The Slovak Republic 2009 Strategic Report Re: The Slovak Republic 2009 Strategic Report For: European Commission Issued by: Central Coordination Authority Ministry of Construction and Regional Development of the Slovak

Republic Prepared by: Evaluation Unit Responsibility: Gabriela Izáková, Head of the Evaluation Unit Eva Hrčková, Director of the EU Funds Coordination Department Michal Sántai, General Director of the Regions Development Strategy Section Date of issue: 16 December 2009 Approved by: Igor Štefanov Minister of Construction and Regional Development of the Slovak

Republic

Central Coordination Authority

Ministry of Construction and Regional Development of the Slovak Republic

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THE SLOVAK REPUBLIC STRATEGIC REPORT 2009

Bratislava, December 2009

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Table of Contents

TABLE OF CONTENTS 3

ABBREVIATIONS USED 5

INTRODUCTION 7

A. SOCIAL-ECONOMIC SITUATION AND TRENDS 9

A.1. Changes in the social-economic situation 9

A.2. Development and trends in social-economic and territorial differences 15

B. ACHIEVED RESULTS AND PERSPECTIVES 21

B.3. Contributions to fulfilling NSRF objectives in relation to output and input indicator data 21

B.3.1. NSRF strategic goal 21 B.3.2 Strategic Priority 1: Infrastructure and regional accessibility 23 B.3.3 Strategic Priority 2: Knowledge-based economy 28 B.3.4 Strategic Priority 3: Human resources 31

B.4. Results of completed evaluations and the Central Coordination Authority's activities in the field of providing and coordinating evaluations in the NSRF framework 34

B.4.1 Completed NSRF and OP evaluations 34 B.4.2 Central Coordination Authority's activities in the field of NSRF evaluation and Managing Authority coordination in the field of evaluation 36

B.5. Information on expenditures and commitments 40 B.5.1 Financial implementation by OP 41 B.5.2 Financial implementation according to priority topics 43

B. 6. Fulfilment of objectives under Article 3 of the Council (EC) Regulation No. 1083/2006 44

6.1.1 Cross-border cooperation carried out through the following programmes: 48 6.1.2 Transnational cooperation carried out through the following programmes: 49 6.1.3 Inter-regional cooperation carried out through OP INTERREG IV C 49

B.7. European Social Fund contributions to the fulfilment of guidelines and recommendations within European Employment Strategy 51

B.8. European Social Fund contribution to the performance of tasks and the fulfilment of objectives related to social protection, social inclusion, education and professional training 56

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TABLE NO. 9 OVERVIEW OF NATIONAL PROJECTS IMPLEMENTED WITHIN THE EDUCATION OP 60

THE EDUCATION OPERATIONAL PROGRAMME 60

C. PROGRESS, CALLS TO IMPLEMENT PRIORITIES AND STRATEGY 68

C.10. Measures of efficiency in relation to implemented programmes within the 2007–2013 programming period 68

C.10.1 Structural Fund and Cohesion Fund Management System for the 2007-2013 Programming period 69 C.10.2. Structural Fund and Cohesion Fund Financial Management and Financing System for the 2007 - 2013 programming period 72 C.10.3. Act No. 528/2008 Coll. on Aid and Support Granted from EC Funds 73 C.10.4 Major projects 74

C.11. Development of policies and legislation 78 C.11.1 Modernization of public policies 78 C.11.2 Coherence Policy 78 C.11.3 Regional policy and regional development 80 C.11.4 Public procurement 80 C.11.5 Environmental impact evaluation 81 C.11.6 Water management 82 C.11.7 Air protection 83 C.11.8 Waste management 83 C.11.9 Protection of biodiversity and landscape 84 C.11.10 IT use in society 85 C.11.11 Innovation 86 C.11.12 Tourism 86 C.11.13 Education 86 C.11.13 Research and development 87 C.11.14 Employment and the labour market 88

C.12. Contribution of Operational Programmes to Cohesion Policy in relation to the European Economic Recovery Plan 92

D.13 Good practice examples 106

A GOOD PRACTICE EXAMPLE: 116

E. CONCLUSIONS 134

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Abbreviations used AOTP Active Labour Market Measures BSK Bratislava Self-Governing Region CBC Cross-Border Cooperation CKO Central Coordination Authority CO Certification Body CSF Community Support Framework CVH Central Evaluation Committee EIF European Investment Fund EK European Commission ENPI European Neighbourhood and Investments ERDF European Regional Development Fund ESF European Social Fund EÚ European Union EC European Community EÚS European Territorial Cooperation GDP Gross Domestic Product HP Horizontal priority ICT Information-Communication Technologies ILO International Labour Organisation JEREMIE Joint European Resources for Small and Medium-Sized Enterprises KF Cohesion Fund MDPT SR Ministry of Transport, Posts and Telecommunications of the Slovak Republic MF SR Ministry of the Finance of the Slovak Republic MK SR Ministry of Culture of the Slovak Republic MH SR Ministry of Economy of the Slovak Republic MPSVaR SR Ministry of Labour, Social Affairs and Family of the Slovak Republic SME Small and Medium-sized Enterprises MŠ SR Ministry of the Education of the Slovak Republic MVRR SR Ministry of the Construction and Regional Development MZ SR Ministry of Health of the Slovak Republic MŽP SR Ministry of the Environment of the Slovak Republic NBS National Bank of Slovakia NMV National Monitoring Committee NFP Non-repayable Financial Aid NPR National Reform Programme NSRF National Strategic Reference Framework OA Audit Body OP Operational Programme OP BK Bratislava Region Operational Programme OP D Transport Operational Program OP IS Information Society Operational Programme OP KaHR Competitiveness and Economic Growth Operational Programme OP TP Technical Assistance Operational Programme OP V Education Operational Programme OP VaV Research and Development Operational Programme OP Z Health Operational Programme

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OP ZaSI Employment and Social Inclusion Operational Programme OP ZP Environment Operational Programme PJ Paying Unit PPP Purchasing Power Parity PO Paying Authority PZI Inflow of Foreign Investments RO Managing Authority ROP Regional Operational Programme SI Summary of Innovation SO Intermediary Body SORO Intermediary Body under Managing Authority SR Slovak Republic SUS Community Strategic Guidelines ŠF Structural Funds ŠR State Budget ŠÚ SR Statistical Office of the Slovak Republic ÚPSVaR Centre for Labour, Social Affairs and Family VÚC Higher Territorial Unit VZPS Labour Force Surveys

