management of The strategy for the management of public government buildings administration buildings shall define tools and procedures for: i) optimising the stock of public administration buildings and their more efficient use, ii) increasing energy efficiency, achieving energy savings and increasing the use of renewable energy Component 19 - and environmentally friendly solutions, and iii) REPowerEU: reducing the overall costs associated with the use of Reform 4 buildings. The strategy will also include a study to map the systems and tools to support renovation, together with proposals for their optimisation and recommendations on in-depth renovation and energy management practices. Restoration of public historic and listed Implementation of the renovation of at least 29,500 Component 19 - buildings - second phase m² of additional historic and listed public buildings to REPowerEU: achieve the final target of at least 123,122 m2. Investment 3 Support for the renovation of households Of the total target of 3,400 houses renovated for Component 19 - at risk of energy poverty people at risk of fuel poverty, at least 3,060 houses REPowerEU: will be completed by Q3 2025. Investment 4 Electrification of trolleybus lines The investment will bring an additional 10 km of Component 19 - unidirectional single-track electrified trolleybus lines REPowerEU: as part of the overall infrastructure. Investment 5 Purchase of environmentally friendly The aim of the investment is the delivery of 6 electric rolling stock for passenger transport sets (complete units) for Železničná spoločnosť Slovensko and 10 new unidirectional trams for the Bratislava Transport Company. The vehicles have already been procured and both beneficiaries have Component 19 - options in their contracts to deliver the necessary REPowerEU: number of vehicles. The options are expected to be Investment 6 exercised in the first quarter of 2024. The delivery of the vehicles is expected in the second half of 2025. The financial execution is likely to be split between 2025 and 2026. Skills for a green transformation The updated curriculum as well as the teacher training programme will be developed in accordance with the ESCO (European Classification of Skills, Component 19 - Competences, Qualifications and Occupations) REPowerEU: Green Skills Classification. The updated curriculum Reform 6 will be approved by the secondary vocational schools, and the teaching programme will be approved by the Ministry of Education of the Slovak Republic. Provision of school equipment and The investment aims to provide equipment and teacher training in the field of RES and adaptation of premises in 13 schools for the purpose electromobility of theoretical and practical teaching of secondary vocational school students and teaching staff. It will also enable the provision of 180 training courses for Component 19 - teachers and instructors of secondary vocational REPowerEU: schools in the field of RES and electromobility. The Investment 7 ambition of the investment is to have at least 565 third year students and graduates with a certificate of completion of the new modules in RES and electromobility at the end of the 2025/2026 school year. 68 Communication activities related to the Conduct six communication campaigns to support the implementation of the REPowerEU implementation of the REPowerEU chapter thematic chapter areas: i) energy and RES permitting processes, ii) building renovation and management, and iii) skills for green transformation. To this end, NIKA will adopt a Component 19 - communication strategy on the basis of which REPowerEU: communication activities and campaigns will be Investment 8.1 implemented. NIKA will recruit eight additional staff for this purpose for the period from Q3 2023 to Q2 2026. A dedicated behavioural communications team will also be established within NIKA. Measures beyond the SR Recovery and Resilience Plan Link to further Name of the measure Further description of the measure information Waste management strategy and action The Strategic Framework and Action Plan will plan propose objectives and actions for a 10 to 15 year period. The main objectives of the strategic framework are to increase the recycling rate of municipal waste, and to reduce the rate of landfilling. Amendment of the Nature and The aim of the amendment is primarily to promote the Landscape Protection Act protection and restoration of terrestrial ecosystems Current text of and to ensure their sustainable use. The amendment the Nature deals with sustainable forest management, Conservation Act combating desertification, and halting biodiversity loss and reverse land degradation. Amendment of the Environmental Fund The Act will be amended in order to make the Act provision of support from the Environmental Fund Current version more efficient and to respond more flexibly to the of the requirements of the Ministry of the Environment of the Environmental Slovak Republic, EU legislation and beneficiaries of Fund Act support in the field of environmental protection. Social Climate Fund The Fund aims to address and compensate for the social and distributional impacts on the most vulnerable groups of population resulting from the Regulation of the introduction of emissions trading system (ETS 2) in European two new sectors (buildings and road transport) from Parliament and 2027. The implementation of the Fund is expected to of the Council last from 2026 until 2032. In order to benefit from the Fund, each Member State must draw up a social and climate plan and submit it by the end of June 2025. Relevant reference points Specific Council of the EU Recommendations for Slovakia (CSRs) • CSR 2019/3 (section 3,5,8): Focus investment-related economic policy on transport (notably on its sustainability) and energy efficiency. Increase the use of quality-related and lifecycle cost criteria in public procurement operations. • CSR 2020/3 (sections 5,6,7): Focus investment on the green and digital transition, in particular on clean and efficient production and use of energy and resources, sustainable public transport, and waste management. • CSR 2022/1 (Part 2): Expand public investment for the green and digital transitions, and for energy security taking into account the REPowerEU initiative, including by making use of the Recovery and Resilience Facility and other Union funds. • CSR 2022/1 (Part 4): Make the tax mix more efficient and more supportive to inclusive and sustainable growth, including by leveraging the potential of environmental and property taxation. 69 • CSR 2022/2 (Part 1): Proceed with the implementation of its recovery and resilience plan, in line with the milestones and targets included in the Council Implementing Decision of 13 July 2021. • CSR 2022/3: Reduce overall reliance on fossil fuels and diversify imports of fossil fuels; accelerate the deployment of renewables by further facilitating grid access, introducing measures to streamline permitting and administrative procedures; and modernising the electricity network; reduce reliance on natural gas in heating and industry; adjust renovation policies to accelerate and incentivise deep renovations of buildings. • CSR 2023/1 (section 3,5): Preserve nationally financed public investment and ensure the effective absorption of RRF grants and other EU funds, in particular to foster the green and digital transitions. Make the tax mix more efficient and more supportive of inclusive and sustainable growth, including by leveraging the potential of environmental and property taxation. • CSR 2023/2: Maintain the momentum in the steady implementation of the recovery and resilience plan and, following the recent submission of the addendum, including the REPowerEU chapter, rapidly start the implementation of the related measures. Proceed with the speedy implementation of cohesion policy programmes, in close complementarity and synergy with the recovery and resilience plan. • CSR 2023/3: Reduce the economy’s reliance on fossil fuels, in particular natural gas in industry and heating, and diversify imports of fossil fuels. Accelerate the deployment of renewables, particularly for wind, solar, geothermal and renewable gases, in line with relevant sustainability criteria; Simplify permitting and administrative procedures for deploying renewables, including by establishing ‘one-stop shops’ and ‘go-to’ areas. Modernise the electricity network and make the procedures for connecting renewables to the grid more efficient and less burdensome. Accelerate and incentivise deep renovations of public and private buildings, address energy poverty through housing renovations for low-income households, and step up policy efforts aimed at the provision and acquisition of skills and competences needed for the green transition. 2030 Agenda for Sustainable Development Goals • Goal 2: Zero hunger Goal 11: Sustainable cities and communities • Goal 3: Good health and well-being Goal 12: Responsible consumption and production • Goal 6: Clean water and sanitation Goal 13: Climate action • Goal 7: Affordable and clean energy Goal 14: Life below water • Goal 9: Industry, innovation and infrastructure Goal 15: Life on land 70 4 EU cohesion policy The EU's cohesion policy is one of the fundamental pillars of the European Union's functioning and one of its main investment instruments. Its aim is to support projects that help to eliminate social and economic disparities in the development of regions, increase their competitiveness and improve the quality of life of all citizens. Financial assistance is primarily used to increase economic growth and reduce social, economic and environmental inequalities between countries and regions. In 2022, the Partnership Agreement for 2021- 2027 and the Slovakia Programme were approved by the Slovak Government and the EC, which constitute the basic framework for the disbursement of resources under the fourth programming period. Programme period 2014-2020 Under the 2014-2020 programming period, almost 90% of the total of almost €17 billion84 has been spent by the end of 202385 . The total volume of contracted projects reached 108.5% of the total allocation. Measures have been taken to speed up implementation while maintaining transparency and value for money. As requested by the Prime Minister, the monthly contracting and spending plans of the line ministries were also requested and submitted in January 2023 and were regularly reviewed on a monthly basis in 2023. In 2023, the departmental contracting plan was 114% executed and the disbursement plan was 94% executed.86 Table 4: Status of disbursement and contracting of projects as at 31 December 2023 Managing Allocation from EU sources Contract rate Disbursement in million Operational programme Authority in million euro in million euro (%) euro (%) 3 250,4 2 850,7 Human Resources MoL 2 996,5 (108,5) (95,1) 8313,9 5 513,6 Integrated infrastructure MoT 6 009,9 (138,3) (91,7) 2 947,4 2 197,4 Environmental quality MoEN 2 832,5 (104,1) (77,6) 2 304,4 1 864,7 Integrated regional OP MoINV 1 935,7 (119,1) (96,3) 363,5 340,5 Efficient public administration MoI 354,7 (102,5) (96) 159,1 158,1 Technical assistance MoINV 159,1 (100,0) (99,37) 4,7 2,6 Fisheries MoA 7,7 (60,4) (33,7) 92,4 81,5 Interreg V-A SK-CZ MoINV 90,1 (102,6) (90,4) 75,2 62,9 Interreg V-A SK-AT MoINV 75,9 (99,1) (82,8) 39,4 39,1 PS INTERACT III BSK 39,4 (100) (99,3) 16 331,9 13 111,1 Total 14 501,5 (112,6) (90,4) 1 502,2 1 421,6 Rural Development Programme 87 MoA 2 276,1 (82,3) (62,5) 18 204,0 14 532,6 Total 16 777,6 (108,5) (86,6) Source: MoF, ITMS, MoA, MoINV The implementation of standard EU funded projects was negatively affected by the onset of the COVID-19 pandemic, but the uncommitted funds helped to mitigate the effects of the pandemic. In 84 All operational programmes, including the Rural Development Programme. 85 Disbursement in the form of approval of summary payment requests continues in the first half of 2024. Managing authorities have the possibility to submit summary payment requests to the MoF by the end of April or May. Beneficiaries of EU funds had to actually complete their projects and pay the last invoices to suppliers by 31.12.2023 at the latest. 