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Introduction By joining the European Union the Slovak Republic integrated itself among countries that can effectively make use of aid granted by the EU in a form of structural funds and via the cohesion fund. At present, the Slovak Republic finds itself at the end of the third implementation year for European Union financial aid for the programming period 2007 – 2013, which is primarily focused on the enhancing cohesiveness in economic, social and territorial sectors and on the elimination of regional disparities. The European Commission is supporting the enhancement of Cohesion Policy connections with strategic EU objectives through the use of structural funds and the Cohesion Fund during the 2007–2013 programming period . In order to achieve real progress in fulfilling the Lisbon Strategy a key issue is to effectively connect and coordinate EU activities and individual Member State interventions. At present and for this specific purpose Integrated Guidelines for Growth and Employment, which create a basic framework for the taking of action supporting further enhancement of competitiveness and creation of new jobs in the context of global changes. The National Reform Programmes prepared by individual Member States for a period of three years make it possible to set objectives in accordance with the Integrated Guidelines and to monitor progress of their implementation. Today the Community Strategic Guidelines adopted by the EC in 2005 serve to better integrate Lisbon (and Gothenburg) objectives into programmes co-financed in the framework of Cohesion Policy. Based on these guidelines, the Member States have prepared individual National Strategic Reference Frameworks (NSRF) as a reference tool for programming EU funds in the 2007–2013 programming period s as a prerequisite for development and approval of Operational Programmes (OP) co-financed from Structural Funds and the Cohesion Fund. In addition to programming this strategic approach also includes a method of monitoring progress as to fulfilling objectives set at individual levels or assessing the contribution of individual objectives towards fulfilling Cohesion Policy objectives. Therefore, in addition to annual NSRF and OP execution reports, the Member States, under Article 29, Paragraphs 2 and 3 of Council (EC) Regulation No. 1083/2006, stipulating general provisions of the European Regional Development Fund, the European Social Fund and the Cohesion Fund and which cancels Regulation (EC) No. 1260/1999 (hereinafter the “Council (EC) Regulation No. 1083/2006”), are obliged to submit to the European Commission so-called National Strategic Reports in 2009 and 2012. These are subsequently summarized and submitted to the European Council and the European Parliament, the European Economic and Social Committee and the Committee of the Regions. The Ministry of Construction and Regional Development, in the 2007–2013 programming period , performs the tasks of the Central Coordination Authority under the provisions of § 6 of Act No. 528/2008 Coll. on Aid and Support Granted from the European Community Funds as amended by Act No. 266/2009 Coll. The Central Coordination Authority prepared the Slovak Republic 2009 Strategic Report (hereinafter “Strategic Report”) under the provisions of Article 29 of Council Regulation (EC) No. 1083/2006 with content and in a structure for the 2009 national strategic reports included in the European Commission document called “Indicative Structure for the 2009 National Strategic Reports” No. COF 09/0018/00-EN approved by the European Commission – COF Committee for Coordination of Funds.

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The report was prepared from Ministry of Construction and Regional Development data acquired via activities arising from its competencies as the central state administration body in the field of regional development, the results of the Central Coordination Authority's activities, results of activities in the field of cross-border cooperation in the framework of a Cohesion Policy goal –European Territorial Cooperation as well as the results of the “Evaluation of Meeting Cohesion Policy Objectives through Competitiveness, Creating New Employment Opportunities and Increasing Employment; Assessing the Impact of Economic Crisis on Employment” and documentation and data as of 30 September 2009 provided by the following bodies:

- Managing bodies of Operational Programmes, Horizontal Priority (HP) coordinators, - The Government Office of the Slovak Republic, - The Certification Body and the Financial Policy Institute (the MF SR), - The Ministry of the Environment, - The Ministry of the Economics, - The Office for Public Procurement,

Further sources for the preparation of the strategic report consisted of ITMS data and data from the Statistical Office of the Slovak Republic. A draft of the strategic report within a commenting procedure was delivered to the managing authorities of Operational Programmes, HP coordinators, the Ministry of the Finance, the Statistical Office of the Slovak Republic, the Office for Public Procurement and other state administration bodies that provided documentation for the preparation of the report. The draft of the strategic report was published on the Internet at www.nsrr.sk. The strategic report took into account relevant comments of objecting entities. The introductory section contains a summary of the entire report and provides basic information on development trends, Cohesion Policy's contribution to the objectives set and to the relevance of strategy defined for the NSRF and the OP in the 2007–2013 programming period . The following section deals with the social-economic situation in Slovakia and identifies important changes since 2007. Its goal is to identify the main social-economic trends on the national and regional level that influence the achievement of NSRF and OP strategic objectives. The third section includes the results of the evaluation of physical progress within NSRF implementation based on indicators at the level of strategic objectives, strategic priorities and selected “core” indicators of the OP. The fourth section presents the field of evaluation of the 2007–2013 programming period . The fifth section includes financial progress achieved within the implementation of EU funds according to the OP and priority topics by the end of September 2009. Sections six, seven and eight focus on the evaluation of the contribution of current Cohesion Policy implementation towards fulfilling the objectives and priorities stated in strategic documents at the EU level, or national documents stemming from them. These sections relate to the Strategic Guidelines of Cohesion Policy and the Integrated Guidelines for Growth and Employment, i.e. guidelines related to European Employment Strategy. Section nine contains identification of the OP's contributions co-financed from Structural Fund and the Cohesion Fund in order to meet objectives stated in the National Reform Programme for 2008 - 2010. Part ten includes an overview of the main steps and measures towards efficient implementation of EU aid received by bodies responsible for managing and implementing the

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NSRF, OPs and the European Territorial Cooperation programmes that contribute to achieving the objectives of Cohesion Policy in Slovakia. Section eleven summarizes the most important changes in domestic policies and amendments to relevant legislation that influence the OP. Section twelve contains an overview of measures taken by individual Managing Authorities in the context of implementing the European Economic Recovery Plan. Two appendices include overviews of the drawing of such funds by individual OPs and priority topics.

A. Social-economic situation and trends The NSRF strategy and relevant strategic priorities drew on the results of macroeconomic and social-economic analysis and needs of the Slovak Republic in order to provide for sustainable economic and social development of the country. Targeted concentration of public resources and Cohesion Policy means into a limited number of topical priorities is to enhance the utilisation of existing potential and at the same time to support the key factors for developing a knowledge-based economy. In the context of the world and Slovak economic boom, 3 strategic priorities were defined for the programming period of 2007 - 2013:

1. Infrastructure and regional accessibility – focused on better infrastructure in regions and efficiency of related public services rendered.

2. Knowledge-based economy – deals with the development of resources for sustainable economic growth and stronger competitiveness in industry and services.

3. Human resources – focused on higher employment, increasing labour force quality for the needs of a knowledge-based economy and higher social inclusion of risk groups.

These priorities reflect the positive development of the economy in the period during the preparation of the NSRF and positive mid-term forecasts. The following section is focused on a description of the most important economic and social changes relevant for fulfilling NSRF and OP objectives. It focuses on the Slovak Republic's economic development from 2006 to 2008. Data, which constituted the basis for analysis, were drawn from officially available databases from Eurostat, the Statistical Office of the Slovak Republic (Slovstat and RegDat databases), the National Bank of Slovakia (NBS) and the Centre for Labour, Social Affairs and Family (ÚPSVaR). When actual data were not available or if more recent data were available, development is assessed in relation to the latest data available.

A.1. Changes in the social-economic situation Economic development of the Slovak Republic The NSRF draws upon the period from 2000 – 2005, when Slovakia significantly increased the pace of its economic growth. GDP growth until 2008 was the highest in the EU; it event reached twice the average GDP growth in the entire EU. Economic growth after 2006 even increased and culminated in 2007 when GDP grew by 10.6 % compared to the previous year. Dynamic economic development was recorded after introduction of several fundamental economic reforms, especially from 2003 – 2005 (tax reform, pension reform, labour market reform, etc.). The reforms contributed to higher investment activity. There was an increase of the inflow of foreign investments primarily into the automotive industry, electrical

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engineering and supporting industries. Economic growth after 2006 was caused by economic demand and also by export abroad. Slovakia is known for its largely open economy. Also, domestic demand is tightly connected to export results. Good economic condition in 2006 – 2007 resulted in higher state budget revenues and also in increase expenditure into infrastructure, social protection and interventions that have more intensively contributed to fulfilling the Lisbon Strategy. During the period of formulating NSRF strategic priorities, the Slovak Republic was preparing itself to adopt the Euro and it was adjusting its fiscal and monetary policy to this goal. Meeting the public finance deficit criteria seemed to be a problem. In 2006, the deficit was higher by 0.45 % of GDP than stipulated by the Maastricht criterion. Chart No. 1

129

148,7

54,1

62,8

46,6 49,242,1 44

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20

40

60

80

100

120

140

160%

Bratislavskýkraj

ZápadnéSlovensko

StrednéSlovensko

VýchodnéSlovensko

HDP na obyv. v % z priemeru EÚ 27

2004

2006

HDP na obyv. v % z priemeru EU 27 – Per capita GDP in % of the EU 27 average, Bratislavaský kraj – Bratislava Region, Západné Slovensko – West Slovakia, Stredné Slovensko – Central Slovakia, Východné Slovensko – East Slovakia

However, in 2008, the public finance deficit decreased by 2.3 % of GDP, which is the same value as achieved by the entire EU 27. After fulfilling all criteria, Slovakia became a member of the Eurozone in January 2009 and the official conversion rate was set at SKK 30.1260/EUR. From the long-term perspective, the Slovak Republic's public debt was low and in 2008 it accounted for 27.7 % of GDP. Table No. 1: The development of selected macroeconomic indicators of the Slovak Republic from 2006 - 2008 2006 2008 Indicator SR EU 15 SR EU 15 GDP per capita (in PPP, % of the EU27) 63.4 112.2 71.8e 110.8 Labour productivity per one hour worked (GDP in PPP)

59.2 100.0 65.5e 100.0

Public debt (% of GDP) 30.5 62.8 27.7 60.4* Public finance deficit (% of GDP) -3.5 -1.3 -2.3 N/A Economic sentiment indicator (Jan. 06 and Dec. 103.3 101.7** 65.2 66.4**

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08) Unemployment rate according to the Labour Force Surveys (VZPS) in %

13.4 7.7 9.5 7.1 e – Eurostat estimate * - a 2007 data : - unavailable data ** - data for the EU 27 Due to higher economic growth in recent years there is an increase of GDP per capita, which reached € 18,000 per capita (PPP, a 2008 estimate) and which is almost twice as high as in 2000. We can say that there are on-going economic convergence processes in Slovakia. In relative terms, Slovakia achieved, in 2006, a level of 63.5 % of the EU 27 average (56.6 % of the EU 15). For 2008, this value is estimated at 71.9 % (64.7 % of the EU 15). Despite a long-term decreasing trend for unemployment, the unemployment rate, according to labour market surveys, still remains relatively high. According to labour market surveys one major issue has been the failure to resolve one of the most important problems on the Slovak labour force – the high rate of long-term unemployment. Chart No.2

2,29 2,27

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%Miera nezamestnanosti

2006 2,29 6,62 11,55 14,41

2008 2,27 5,65 10,18 13,17

Bratislavský kraj

Západné Slovensko

Stredné Slovensko

Východné Slovensko

Miera nezamestnanosti – Unemployment rate, Bratislavaský kraj – Bratislava Region, Západné Slovensko – West Slovakia, Stredné Slovensko – Central Slovakia, Východné Slovensko – East Slovakia These results were a consequence of a low number of jobs created and also of lower labour market flexibility. After 2006, the labour market recorded a more significantly positive development and dynamic economic growth was also connected with a more significant decrease in unemployment. The unemployment rate, according to labour market surveys, showed a significant decrease. It reached its minimum in 2008, when it dropped to 9.5 %. The unemployment rate for women in 2008 reached 11.1 % and the unemployment rate for men reached 8.4 %, which is a 2.7 % difference. Compared to 2007, the difference between men and women in terms of unemployment decreased by one tenth of a percent. Changes in the labour market also brought growth in the employment rate by 2.9 percentage points. There was an increase from 59.4 % in 2006 to 62.3 % in 2008. The increase was obvious in the

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construction industry and in selected services (hotels, restaurants, transport, real estate and trade). Growth in employment opportunities was reflected in a higher number of economically active persons. The economic activity rate in 2008 reached 59.4 %, which represents a slight increase (by 0.3 percentage points) compared to 2006. In the Slovak Republic, the economic activity rate for women in 2008 reached 51 % and the economic activity rate for the men reached 68.3 %, which is a 17.3 % difference. Compared to 2007, the difference between the economic activity rate for men and women increased by 0.1 %. The growth of employment was faster than growth in the EU 15, which recorded 1.1 percent growth in recent years. However, the overall employment rate is still lower than the EU 15 (and EU 27) average, where it reached 67.3 % (65.9 % - EU 27) in 2008. In Slovakia, the employment rate for women aged 15 – 64 in 2008 reached 54.6 % and the employment rate for men of the same age reached 70 %, i.e. a 15.4 % difference. Compared to 2007, there has been no change in the difference of the employment rate between the men and women. In recent years, there also has been a significant decrease in long-term unemployment, according to labour market surveys (a ratio of the unemployed for longer one year). While in 2006 it reached 10.2 % (a share in the active population as a whole) in 2008 it reached 6.6 %. The decrease was significantly higher than decrease in the EU 15 with its value lower by 4 percentage points in 2008. The statistically reported percentage of long-term unemployment in women in 2008 - 7.6 % is higher by 1.8 % than the statistically reported percentage of long-term unemployment of the men (5.8 %). This is also a reason why the long-term unemployment rate still remains the highest from among all EU countries. Slovakia's economic growth is connected with the growth of labour productivity. The NSRF's strategic focus expected increased labour productivity in connection with the new production capacities introduced by foreign investments. Until 2008, the Slovak Republic's labour productivity measured by the GDP/employed person indicator (in PPP) increased to 79.0 % of the EU 27 average (Eurostat estimate), which is one of the highest values among Central and East European countries. This value has increased since 2006 by 7.4 percentage points. Compared to the EU 15, there is also an increase of labour productivity per hour worked (GDP in PPP per one hour worked), which increased from 59.2 % in 2006 to 65.5 % of the EU 15 value. Compared to 2006, an average monthly salary of an employee in the Slovak Republic’s economy increased by € 100.28 and in 2008 it reached € 723.03 EUR, which is a 1.16 fold increase. The pace of nominal wage growth has slightly decreasing compared to 2004 – 2005, when the highest growth was recorded. The dynamics of the development of real wages in 2008 returned to the 2006 level with a year-on-year growth index of 103.3. Compared to 2007, there was a slight decrease by 1 percentage point. All sectors of the economy recorded real wage growth in 2007, with the fastest growth of real wage within the telecommunications industry. On the contrary, in 2008 the telecommunications industry together with the motor vehicle industry recorded an overall decrease in real wages. In 2007, the gender wage gap in Slovakia, according to Eurostat data, showed a year-on-year decrease by 2.2 percentage points and reached 23.6 %. Financial and economic crisis and its influence on the development of the Slovak Republic As a consequence of the global financial and economic crisis at the end of 2008, all the EU Member States, including Slovakia, have recorded slower economic growth. Since the end of 2008 we have seen a drop in economic performance. While in 2008 we recorded a 6.2 % GDP