86 This is an assessment of the annual contracting and spending plans of the ROs for 2023. The table "Status of spending and contracting of projects as of 31 December 2023" shows the cumulative values for contracting and spending of the individual operational programmes. 87 The Rural Development Programme is one of the pillars of the Common Agricultural Policy and is not an integral part of the Cohesion Policy. 71 2020, MoINV, in collaboration with the MoF, prepared a paper88 proposing COVID-19 measures, for which over a billion of uncommitted EU funds were allocated89 . Another measure to eliminate the impact of the pandemic was the creation of the REACT-EU support system, which increased the total allocation of available resources by EUR 722.25 million. At the end of 2023, over EUR 786 million (108.94%) of this allocation had been contracted and approximately EUR 512 million (70.90%) had been spent. The ongoing military aggression of the Russian Federation and the resulting migratory flows have compounded the negative effects of the pandemic on Slovakia's economy. To address the migration crisis related to the conflict in Ukraine, the EC adopted a comprehensive aid package called "Flexible Assistance to Territories" (FAST-CARE). Slovakia used the EU funds available at the time, amounting to more than EUR 300 million, to cover these expenses related to the initial reception of refugees and their integration into society. Of the available allocation of 339.5690 million euro, over 352 million euro (103.83%) had been contracted and approximately 277 million euro (81.65%) had been disbursed as of 31.12.2023. In order to address the problems linked to the significant increase in energy prices due to the conflict in Ukraine, the European Commission has adopted the SAFE initiative. This initiative has made it possible to provide assistance to vulnerable households to cover the costs of energy consumption, thus making use of the remaining unspent resources of the 2014-2020 EU funds. On the basis of the analysis, it was the compensation of increased gas or electricity supply costs for vulnerable households that was identified as the most appropriate support measure under the SAFE initiative. SAFE resources were used to reimburse the compensation of the difference between the market price of energy and the limit set by the Government of the Slovak Republic, which was provided to energy suppliers from the state budget during 2023. Based on the last update as of 23 February 2024, the allocation amounted to EUR 1.033 billion. By the end of 2023, over EUR 990 million (95.80%) of the above amount had been contracted and approximately EUR 500 million (48.38%) had been spent, with a forecast of EUR 427 million to be spent through the Operational Programme Environmental quality in March. The SAFE initiative has succeeded in reducing the financial risks and negative impacts on the state budget resulting from compensation measures in the energy sector. The maximization of measures to minimize the decommitment by MoINV as the department responsible for the coordination of EU funds and the failure to take risks into account had the unintended effect of exceeding the tolerable limits of over-contracting and a real over-expenditure of EU funds in the Integrated regional OP with a negative impact on the state budget. Programme period 2021-2027 The Slovakia Programme 2021-2027 is a key investment instrument for the growth of the living standards of the population and increasing the competitiveness of the Slovak Republic. The programme sets out the conditions for the use of EU cohesion policy funds for the 2021-2027 programming period. The programme makes investments from the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund and the Fair Transformation Fund. The programme thus replaces the previous 6 operational programmes that operated in the Slovak Republic for EU funds in the 2014-2020 period. The intention of creating a single programme was to respond more easily and quickly to current geopolitical, economic and social challenges. However, the enormous number of priorities in the programme with no obvious concentration of resources, the complexity of the processes and the broad structure of 88 Full text of the material. 89 Support for maintaining employment: €410.26 million (OP HR), support for the health system: €204.30 million (IROP, OP II), support for micro, small and medium-sized enterprises: €512 million (OP II), support for the components of the integrated rescue system: €51.00 million (OP EQ) and other measures to mitigate the impact of COVID-19: €109.30 million (OP HR). 90 During the year 2023, the allocation within the OP HR was increased by EUR 24.3 million. 72 providers, as well as certain limitations in terms of the general EC legislation, eliminate the integration objectives, as evidenced, for example, by the delay in implementation compared to neighbouring countries. The Integrated Territorial Investment (ITI) mechanism aims to address the complex challenges of diverse territories. It is a pilot approach for multi-level strategic planning and prioritisation of investment support, based on best practice in other EU Member States, replacing traditional demand competitions between municipalities. Under the Slovakia 2021-2027 Programme, 18.5% of funding is allocated through the ITI. The project plans with the greatest responsiveness to the main territorial challenges and specific needs identified in the approved Integrated Spatial Strategies are implemented through the ITI. The main challenge is to fine-tune the ITI system in such a way that the Partnership and Cooperation Councils ensure territorial development in a participatory manner and contribute through integrated solutions to the proper implementation of cohesion policy objectives within Slovakia. Out of the total allocation of almost EUR 13 billion, only 75 calls