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increase, in 2009 Eurostat estimates a drop at a level of -5.8 % and a slight increase of about 2 % is expected in each of the next two years. The rapid decrease of production was mainly caused by a fall in industries sensitive to a drop in demand on the main markets in Germany and the Czech Republic, which make up a third of export volume. Slovakia recorded a drop, especially within industrial production, which amounted to 20 to 25 percentage points compared with previous year. Several big industrial enterprises reacted to this by lowering wages or by lowering employment and proceeding with layoffs. Unlike currencies in surrounding countries, there was no devaluation of the market rate of Slovak Koruna because its exchange rate was already officially set. It is assumed that the adoption of Euro probably helped to alleviate the impact of the crisis; however, its actual impact is still being discussed. According to Eurostat data in 2007, the gender wage difference in Slovakia recorded a year-on-year decrease by 2.2 percentage points and reached 23.6 %. Unemployment has been rising since the end of 2008 and as of September 2009 it reached 12 %, which is 2.8 percentage points higher than the EU 27 average. The difference in the unemployment rate, compared to the EU 15 average in 2007 when it reached 4.1 percentage points, dropped to 2.7 percentage points. Thus, the lag has become less obvious, but Slovakia is currently a country with the fourth highest unemployment rate in the EU. Economic growth and increasing standards of living were accompanied by a drop of the share of citizens threatened by the risk of poverty, which dropped from 13 % in 2005 to 11 % in 2008. The effect of the global economic crisis definitely showed itself in lower employment. While in previous periods we recorded a long-term drop of the unemployment rate, this favourable trend was reversed due to the crisis and during the last 13 months the number of the unemployed increased by almost 150 thousand persons without work. Industry was most affected – especially the industrial production sector, which recorded a year-on loss of 65,000 employees. However, other industries were affected as well – extraction and mining, agriculture, financial and insurance activities, real estate or accommodation and boarding services. Lower employment within affected industries primarily impacted employees with lower qualifications; however due to ever stronger manifestations and lower demand and production, employers were forced to lay off even employees with higher education and professional qualifications. At the moment, there is an imbalance between the supply and demand on the labour market, when the available workforce looking for work greatly exceeds the number of job vacancies. This fact markedly hinders socially excluded groups of citizens from accessing the labour market and most likely it will also be reflected in the number of persons threatened by the risk of poverty as the largest component of this group consists of the unemployed. Negative impacts of the crisis will also influence marginalized Roma communities, who will have problems to get back into the labour market because of low education levels and qualifications. According to VZPS, unemployment has been rising since 2008 and in September 2009 it reached as much as 11.7 %, which is an increase of 2.8 percentage points compared to the EU 27 average. The difference in the unemployment rate compared to the EU 15 average since 2007, when the difference reached 4.1 percentage points, has dropped to 2.7 percentage points. Thus, the lag behind is not so clear; however Slovakia is currently a country with the fourth highest unemployment rate in the EU. The unfavourable consequences of the economic crisis were reflected in a rapid deterioration of business confidence in the Slovak Republic as well as in performance indicators. In 2006 and 2007, the economic sentiment indicator was steadily higher than its long-term average.

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However, at the beginning of 2008 there was a slight decrease and there was a more obvious drop in October 2008 to 80.6. Its value declined until April 2009 when it reached a minimum of 45.9. A negative outlook in Slovakia is markedly lower than in the EU. The values are about 10 – 15 points lower. In October 2009, the value of this indicator in the EU was 86.0, while in the Slovak Republic it was 70.7. Although, Slovakia is among countries that are able to attract investors, the dynamics of investment inflow in 2008 was lower. Total inflow in 2008 amounted to € 2.1 billion, which, compared to 2006, accounts for a drop of € 1.99 billion. This decrease was mainly caused by a lower rate of profit reinvestment in the Slovak Republic. Foreign investment inflows dropped between 2006 and 2007 from 4.6 % of GDP to 2.4 % of GDP. Compared to the EU 15, the situation from the period in which the NSRF was being prepared reversed and Slovakia reported lower foreign investment inflows in these years compared to the EU 15 average. Competitiveness, innovations and information society Competitiveness of the Slovak economy is based on activities with lower added value rates and with low labour costs. However, this advantage is not sustainable from a long-term perspective when considering the high degree of economic openness. Growth of competitiveness should be connected with a higher level of innovativeness. Although the development of research, development and innovation is one of the main strategic objectives of the NSRF, application has been problematic. According to a summary innovation index, Slovakia belongs among the countries that lag behind, with indicator values significantly below the EU average (2008). Since 2006 the value of the SI index has slightly increased. The most important factors regarding index growth included registrations of patents, trademarks and designs, a higher number of university graduates and the development of broadband Internet company connections. The low rate of research and development expenditure remains a long-term problem. The relative share of such expenditure as measured by a share of GDP has been decreasing since 1997. In 2007, Slovakia, with a share of total research and development expenditure to GDP at a level of 0.46 %, ranked as the worst country in the EU. Catching up with the European average, which achieved a level of 1.85 in the EU 27 and 1.93 for the EU 15 respectively, seems to be very problematic. In particular the critically low value of the share of company expenditure to GDP at a level of 0.18 %, which is ten times lower than the EU 27 average, points to the importance of making changes. Despite slight growth, the number of patent applications remains critically low. There was a significant increase in household Internet connections. In 2008, 58 % of households were connected, which is 6 % lower than the EU average. The use of a broadband connection is still significantly lower despite slight growth. Business environment The Slovak Republic's position in the Global Competitiveness Report ranking deteriorated compared to 2006. There was a drop from 37th place to 47th place for 2009/2010 and the ranking dropped from 4.4 to 4.3. Slovakia's ranking deteriorated the most in the field of institutions and innovations. On the contrary, the ranking recorded its most significant improvement in the field of technological preparedness. The Slovak Republic's business environment index, which is published by the Business Alliance of Slovakia, has been deteriorating since 2006, which, according to this survey, is caused by the impact of the crisis

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on businesses and also by lower confidence of the business sector in the government's activities. As to the ranking of how simple it is to do business according to the Doing Business 2010 report, Slovakia took 42nd place, a drop of 7 places since 2009. Despite the worse ranking, individual indicators, which make up the index, did not change significantly. On the contrary, there was improvement mainly in indicators connected with the starting up a business. Compared to the 2007 report, the time necessary to start a business was cut from 25 days to 16, related costs dropped from 4.8 % to 2 % (% revenue per person) and capital necessary to establish a company dropped from 39.1 % to 23.8 % (% revenue per person).

A.2. Development and trends in social-economic and territorial differences The NSRF's strategic goal is to significantly increase, by 2013, the competitiveness and performance of the regions and the Slovak economy and employment, while respecting the principles of sustainable development. In recent years the perception of a regional problem has been shifting from general support for underdeveloped regions to higher growth of their regional centres. The concentration of aid in regional centres should bring higher economic growth in national economy and also quicken the elimination of disparities between regions. The second important moment is an effort to increase competitiveness of regional economies through investments into infrastructure, production technologies, processes and human resources, which are to be reflected in the growth of investments, labour productivity and added value, export performance, creation of new jobs, higher share of the export of high-tech products, higher performance, effectiveness and availability of services, quality of the environment and improved quality of life. There is a convergence process going on at the national level. As to the GDP/capita indicator, Slovakia reaches almost 2/3 of the EU 27 average (2008). However, regional differences are still obvious. In 2006, the Bratislava Region reached 148.7 % of the EU 27 average, by which it ranked as the nineteenth most developed region in the EU 27. Other regions (NUTS II) significantly lag behind. West Slovakia reaches 62.8 %, Central Slovakia 49.2 % and East Slovakia 44.0 %. Since 1995 the dynamics of development have shown that such a lag behind the EU average is decreasing. The fastest pace of convergence was achieved by the Bratislava Region (an increase of 46.6 percentage points) and West Slovakia with an increase of 20.4 percentage points. In 2001 – 2006 the Bratislava Region was the fastest growing region in the EU. Similar to other EU countries, the growth rate in regions with the capital city is markedly higher than in other regions. So, despite the dynamic economic growth of the national economy there has been no elimination of disparities between regions. The rate of dispersion of regional GDP1 at the NUTS II level has been growing from 26.7 % in 1995 to 30.1 % in 2006, which exceeds even the value of dispersion in the EU 27 (28.9 % in 2006). The difference between regions with the highest GDP/capita (the Bratislava Region) and the lowest GDP/capita (East Slovakia) in the Slovak Republic increased to 3.4 times in 2006; the same value was 2.9 times bigger in 2000. Table No. 2: Development of key indicators at the regional level in 2004 to 2008 (in %) GDP/ capita % of

the EU 27 average

Unemployment according to labour market surveys

Long-term unemployment rate according to labour

1 The rate of dispersion of regional GDP is measured by a sum of absolute differences between regions and national GDP per capita, which is weighted by a share of the population and is expressed in percentage of national GDP per capita

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market surveys 2004 2006 2006 2008 2006 2008 Bratislava Region 129.0 148.7 2.29 2.27 2.47 1.52 West Slovakia 54.1 62.8 6.62 5.65 7.16 4.22 Central Slovakia 46.6 49.2 11.55 10.18 12.05 9.62 East Slovakia 42.1 44.0 14.41 13.17 15.93 9.43 Source: VZPS This situation points to an ongoing West – East gradient in the development of the Slovak Republic. Chart No. 3

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Východné Slovensko

Miera nezamestnanosti – Unemployment rate, Bratislavaský kraj – Bratislava Region, Záp. SR – West Slovakia, Stredné Slovensko – Central Slovakia, Východné Slovensko – East Slovakia

The East and South sections of the Slovak Republic are characterized by a lower population concentration, are rural in character and there is a significant spatial concentration of marginalized groups (socially weaker groups and the Roma population). Low economic performance, low rates of investment, slower dynamics of new jobs growth, structurally obsolete regional economies or slow restructuring of companies lead to the persistent high unemployment rate and problems with long-term unemployment, according to labour market surveys. Bad transport accessibility and overall shortcomings in basic infrastructure are a specific problem of underdeveloped regions. Measuring regional disparities and their development using the GDP/capita indicator to some extent misrepresents the real difference in the wealth of individual regions2. Measuring the development of the population's income is an indicator which better reflects the development of regional disparities in the quality of life. Also the development of nominal monthly wages

2 For instance, the dominance of GDP per capita in case of the Bratislava region in the Slovak Republic is significantly distorted by, e.g. a high rate of commuting for work to Bratislava from other surrounding regions.

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shows that the difference between nominal wages in regions of the Slovak Republic is increasing. In 2000 the difference in nominal wages between the Bratislava Region and the Prešov Autonomous Region was 1.64 fold and by 2008 the multiple increased to 1.73. Regional differences versus the comparison based on GDP/capita are not that dramatic. Actually, development in the last three years (2006 – 2008) shows that the fastest growth of wages was recorded in the Nitra and Žilina Autonomous Regions and the pace of the growth of wages in the Bratislava Region was slower. In this regard we can say that the development of disparities is changing and a wage convergence process is occurring in Slovak regions. Economic growth from a sector perspective in recent periods has been driven by the growth of the service sector and industrial production, which grew in connection with prior investments in the automotive industry and electrical engineering. Industrial development results in a special concentration and subsequently in a higher rate of specialized regions. The West Slovakia region, due to its high employment rate in industrial production, is evaluated by the EU as the most specialized region. It is the only region with industrial employment that exceeds 50 %. Services rendered to companies have also recorded a significant employment increase. In 1999 – 2007 there was a 2.4 fold increase, with the most dynamic development mainly in the Bratislava Region (3.4 fold), but there was almost a double increase of employment in the Central Slovakia region and in East Slovakia. More than half of employees in the service sector in the Slovak Republic worked in the Bratislava Region in 2007. Regional competitiveness, innovations and information society Only the Bratislava Region placed itself within European comparison as an innovative region. According to the European Regional Innovation Index (2006) the region ranked 27th (0.66 percentage points), which nominated it as one of the three regions of new Member States among the top 50 regions. Other regions ranked in the lower third of the ranking. The East Slovakia region reached the lowest value of the index (0.19). A decline in innovation indicators is mainly recorded in connection with the continual drop in expenses for research and development. Although, the absolute amount of the research and development expenses is slightly increasing, their share of GDP has been decreasing for a long time. From this point of view, the Central Slovakia region is the most underdeveloped region with its research and development expenses at a level of 0.25 % of GDP (2006). The most developed is the Bratislava Region. Inter-regional differences are not changing significantly; the differences remain three-fold. As to corporate expenditure, the most dominant is the West Slovakia regions with 0.29 % of GDP. East Slovakia reports the lowest value. Employment in knowledge-intensive services rendered to companies in the Slovak Republic lags behind the EU average. The Bratislava Region is the only region that reports above-average values of 40.53 % (2007). High-tech, knowledge-intensive services are also concentrated in the region of the capital. This situation is very similar to all the EU states. The concentration of such services closely correlates with the amount of human resources in science and technologies. In 2007, the Bratislava Region was the region with the eighth highest concentration of employment in high-tech services in the EU. The growth of household Internet connections continues to be even throughout the territory of the Slovak Republic, without any significant differences among the regions. Broadband connection use shows similarly even growth. Labour market development According to labour market surveys, dynamic economic growth in recent years has been connected with lower unemployment throughout Slovakia. In 2007 and early in 2008 it

18

resulted in a shortage of labour in West Slovakia, mainly in technical professions. Companies, especially in the processing industry, hired employees from other regions and other countries. According to labour market surveys the highest drops in unemployment since 2006 have been recorded in Central Slovakia (-1.37 of percentage points) and East Slovakia (-1.24 of percentage points). According to labour market surveys, unemployment in these regions in 2008 is still high, while at a NUTS III level, the highest unemployment rate, according to labour market surveys, is in the Banská Bystrica Autonomous Region (14.25 %), the Prešov Autonomous Region (12.86 %) and in the Košice Autonomous Region (13.5 %). However, the fall in unemployment was not permanent. The economic crisis showed that sensitivity of these regions to extreme changes was very high. According to labour market surveys, the crisis has brought intensive unemployment growth. For the last 13 months the number of registered unemployed persons increased by almost 150,000 job applicants. The most rapid increase of unemployment in 2009, according to labour market surveys, was recorded in the following districts: Senica, Myjava, Považská Bystrica, Komárno, Martin, Brezno, Detva, Krupina, Sabinov, Snina, Stropkov and Svidník. Chart No. 4

0,00

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2,00

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5,00

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0,00 5,00 10,00 15,00 20,00 25,00 30,00

miera nezamestnanosti v januári 2009

nár

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ezam

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ano

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edzi

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om

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BA

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ZA BB

PO

KE

Senica

Myjava

Považská Bystrica

Komárno

Martin

Brezno

Stropkov

Detva

Krupina Sabinov

Snina

Svidník

nárast miery nezamestnanosti v SR 3,42 perc. bodu

miera nezamestnanosti v SR 9,03%

Bratislava 1

Bratislava 2

Bratislava 3

Bratislava 4Bratislava 5

Malacky

Pezinok

Senec

Skalica

Ilava

Nové Mesto n.V.

TrenčínPúchov

Rožňava

Rimavská Sobota

Kežmarok

Poltár

Lučenec

Vranov nad Topľou

Medzilaborce

Prešov

Humenné

Žiar nad Hronom

Bytča

Kysucké NM

Dolný Kubín

Banská Štiavnica

Sobrance

Veľký Krtíš

Revúca

Michalovce

Levice

ŽarnovicaSpišská NV

Košice 4

kraj okres

nárast miery nezamestnanoti v SR 3,42 perc. bodu – increase in unemployment rate in the Slovak Republic 3.42 percentage points, nárast miery nezamestnanosti medzi januárom a sept. 2009 – increase in unemployment rate from January to September 2009, miera nezamestnanosti v janurái 2009 – unemployment rate in January 2009, kraj – region, okres – district,

Thus, the crisis mostly affected the regions with higher employment in industry or that have been underdeveloped for a long time with a high rate of unemployment, according to labour market surveys. Chart No. 4 shows this situation. According to labour market surveys, regions in the upper two quadrants recorded higher unemployment growth compared to the Slovak Republic average, in total it was 42 districts. Regions in the upper left corner are those with a lower unemployment rate compared to the Slovak Republic average and regions to the right are those with a higher unemployment rate, both according to labour market surveys. Unemployment, according to labour market surveys, was growing faster in regions with an above-average unemployment rate (24 districts in total). The crisis mostly affected the industrial production sector, in which employment dropped from January to September 2009 by 72,221 employees. The highest decrease was recorded within industrial production