with an allocation of EUR 2.3 billion (18.23%) have been announced by the end of 2023. In comparison, the Czech Republic has contracted €5.28 billion out of a total allocation of €20.67 billion in the same period, representing 25.6% of the allocation. In the fourth year of implementation, the uptake in the Slovak Republic is at a low level. The situation is therefore critical and requires the adoption of systemic, operational but also strategic measures to eliminate the risk of decommitment in 2025. The process of crisis management will be ensured through monitoring of the so-called "Euro-governments", which will cover the issue of EU funds and funds from the RRP in regular cycles, as well as through intensified coordination of individual implementing intermediary bodies in a systemic regular mode. The topic of the discussions will be not only the monitoring of implementation, but in particular measures to streamline the procedural and legislative environment, including increasing the efficiency of cooperation between the responsible state and public institutions. However, these measures will be implemented at a time of necessary consolidation of public finances and the stimulus effect of European resources will be weakened by this. Table 5: Status of implementation of the Slovakia 2021-2027 Programme as of 31 December 2023 Disbursement - Contractability of Challenges beneficiary level projects Allocation (advance payments paid) Policy Objectives of the Slovakia EU source EU objective Programme in million Allocation EU EU source Number source in euro Number source in in million Number of of million of calls million euro euro applications projects euro (%) (%) (%) A more competitive and 68,07 ( 5, 48 0 1 1 890,15 12 2 - smarter Slovakia 3,60) (0,29) (0,00) 742,99 0 0 2 A Greener Slovakia 4 197,55 12 - - (17,70) (0,00) (0,00) 30,97 0 0 3 A more connected Slovakia 2 003,13 1 - - (1,55) (0,00) (0,00) A more social and inclusive 1 141,1 619 74,45 4 3 251,6 32 11 13 Slovakia (35,09) (19,04) (2,29) 34,3 0 0 5 Europe closer to citizens 400,41 1 - - (8,57) (0,00) (0,00) 217,04 0 0 FST Fair Transformation Fund 440,66 6 - - (49,25) (0,00) (0,00) 60,97 0 0 TP Technical assistance 410,23 11 - - (14,86) (0,00) (0,00) 2 295,43 624,48 74,45 Total Programme Slovakia 12 593,74 75 13 13 (18,23) (4,96) (0,59) Source: ITMS2014+ (2021-2027) A mid-term review of the Slovakia Programme 2021-2027 is planned for 2024. Slovakia is interested in making use of the cohesion flexibilities included in the STEP Regulation, which is part of the mid-term review 73 of the EU's Multiannual Financial Framework 2021-2027. The approval of the STEP Regulation creates the conditions for the preparation of a specific review of the Slovakia Programme with the aim of strengthening the development and production capacity of critical technologies of industry and reducing the risk of potential decommissioning. Slovakia plans two revisions of the Slovakia Programme in the next 12 months. The first technical revision will use the possibilities of the so-called General Regulation to modify the programmes in the framework of transfers and related changes which are not considered to be substantial and do not require a Commission decision to approve the programme modification. The second will be a systemic review, taking into account the priorities of the Government as set out in the Programme Declaration, the results of the mid- term review of the implementation of the Slovakia Programme and the flexibilities allowed by the approved STEP Regulation. Coordination of synergies across different mechanisms and instruments is essential to achieve added value of EU funds and avoid double funding of operations. MoINV continued to assess calls from the Slovakia Programme, RRP and other support instruments in line with the system of implementation of synergies and complementarities. A total of 176 calls were assessed for synergies and complementarities in 2023. As an additional element in assessing the elimination of the risk of potential duplications in the financing of operations, MoINV introduced a risk flag, which is assessed on the basis of defined dividing lines and potential overlapping of activities, eligible applicants, eligible territory, or other assessed parameter of the draft calls. MoINV plans to jointly coordinate with the Office of the Government of the Slovak Republic (NIKA) the announced changes in the Slovakia Programme and the RRP, in the interest of greater efficiency of the funds spent and at the same time with a tangible synergistic and complementary effect. 74 5 The institutional framework of the NRP The NRP provides a summary report on the status of implementation of the measures by which the SR responds to the EU Council's specific recommendations for Slovakia, irrespective of the source of funding for these reforms and related investments. The basic orientation of the measures included in the NRP is also determined by the sectoral strategies and the comprehensive prioritisation approach at national level. To this end, the Institute of Financial Policy (IFP) ensures the identification of sources of growth underperformance in the Slovak economy and reviews them annually. The measures91 included in the NRP should have a clearly defined objective and delivery method. Analytical departments in individual ministries are working on the development of proposals for quality reform measures, aligning them with the results of expenditure reviews and specific recommendations of the EU Council. Financing of the measures in the NRP should be ensured within the established limits of expenditure and staffing of the state budget chapters. Important sources for the implementation of the measures are the funds from the RRP and EU funds earmarked for the programming period 2021-2027. The obligation to prepare and publish NRP is imposed by European legislation. At EU level, the NRP is a key part of the European Semester cycle and, alongside the Stability Programme, plays a central role in facilitating collective