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(decrease by 71,785 employees). More significant increases in unemployment, in connection with the loss of jobs in the industry, were recorded in West Slovakia. According to labour market surveys, the growth of unemployment in long-stagnant regions was also connected with the return of labour force from abroad. These regions are characterized by a high rate of labour migration both inside the Slovak Republic and abroad. The number of those employed abroad decreased on a year-on-year basis (2Q of 2009) by 40.8 thousand persons. The biggest drop was in the Czech Republic (by 22.3 thousand persons) and in the Great Britain (by 6.4 thousand persons). The largest number of those employed came from the Prešov Autonomous Region and the Nitra Autonomous Region (45.2 %). The biggest drop in persons working abroad was in the Prešov Autonomous Region (16.2 thousand). In connection with the loss of job opportunities in other regions, they were registered as the unemployed in their domestic regions. The poverty risk indicator is closely connected with the economic performance of regions, the level of revenues and the unemployment rate. Based on the data from a statistical survey of household revenues and living conditions the number of persons threatened by poverty in Slovakia in 2008 reached 595,000 persons, which accounts for 11 % of the total population. The highest poverty risk rate is recorded in economically weaker regions of south-east Slovakia. In the Prešov Autonomous Region this indicator reached 15.7 %, in the Banská Bystrica and Košice Autonomous Regions it reached 13 % of the population. Expected trends Existing economic development trends and overall social-economic trends are significantly disturbed by the global economic crisis. Therefore, the rate of expected development is problematic to predict. The Slovak economy was among the fastest growing economies in the EU. However, the estimated GDP decrease is distinctive. Eurostat's projections suggest that economic recovery can be relatively fast. Positive rates of growth in 2010 (1.9 %) and 2011 (2.6 %) are to be higher than the EU average (0.7 % and 1.6 % respectively). In the mid-term such growth will especially depend on the development of global markets. If economies in the developed western countries recover, we expect gradual economic recovery connected with slight employment growth. From this perspective, we can expect in the coming years an ongoing convergence process toward the EU average in relation to performance indicators. We expect economic recovery, connected with employment growth, to be slower in economically weaker regions and the impacts of the crisis will last longer in the regions of the south and east Slovakia. Economic growth in individual regions of Slovakia will continue to be strongly differentiated. It is most likely that disparities between the west and the east of the country will deepen. The main goal should be to create the conditions and a favourable environment for the development of business and investments, which would support further restructuring of regional economies and more effectively make use of existing potential. At this time, interventions focused on the alleviation of the impacts of the crisis seem to be important along with new development stimulus in the regions. The high specialization of the regional economy in the west of Slovakia brings positive effects toward the improvement of revenues and social status in times of economic growth; but in the time of crisis the industrial sector is the hardest hit. After the crisis is over and demand in Western Europe has recovered, it is possible to expect a further increase of industrial concentration in this part of Slovakia. In East Slovakia it will be necessary to provide prerequisites for economic growth, in particular accessibility and technology. We expect the service sector and knowledge-intensive services for companies

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will dominate in the Bratislava Region’s economy. Critically low innovation capacity will be a significant obstacle in the context of providing for sustainable economic growth through the enhancement of a knowledge-based economy.

21

B. Achieved results and perspectives

B.3. Contributions to fulfilling NSRF objectives in relation to output and input indicator data

B.3.1. NSRF strategic goal Based on the key disparities and development factors identified, a vision of the economic and social development of the Slovak Republic as well as a strategic goal for 2007–2013 was formulated. The strategic goal for the use of support from Cohesion Policy, by 2013, is to significantly increase competitiveness and performance in the regions, in the Slovak economy and in employment, while respecting the principles of sustainable development. In order to regularly monitor the progress of fulfilling this NSRF strategic goal, relevant context indicators with concrete target values have been developed. At the time of the development of the NSRF, the data for 2004 or 2005 were available in relation to individual indicators. These indicators show the overall status of competitiveness and the performance of the Slovak economy. The source of the most recent data for these indicators is Eurostat (see Table No. 3). Data are processed on an annual basis and are only available after some delay due to the difficulty of their processing. For this reason and for the purposes of the Strategic Report, only 2008 data are available. In case of the economy's energy demands, only 2007 data are available.

Table No. 3: Meeting the NSRF strategic goal

Stra

tegi

c go

al

NSRF Indicator Unit Reference year

Baseline

Data available as of 30 Sept. 2009*

Target value

To significantly increase the competitiveness and performance of the regions, the Slovak economy and employment by 2013, while respecting sustainable development

Energy demands of economy

kgOE/1000 EUR

2004 854.3 538.643 663.4

Innovativeness summary index (EIS)

Sequence 2005 22 224 18

GDP per capita in PPP in relation to the EU-15

% 2005 53.1 64.75 >60%

Labour productivity in relation to the EU-15

% 2005 60.9 71.86 >70%

Employment rate in relation to the EU-15

% 2005 88 92.67 >90%

Source: Central Coordination Authority * Last available data

3 Reference year: 2007, source:

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tsien020&plugin=1 4 Reference year: 2008, source: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/18& 5 Reference year: 2008, source:

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tsieb010 6 Reference year: 2008, source: http://ec.europa.eu/eurostat/product?code=TSIEB030&mode=view 7 Reference year: 2008, source:

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=tsiem010&tableSelection =1&footnotes=yes&labeling=labels&plugin=1

22

Based on available data it is possible to identify progress in fulfilling the NSRF strategic goal. Four out of the total of five indicators have exceeded the target values. For the summary innovativeness index, the Slovak Republic's position has remained the same since 2005 and it belongs among the so-called lagging countries. As to the positive evaluation of the progress achieved it is necessary to emphasise the fact that this development has not yet reflected the effects of the implementation of Cohesion Policy within this programming period . The reason is that the implementation of only a few projects started in the second half of 2008 and the effects in the form of results and impacts will show with a certain time delay (indicator data are for 2007 and 2008). The excess of the target values can be primarily attributed to the high growth of Slovak economy in recent years in the context of favourable development of the global economy. A significant decrease in the economy's energy demands was brought about by economic growth, industry restructuring and stronger competitiveness that creates pressure to lower energy demands (costs) of production. The Slovak Republic's objectives and measures in this field are defined in the Energy Effectiveness Action Plan for 2008 to 2010. Under this plan and the NSRF strategy the Regional OP (ROP), the Competitiveness and Economic Growth OP (Competitiveness and Economic Growth OP), the Research and Development OP (OP VaV), the Health OP (OP Z) and the Bratislava Region OP (OP BK) will most significantly contribute to higher energy efficiency in connection with other supporting programmes financed from the state budget. From the viewpoint of the summary innovativeness index, the Slovak Republic has maintained its 22nd place from among 27 EU Member States. Since 2005, the value of the summary index has slightly increased. The most important factors affecting index growth included: registration of patents, trademarks and designs, a higher number of university graduates and the development of company broadband connections. The low expenditure rates for research and development, as measured as a share of GDP, has been decreasing since 1997. In 2007, Slovakia, with a share of total research and development expenses to GDP at a level of 0.46 %, ranked as the worst country in the EU. Catching up with the European average, which achieved a level of 1.85 in the EU 27 and 1.93 in case of the EU 15 respectively, seems to be very problematic. In particular the critically low value of the share of company expenditures to GDP at a level of 0.18 % is ten times lower than the EU 27 average. Projects implemented within the Research and Development Operational Programme and the Competitiveness and Economic Growth Operational Programme should improve this. As early as 2008 the performance of the Slovak economy exceeded the target value – 60 % of the EU 15 average (GDP per capita in PPP). This was accompanied by the high growth of the economy over the last few years (2008 at a level of 6.4 %). Continuous data for 2009 demonstrate a significant slowdown of the pace of growth. In the context of the global economic and financial crisis and its impact it is possible to expect only slight growth in the Slovak economy and in the EU 15 economies in the near future. Taking into account the prognosis that Slovakia should belong to the countries with the highest pace of growth in the EU, this indicator should develop favourably also during the upcoming years. In recent years, labour productivity has recorded continual growth like other economic indicators, which helped Slovakia exceed the expected values for the monitored indicator. However, the first quarter of 2009 recorded a decrease in labour productivity; in the future we expect a reduction of the dynamics of the year-on-year decrease of labour productivity in constant and current prices8. Getting closer to the employment rate at the EU 15 level was primarily caused by a high economic growth connected with the growth of employment. This positive trend changed after the impact of the global crisis upon the Slovak economy and with a certain time delay upon unemployment as well.