monitoring and a multilateral debate on policy challenges and how to address them. The NRP charts the status of the CSRs (from 2019, 2020, 2022 and 2023) and also reports on annual progress in the implementation of the CSRs, including the roadmap for the implementation of actions in the coming period. The NRP also monitors progress towards meeting the 2030 Agenda for Sustainable Development and the principles of the European Pillar of Social Rights. The process of preparation of the NRP is completed with the approval of the Government of the Slovak Republic. The coordinator of the document preparation is the Ministry of Finance of the Slovak Republic and in the whole process it cooperates closely with the National Implementation and Coordination Authority (NIKA), which, as the responsible authority at the national level, monitors and evaluates the status and results of the implementation of the OPD. Important assistance is also provided by MoINV, which oversees the translation of reform priorities into investment instruments under the EU Cohesion Policy. The ministers responsible for the economic, social, education, health and environmental agendas are primarily involved in the preparation and implementation of the NRP. The remaining ministers, Government Plenipotentiaries and representatives of other government departments are involved in the development of the document in the framework of cooperation in selected areas. At the same time, the NRP is submitted as non-legislative material to the standard inter-ministerial comment procedure, which gives representatives of regional governments, social partners, the third sector or the public the opportunity to submit comments on the proposed text. 91 The overview of actionscounted refers to actions that have been implemented or should have been implemented in 2023 or in the first quarter of 2024. The overview of actions planned refers to actions that are expected to see significant progress in terms of implementation in 2024 or in the first quarter of 2025. 75

Annex 1: Targets and indicators Methodology for setting European and national targets in 2030 It is advisable to set targets for the identified key indicators and to regularly assess their achievement. In the past decade, part of the targets were set by the EC in the framework of the Europe 2020 strategy. These targets have been regularly counted down in the NRP as part of the Country Specific Recommendations countdown. After 2020, the EC has not yet set any target values for strategic indicators for countries, with exceptions (e.g. green energy and environment targets or employment targets). However, for economic and budgetary policy setting, it is advisable to set targets, to count them regularly and to take the necessary corrective measures in time in case of unwanted deviations from the trajectory to the target. The targets were first set for the 2022 NRP following the methodology explained in detail in the Reform Compass analytical document92. In NRP 2024, these target values are adopted without change93 . The targets set by the methodology used fill the space in the absence of target values from the EC. The key principle is the combination of ambition and realism, so that in the case of a below average position of Slovakia, the progress of countries with the highest rate of improvement over the past period in a given area is used to set the national target. This means that an ambitious target can be considered achievable. Targets are proposed for a horizon of ten years until 2030. The calculation first estimates the EU27 average in 2030. Where the EC has set long-term targets for 2030 in strategic indicators, these are used. Otherwise, for the weighted EU27 average, the trend is extrapolated based on the development over the previous decade 2010-202094 . Exceptions are indicators with a shorter time series or with a lower reporting frequency (e.g. PISA since 2006, DESI since 2015). In the absence of a weighted average for the EU27, e.g. due to fewer countries entering the calculation, an arithmetic average is used (e.g. PISA). For the indicators that determine the ranking, the values of the indicators for each country are extrapolated and then superimposed in the ranking. In a second step, target values are set for the national targets. Three situations are considered. If the latest available figure by 2020 for Slovakia is above the weighted European average, the target is to maintain an above average position. In this case, the extrapolation for Slovakia replicates the growth for the EU27, taking into account the convergence of the countries by adjusting the resulting value for Slovakia by the share of standard deviations at the first and last time points. At the same time, if there is a national target set by an approved strategy paper, this is used instead of extrapolation. If Slovakia is lagging behind the EU27 average, the national target will be set on the basis of the past performance of the five most improving economies in the EU. The average growth of the five fastest improving economies over the last decade is used to set the target for Slovakia, whereby if the European average is reached during the trajectory, further growth follows the EU27 average dynamics95. Taking advantage of the trend of improvement in the most advanced countries presupposes that their experience is transferable to the Slovak context. This can be realised, for example, by further analysis of the specific 92 At the time of the preparation of the 2022 NRP, the methodology was subject to the review process of the Reform Compass analytical document. The analysis was approved by the Expert-Methodology Committee and the document was officially published in August 2022. NRP 2024 adopts the methodology approved in this document. A detailed description of the methodology together with data and calculations for each indicator is published on the IFP website. 