8 Haluška, J., et. al., Short-term prediction of the development of Slovak economy in 2009. Infostat, Bratislava,

2009

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In connection with selected strategy, representing a combination of topical and territorial concentrations of contributions from Structural Funds and the Cohesion Fund, strategic priorities were set together with quantifiable objectives.

B.3.2 Strategic Priority 1: Infrastructure and regional accessibility Table No. 4: Meeting NSRF strategic priority 1

Specific priority Indicator Unit Reference year

Starting value

Status as of 30 Sept.09*

Target value

1.1 Regional infrastructure (Specific Priority Goal 1.1: Better access to and quality of civic amenities in the regions – Regional OP)

Number of improved educational infrastructure facilities Number 2006 0 n/a* 640 Number of improved social infrastructure facilities Number 2006 0 n/a 310 Number of projects providing long-term community sustainability and which increase their attractiveness Number 2006 0 n/a* 380 Length of reconstructed 2nd and 3rd class roads Number 2006 0 n/a* 600

1.2 Environmental infrastructure and environmental protection (Specific Priority Goal 1.2: Improving the environment and rational use of resources through

Greenhouse gases

'000 tons Certification Body2 equivalent

2004 51 046 46 9509

61 902

Percentage of the population connected to a WWTP

% 2004 54.1 59.410

81

Share of the population supplied with

% 2004 85 86.611

91

9 Reference year: 2007, source:http://enviroportal.sk/indikatory/detail.php?kategoria=2&id_indikator=475#0 10 Reference year: 2008, source: http://www.statistics.sk/pls/elisw/casovy_Rad.procDlg (the share of citizens living in

houses connected to public sewerage of the total number of citizens. (%)) 11 Reference year: 2007, source: http://enviroportal.sk/indikatory/detail.php?kategoria=1&id_indikator=449#0

24

Specific priority Indicator Unit Reference year

Starting value

Status as of 30 Sept.09*

Target value

the completion and improvement of environmental infrastructure in the Slovak Republic in accordance with EU and Slovak regulations and enhancing environmental TUR components - Environment OP)

drinking water from public water supply

Waste recovery rate

% 2005 44 52.712

60

1.3 Transport infrastructure and public passenger transport (Specific Priority Goal 1.3: Supporting sustainable mobility through the development of transport infrastructure and the development of public railway passenger transport - Transport OP)

Railway transport share of freight transport

% 2007 28.7 28.713

30

Railway transport share of passenger transport

% 2007 5.5 5.5 5.9

Density of higher class roads (highways and express roads)

km/th.km2 2007 9 9 11.5

Number of deaths due to road traffic accidents

The number of deaths/100 thousand citizens

2007 10.7 10.7 9.4

1.4 Healthcare infrastructure improvement (Specific Priority Goal 1.4: Improvement of conditions influencing

Number of supported health-care facilities

quantity 2007 0 1/1514

58

12 Reference year: 2006, zdroj: http://enviroportal.sk/indikatory/detail.php?id_indikator=487 13 Reference year: 2007, zdroj: RO OP Doprava 14 1 finished project, 15 contracted, source: RO OP Health/ITMS

25

Specific priority Indicator Unit Reference year

Starting value

Status as of 30 Sept.09*

Target value

population health condition in both productive and non-productive age by enhancing healthcare infrastructure quality – Health OP) Source: Central Coordination Authority * Data for the Regional OP are not available Strategic Priority 1: Infrastructure and Regional Accessibility is being performed via 4 specific priorities. Each specific priority is connected to a concrete OP. The status of achieving the objectives set for specific priorities is monitored primarily through result and impact indicators at the OP level. With regard to the current implementation status of the NSRF and relevant Ops, the effects of Cohesion Policy have not yet shown themselves. Moreover, with regards to indicators acquired from official statistics, only the 2008 or 2007 data are available. In most cases these indicators reflect development in a wider scope and they are not specifically defined for interventions supported by the Structural Fund and the Cohesion Fund. In order to supplement information on actual implementation progress “core” indicators of OP that show a change are compared to the initial status of these indicators. As far as Specific priority 1.1: Regional Infrastructure is concerned, no data for the performance of selected indicators was available because at the time of repairing the ROP the Managing Authority in cooperation with the Central Coordination Authority was working on the supplementation of indicators and target values for projects approved in the framework of initial call for projects. Within Priority Axis 1: Educational Infrastructure, 450 projects have been approved, of which 277 projects already had a contract granting non-returnable financial aid. All projects in this priority axis are primarily focused on technical improvements to pre-school facilities and elementary schools, which are a prerequisite for providing new and higher quality services to students. The number of users of these services, after completion of the approved projects (450), should significantly exceed the threshold of 100 000.

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Chart No. 5

Regionálna infraštruktúra Cieľ ŠP 1.1. (ROP)

640

310380

600

0

100

200

300

400

500

600

700

Cieľová hodnota

Počet technicky zhodnotenýchzariadení vzdelávacej infraštruktúry

Počet technicky zhodnotenýchzariadení sociálnej infraštruktúry

Počet projektov zabezpečujúcichtrvalú udržateľnosť sídiela zvyšujúcich ich atraktivitu

Dĺžka zrekonštruovaných ciest II.a III. triedy

Regionálna infraštruktúra cieľ ŠP – Regional infrastructure the Specific Priority Goal 1.1. (ROP), Počet technicky zhodnotených zariadení vzdelávacej infraštruktúry –number of improved educational infrastructure facilities, Počet ... sociálnej infraštruktúry –number of improved social infrastructure facilities, Počet projektov zabezpečujúcich... – Number of projects providing long-term community sustainability and which increase their attractiveness, Dĺžka zrekonštruovaných... –Length of reconstructed 2nd and 3rd class roads, Cieľová hodnota – Target value

Within Specific Priority 1.2: Environmental Infrastructure and Protection, greenhouse gas emissions decreased in 2007 compared to 2004 by 4,091,000 tons of Certification Body equivalent. The share of the population connected to a waste water treatment plant (WWTP) increased, compared to 2004, by 3.3 % and in 2008 it reached 57.4 % of the total population. Only slight progress was made towards fulfilling the set goal: 81 % of the population to be connected. The share of the population supplied with water from public water supplies is another important indicator within the given priority. The initial share of these citizens accounted for 85 % and in 2007 their number slightly increased to 86.4 % of the population. On the other hand, there was obvious progress in the fulfilment of the “core” indicators objectives within the Environment OP: the number of people connected to newly built drinking water distribution networks (target value exceeded) and the number of equivalent citizens connected to a newly built sewage networks (more than a 30 % improvement). There was also progress in fulfilling the waste recovery rate goal as the waste recovery rate increased to 52.7 %, which accounts for more than half of the 2013 target value (2015). The current implementation of the Environment OP supported 20 measures in the field of flood protection, re-cultivated and re-organized landfills of the area of 541,554 m2, 14 documents for taking care of territories, and 15 nature and landscape protection facilities. A majority of projects in the Environment OP were approved within Priority Axis: 4 Waste Management; 112 projects with a total volume of more than € 200 mil. Supported projects should contribute to important increases in the number of separated waste collection facilities and capacities for separating communal waste, waste recovery and hazardous waste disposal

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Chart No. 6

59,4

86,6

52,7

81

91

60

0

50

100

150

200

250

Aktuálny stav k 30. 09. 2009 Cieľová hodnota

Infraštruktúra a regionálna dostupnosť Cieľ 1.2.