93 With the exception of the targets for the ranking of the SR in the EIS and Business R&D expenditure as a share of GDP. The targets have been revised in the light of the approval of the National Strategy for Research, Development and Innovation 94 Extrapolation in this case uses a multiple of the average annual improvement in the absolute value of the indicator. This is the absolute improvement in the units in which the indicator is measured, mostly improvement in percentage points. 95 The exception are the indicators in the long-term sustainability of public finances, for which the targets are set by the Constitution (debt) and the recommended value (S2). 76 policies implemented by these countries and their possible transferability. This key step in setting national targets combines Slovakia's ambition to improve and catch up with the European average, and at the same time this ambition is offset by the realism of achieving these targets based on concrete data. The third step is to determine the trajectory of reaching the target by interpolation. While this step is not necessary for the purpose of setting targets in the context of the NRP, it is important for future countdowns. At the same time, it is not recommended to update the targets depending on future developments; rather, it is recommended to use the evolution of the values in the indicators to reflect on the success of the policies adopted and implemented.96 . If the target is achieved, resources and reform efforts can be redirected to areas still showing underperformance. In setting the trajectory, the first year is set to be in line with the expected effectiveness of the implementation of reform measures. At the same time, the ministry in charge of the indicator (possibly in cooperation with other ministries) may propose a justified change in the trajectory, while maintaining the value of the target. The interpolation at this stage is linear from the first year of the expected effectiveness of the implementation of the measures in the area. Last but not least, it is important to monitor the trajectory of the indicators, i.e. whether they are moving towards or away from the target values. To assess the trend, we take inspiration from the 2030 Agenda methodology and use the method of comparing the trajectory necessary to reach the target (Compound Annual Growth Rate - CAGRr) with the actual trajectory (CAGRa)97 . Then the value of the share (CR) is compared with the semaphore for a qualitative assessment of the achievement. If the CR value is equal to or greater than 0.95 we speak of significant progress (green), if between 0.5 and 0.95 progress is moderate and acceleration of reform efforts is needed (yellow), below 0.5 and above -0.1 limited or no progress (orange) and below -0.1 it is a deterioration in the area (red). Table 6: Overview of the indicators used 2030 2016 2017 2018 2019 2020 2021 2022 2023 Trend Target Government by Law SK 67 58 65 65 64 56 62 - 49 ↗ - Quality of institutions (WGI, ranking), EU median EU 36 37 35 37 37 35 35 37 Control of corruption SK 82 86 80 84 74 83 83 - 48 → (WGI, ranking), EU median EU 49 49 55 54 48 49 50 - 50 PMR index (target for 2028) SK - - 1,52 - - - - - 1,30 ↘ (Index value) EU - - 1,40 - - - - - 1,30 DESI index SK * 20 20 21 21 22 23 - 14 ↘ (ranked out of 27 EU countries) EU European Innovation Scoreboard Productivity SK 21 21 22 22 23 23 23 23 13 (EIS) ↘ (order) EU Business expenditure on research SK 0,40 0,48 0,45 0,45 0,49 0,51 0,56 - 1,2 and development ↗ (% OF GDP) EU 1,39 1,44 1,46 1,49 1,52 1,50 - - 1,73 96 The exception would be later European targets, which would be agreed at national level. 97 Technical manual for measuring SDG progress. 77 LFS employment rate SK 69,8 71,1 72,4 73,4 72,5 74,6 76,7 - 76,5 ↗ (LFS, 20-64 years) EU 70,1 71,3 72,3 73,1 72,2 73,0 74,6 - 78,0 ESA employment rate SK 42,7 43,6 44,4 44,8 43,9 43,8 44,2 - 47,4 ↗ Labour market and social affairs (ESA, whole population) EU 45,1 45,8 46,4 46,8 46,1 46,8 47,6 - 47,4 Percentage of people at risk of SK 17,1 15,8 15,2 14,8 13,8 15,6 16,5 - 13,6 poverty or social exclusion → (after transfers, % of population) EU 23,7 22,4 21,7 21,1 21,6 21,7 21,6 - 17,7 Employment rate of women SK 58,8 59,7 59,6 59,6 57,9 66,4 68,0 - 66,8 ↗ (LFS, 20-39 years old) EU 64,6 65,8 66,6 67,2 66,1 67,4 69,3 - 67,9 Employment rate of people with SK 35,9 37,3 36,3 36,0 34,0 26,9 31,1 - 49,4 low education ↘ (LFS, ISCED 0- 2) EU 52,5 54,3 55,3 56,0 55,3 55,4 57,5 - 56,5 Proportion of children in pre- SK 73,4 74,9 77,6 77,8 78,1 77,4 - - 94,6 primary education ↗ (from 3 years to the beginning of EU 92,5 92,5 92,3 92,9 93,0 92,5 - - 94,6 compulsory primary education) PISA SK - - 466 - - - 458 - 473 ↘ (grade point average in reading EU - - 484 - - - 473 - 481 literacy, maths and science) Percentage of pupils below basic SK - - 31,4 - - - 35,4 - 28,0 level in reading ↘ Education (PISA) EU - - 22,5 - - - 26,2 - 21,3 Percentage of young early school SK 7,4 9,3 8,6 8,3 7,6 7,8 7,4 - 6,0 leavers ↘ (% in the 18-24 age group) EU 10,6 10,5 10,5 10,2 9,9 9,8 9,6 - 6,0 Average ranking of the best SK 651 651 668 784 835 834 784 851 706 university in TOP rankings ↘ (average ranking in Times, Shanghai EU 384 316 319 336 334 353 356 421 353 rankings and QS), EU median Percentage of people SK 2,9 3,4 4,0 3,6 2,8 4,8 12,8 - 7,0 participating in adult education ↗ (age 25-64; last 4 weeks) EU 10,3 10,4 10,6 10,8 9,1 10,8 11,9 - 10,6 Household overcrowding SK 37,9 36,4 35,5 34,1 30,1 31,2 31,8 - 16,5 → (% of population) EU 17,9 17,5 17,1 17,1 17,4 17,3 16,8 - 16,5 Housing Housing costs SK 29,6 28,5 28,1 28,7 31,0 31,4 30,3 - 27,9 ↘ (Share of total final household EU 23,8 23,6 23,4 23,4 25,5 25,0 24,1 - 23,4 consumption) Proportion of the population living in rent-controlled or rent- SK 1,6 1,5 1,2 1,4 1,6 1,9 2,7 2,8 4,2 free accommodation ↗ (% of population) EU 9,7 9,6 9,3 9,1 9,5 9,8 10,7 - 6,7 78 Life expectancy at birth SK 77,3 77,3 77,4 77,8 77,0 74,6 77,0 - 80,6 → (Number of years) EU 80,9 80,9 81,0 81,3 80,4 80,1 80,6 - 82,9 Avoidable mortality through SK 168,3 173,7 165,4 163,6 168,8 - - - 119,6 healthcare → (Number of deaths per 100 thousand EU 93,2 92,1 91,3 89,2 91,7 - - 64,5 inhabitants) Health Preventable mortality SK 243,9 238,8 241,3 231,2 262,4 - - - 173,7 ↘ (Number of deaths per 100 thousand EU 162,5 160,0 158,6 154,0 180,0 - - - 119,1 inhabitants) Difference in life expectancy by SK 14,9 15,6 - - - - - - 9,6 education ↘ (Number of years, males aged 25, difference between ISCED 5-8 and EU 6,3 6,9 - - - - - - 4,3 ISCED 0-2) Average concentration of PM2.5 SK 14,7 17,5 16,9 13,8 - - - - 8,6 in the air ↗ (μg/m3) EU 14,6 14,9 14,5 12,6 - - - - 8,6 Greenhouse gas emissions SK -44,9 -43,0 -41,7 -46,5 -54,2 -47,9 - - -55 Green transformation → (Total emissions excluding LULUCF, EU -24,9 -23,0 -25,0 -28,2 -34,3 -30,4 - - -55 Decrease from 1990, %) Percentage of waste recycled SK 23,0 29,8 36,3 38,5 42,1 39,0 - - 60 ↗ (% of municipal waste) EU 45,9 46,3 46,4 47,2 54,4 55,5 - - 60 Share of RES SK 12,0 11,5 11,9 16,9 17,3 17,4 17,5 - 19,2 ↗ (% of gross final energy EU 18,0 18,4 19,1 19,9 22,1 21,9 23,0 - 32 consumption) Government gross debt SK 52,3 51,5 49,4 48,0 58,9 61,1 57,8 56,7 40 ↘ Public finance (% OF GDP) EU 84,3 81,9 79,8 77,7 90,0 87,4 83,5 83,1 - S2 - long-term sustainability SK 2,4 2,4 2,5 3,8 7,7 10,6 11,3 9,9 2 indicator ↘ (value) EU 2,1 1,9 2,3 2,4 2,4 3,0 2,7 2,9 - 79 Table 7: Description of result indicators Name of the indicator Definition and source The rule of law reflects the perception of the extent to which individual actors trust and abide by the rules of society; in particular, the quality of contract enforcement, property rights, police and courts, and Government by Law the likelihood of crime and violence are monitored. Source : http://info.worldbank.org/governance/wgi/ Control of corruption reflects the perception of the extent to which public power is exercised for private gain, including petty and grand forms of corruption, as well as the "capture" of the state by elites and Control of corruption private interests. Source : http://info.worldbank.org/governance/wgi/ Country ranking in the Product Market Regulation Index. It measures regulation and barriers in three areas: state control, barriers to business, and barriers to trade and investment (each with a weighting of Product Market one-third). The Product Market Regulation Index does not focus only on the business activities of Regulation Index (PMR) ordinary enterprises, but measures broader regulation (e.g. regulation of network industries). Source : https://www.oecd.org/economy/reform/indicators-of-product-market-regulation/ The Digital Economy and Society Index measures progress in five areas - internet connectivity, human DESI index capital, use of internet services, integration of digital technologies and digital public services. Source : https://digital-strategy.ec.europa.eu/en/policies/desi An index assessing the position of countries in a number of areas affecting innovation (human capital, European Innovation attractiveness of the scientific environment, digitalisation, financing, IT, intellectual assets, etc.) Scoreboard Source : https://ec.europa.eu/info/research-and-innovation/statistics/performance-indicators/european- innovation-scoreboard Business expenditure Business R&D expenditure as a percentage of GDP on research and development Source: Eurostat: [rd_e_gerdtot] Employment in the 20-64 age group LFS employment rate Source: Eurostat [lfsa_ergan] Total employment (domestic concept) without age limit ESA employment rate Source: Eurostat [nama_10_pe] Percentage of people at Proportion of the population at risk of poverty (after social transfers) and/or living in severe material and risk of poverty or social social deprivation and/or in households with very low labour intensity exclusion Source: Eurostat [ilc_peps01n] Employment rate of Employment rate for women aged 20-39 women Eurostat: [lfsa_egan], [lfsa_pganws] Employment rate of Employment rate of people with primary and lower education aged 20-64 (ISCED 0-2) people with low education Source: Eurostat [lfsa_ergaedn] Proportion of children Proportion of children in pre-primary education from 3 years of age to the start of compulsory schooling in pre-primary Source: Eurostat [educ_uoe_enra21] education An international standardized assessment of the knowledge and skills of 15-year-olds. It assesses pupils in three areas in mathematics, reading and science. The index is the average of the scores in each PISA domain. Source : https://pisadataexplorer.oecd.org/ide/idepisa/ Percentage of pupils Proportion of pupils below basic level (level 2) in PISA reading literacy below the minimum level in reading Source : https://pisadataexplorer.oecd.org/ide/idepisa/ Proportion of the population aged 18-24 with low educational attainment (ISCED 0, 1, 2, 3C) not in Percentage of young further education or training early school leavers Source: Eurostat [edat_lfse_14] Average ranking of the The average ranking of the best university in the country across the Times, ARWU and QS rankings best university in TOP rankings Source : https://www.universityrankings.ch/ Percentage of people Percentage of people in education and training in the last four weeks participating in adult education Source: Eurostat [trng_lfs_01] Percentage of the population living in an overcrowded household. An overcrowded household is defined as a household that does not have a minimum number of rooms equal to: one room per household, one Household room per couple in the household; one room for each single person aged 18 years and over; one room overcrowding for a same-sex unmarried couple aged 12 to 17 years; one room for each single person aged 12 to 17 years not included in the previous category; one room for a couple of children aged 12 years or younger. Source: Eurostat [ilc_lvho05a] Share of housing costs in household final consumption according to national accounts Housing costs Source: Eurostat [nama_10_co3_p3] 80 Proportion of the population living in Proportion of the population living in rent-controlled or rent-free accommodation rent-controlled or rent- Source: Eurostat [ilc_lvho02] free accommodation The average number of years that a newly born child will live, assuming that the current mortality rates Life expectancy at birth in each population year are maintained. Source: Eurostat [demo_mlexpecedu] The healthcare-preventable mortality rate, or in other words the treatable mortality rate, includes deaths Avoidable mortality that can be averted by early and effective diagnosis or adequate healthcare intervention and treatment through healthcare for people up to 75 years of age. Defined as the number of deaths per 100,000 population. Source: Eurostat [hlth_cd_apr] Preventable mortality rates, mainly through effective public health interventions and primary prevention (i.e. before the outbreak of diseases/injuries, to reduce their incidence) for people under 75 years of Preventable mortality age. Defined as the number of deaths per 100 000 population. Source: Eurostat [hlth_cd_apr] Difference in life Difference in life years between men with the highest level of primary education and men with a expectancy by university degree at age 25 education Source: Eurostat [demo_mlexpecedu] The indicator measures the population-weighted average annual concentration of particulate matter in Average concentration urban agglomerations. It is measured in µg/m3 of air as an average value per year. Fine particles (PM2,5 of PM2,5 in the air ) are those with a diameter of less than 2,5 micrometres. Source: Eurostat [sdg_11_50] Percentage change in non-ETS GHG emissions (expressed as CO2 equivalent) compared to 2005. The indicator captures trends in aggregated anthropogenic emissions of CO2, NO2, CH4, HFCs, PFCs and Greenhouse gas SF6, collectively referred to as GHGs (expressed as CO2 equivalent). The total does not include emissions emissions from the emissions trading and land use and forestry (LULUCF) sectors. Source: Eurostat [env_air_gge] Percentage of waste Percentage of municipal waste recycled recycled Source: Eurostat [CEI_WM011] Share of final energy consumption from renewable energy sources (RES) and gross final energy consumption. RES final energy consumption is calculated as the sum of RES gross final electricity Share of RES consumption, RES gross final energy consumption of energy for heating and cooling and RES final energy consumption of energy for transport. Source: Eurostat [nrg_ind_ren] General government Public sector gross debt as a share of GDP gross debt Source: Eurostat [gov_10dd_edpt1] Indicator S2 measures how much the structural primary balance needs to change permanently (in % S2 of GDP) for the present value of future structural primary balances to cover today's level of debt. Source: Debt Sustainability Monitor 2022 81

Annex 2: List of abbreviations AES Adult Education Survey ASD Autism spectrum disorder ASR Alliance of Sectoral Councils BAT Best Available Technologies BSK Bratislava self-governing region CAGR Compound annual growth rate CBA Cost benefit analysis CEPOL European Police College CSRs Country Specific Recommendations DESI Digital Economy and Society Index DRG Diagnoses related groups, diagnostic groups EC European Commission EDIH European Digital Innovation Hubs EIA Environmental impact assessment EIS European Innovation Scoreboard EMS Emergency Medical Service EPSR European Pillar of Social Rights ERP Enterprise resource planning ESA European System of National and Regional Accounts EU European Union EU-LFS Labour Force Survey EUROPOL European Police Office FAST-CARE Flexible Assistance for Territories GO Government Office of the Slovak Republic HSPA Health system performance evaluation IFP Institute of Financial Policy IPEX International exchange of information on the EU IRA Internal Governing Act ISCED International Standard Classification of Education LFS Labour Force Survey MDP Multidisciplinary approach MEAT Most economically advantageous tender MoA Ministry of Agriculture and Rural Development of the Slovak Republic MoE Ministry of Economy of the Slovak Republic MoE Ministry of Education, Research, Development and Youth of the Slovak Republic MoEN Ministry of the Environment of the Slovak Republic MoF Ministry of Finance of the Slovak Republic MoH Ministry of Health of the Slovak Republic MoI Ministry of the Interior of the Slovak Republic 82 MoINV Ministry of Investment, Regional Development and Informatisation of the Slovak Republic MoJ Ministry of Justice of the Slovak Republic MoL Ministry of Labour, Social Affairs and Family of the Slovak Republic MoT Ministry of Transport and Construction of the Slovak Republic MPK Inter-ministerial comment procedure MRC Marginalised Roma communities MW Megawatt NBSAP National Biodiversity Strategy and Action Plan NCIVS National Concept of Informatisation of Public Administration NDDP SR National Digital Decade Plan of the Slovak Republic NECP National energy and climate plan NEET Not in Education, Employment or Training NIKA National implementation and coordination authority NPC No policy change scenario NR SR National Council of the Slovak Republic NRP National reform programme LSE Lower secondary vocational education ODP Period of pension insurance OECD Organisation for Economic Co-operation and Development OP Operational programme PF Police Force PISA Programme for International Student Assessment PMR Product Market Regulation PPP Purchasing power parity PSK Programme Slovakia PU Public universities MO SR Monuments Office of the Slovak Republic QPI Qualifying Period of Pension insurance RDI Research, development and innovation REACT-EU Recovery Assistance for Cohesion and the Territories of Europe RES Renewable energy sources RRP Recovery and Resilience Plan of the Slovak Republic SEP State education programme SEPS Slovak Electricity Transmission System SME Small and medium-sized enterprises SO SR Statistical Office of the Slovak Republic SOC Specialised outpatient care SR Slovak Republic SSI State School Inspection UN United Nations UHP Value for money unit 83 VAT Value Added Tax OHN Optimising the hospital network WGI Worldwide Governance Indicators 84