Miera zhodnocovania odpadov(r.2005)

Podiel obyvateľovzásobovaných vodou z verejnýchvodovodov (r.2004)

Percento obyvateľov napojenýchna ČOV (r.2004)

Infraštruktúra a regionálna dostupnosť Cieľ 1.2 – Infrastructure and regional accessibility Goal 1.2, Miera zhodnocovania odpadov – Waste recovery rate, Podieľ obyvateľov... –Share of the population supplied with water from public water supplies (2004), Percento obyvateľov... – Percentage of the population connected to a WWTP (2004), Aktuálny stav – Current status as of 30. Sept. 2009, Cieľová hodnota – Target value In terms of Specific Priority 1.3: Transport Infrastructure and Public Passenger Transport, where objectives are being met through the Transport OP, there was no change in the situation compared to 2007 within the period monitored. However, as of 30 September 2009, 14 projects were approved, while contracts granting non-returnable financial aid have already been concluded with 12 beneficiaries (out of 14 approved projects). The Managing Authority for the Transport OP submitted 6 major projects in total to the European Commission. 2 applications were approved (Modernization of the Žilina – Krásno nad Kysucou railroad and D1 Sverepec – Vrtižer). 5 major projects are in the implementation phase and 1 major project (D3 Hričovské Podhradie – Žilina, Strážov) has been finished. The Health OP has only 1 finished project to support healthcare facilities. Another 15 projects in the implementation phase are supported within both priority axes. So far, 3 jobs have been created (2 for women).

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B.3.3 Strategic Priority 2: Knowledge-based economy Table No. 5: Meeting of Strategic Priority 2 of the NSRF

Specific priority Indicator UNIT Reference year

Initial value

Status as of 30 Sept. 2009

Final value

2.1 IT use throughout society (Specific Priority Goal 2.1: Creation of an inclusive information society as a means for developing a high performance knowledge-based economy - Information Society OP)

On-line accessibility of 20 basic public services

% 2006 20 3515 100

Broadband Internet penetration (connections per 100 citizens)

The number

of connect

ions /100

citizens

2006 4 11.4716 30

ICT share of total added value created by companies

% 2005 5.1 5.117 10

2.2 Research and development (Specific Priority Goal 2.2: Modernization and improvement of the research and development support system so that it contributes to stronger competitiveness of the economy, the elimination of regional disparities, the

Total research and development expenditure as a % of GDP

% 2005 0.51 0.4618 1.5

Number of EPO patent applications per 1 mil. citizens

quantity

2003 8.1 6.0919 18

Number of USPTO patents granted per 1 mil. citizens

quantity

2000 1.28 1.0920 2

15 Reference year: 2007, source: http://ec.europa.eu/information_society/eeurope/i2010/docs/benchmarking/egov_benchmark_2007.pdf

16 Reference year: 2008, source: http://www.oecd.org/document/23/0,3343,en_2649_34449_33987543_1_1_1_37441,00.html

17 Recent data are not available 18 Reference year: 2007, source: Research and Development RO OP 19 Reference year: 2006, source:

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tsiir060&plugin=1, Note – with regard to changes in the policy of the monitoring of statistics related to patents within the EÚROSTAT, the data stated on a EÚROSTAT website are not compatible with data published before 2007. That means that the 2006 value stated in the table cannot be compared to the 2003 initial value. New initial value for 2003 is 5.67.

20 Reference year: 2003, source: http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tsiir070&plugin=1, Note - with regard to changes in the policy of the monitoring of statistics related to patents within the EÚROSTAT, the data stated on a EÚROSTAT website are not compatible with data published before 2007. That means that the 2003 value stated in the table cannot be compared to the 2000 initial value. New initial value for 2003 is 1.49.

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Specific priority Indicator UNIT Reference year

Initial value

Status as of 30 Sept. 2009

Final value

creation of new innovative (high-tech) small and medium-sized enterprises and the creation of new jobs – Research and Development OP) 2.3 University infrastructure (Specific Priority Goal 2.3: Enhanced university education quality via investment into material infrastructure - Research and Development OP)

Share of the population with university education aged 24-64

% 2003 11.8 14.221 13

2.4 Supporting enterprise and service competitiveness via innovation (Specific Priority Goal 2.4: Providing for sustainable economic growth and employment - Competitiveness and Economic Growth OP)

Share of renewable resources in gross energy consumption22

% 2005 16.5 16.623 19

SMEs completing innovations (% of total number)

% 2005 15.7 17.924 18.6

Export of high-tech technological products (share of total exports)

% 2006 5.43 5.4325 6.2

Total number of foreign visitors

Quantity in '000

2005 1514 1 76726 1710

Foreign tourism balance

mil. EUR

2006 452.62

295.327 559.65

21 Reference year: 2006, source: Research and development RO OP 22 Data corresponds with the share of electricity generated from OZE in total electricity consumption 23 Reference year: 2007, source: http://enviroportal.sk/indikatory/detail.php?kategoria=3&id_indikator=509#0 24 Reference year: 2008 (Eurostat, 2006), source: http://www.scribd.com/doc/11260228/European-Innovation-

Scoreboard-2008 25 Recent data are not available, source:

http://epp.eurostat.ec.europa.eu/tgm/web/_download/Eurostat_Table_tsiir160HTMLDesc.htm 26 Reference year: 2008, source: ŠÚ SR, http://www.statistics.sk/pls/elisw/casovy_Rad.procDlg 27 Reference year: 2008, source: MH SR, http://www.economy.gov.sk/7387-menu/129897s

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Strategic Priority 2: Knowledge-Based Economy consists of 4 specific priorities performed by 3 OPs: the IS OP, the Research and Development OP and the Competitiveness and Economic Growth OP. There was slight progress in fulfilling the objectives set within IS OP implementation. Accessibility to 20 % of basic public on-line services increased in 2007 to 35 %, which represents a 15 % increase compared to 2006. It is expected that projects implemented within the programme will significantly contribute to an increase of the on-line accessibility of monitored services for the public. Also, there was a higher penetration of broadband Internet from 4 connections per 100 persons to 11.47 connections per 100 persons. For the ‘ICT share in total added value created by companies’ indicator, only data for 2005 reference year was available. Chart No. 7 Podiel ICT na...- ICT share in total value added created by companies (reference year 2005 in =), Východzia hodnota – initial value, Stav k ... – As of 30. Sept. 2009, Cieľová hodnota – Target value As of the date of this report, the first 9 projects were approved within Measure 1.1: Electronisation of Public Administration and Development of Electronic Services at the Central Level. We expect that effects of IS OP implementation will show themselves more markedly at the specific priority level after 2011, when these services are available to citizens. As to Specific Priority 2.2: Research and Development, three measurable indicators have been selected. In the context of effective support for the development of a knowledge-based economy, the volume of the research and development expenditures and its share of GDP are of fundamental importance. While in 2005 the total research and development expenditures accounted for about 0.51 % of GDP, in 2007 they dropped to 0.46 % of GDP. Also two additional indicators in the field of research and development have recorded negative development, i.e. at present they are at a lower level than their initial value. The number of EOP patent applications per 1 mil. citizens since 2003 dropped from 8.1 to 6.09 in 2006. Simultaneously, there was a drop in the number of USPTO patents granted from 1.28 and 1.49 respectively to 1.09 (per 1 mil. citizens). This change and the negative development in the field of research and development will require priority attention. In this field it is necessary to concentrate and coordinate public interventions with activities supported from

Podiel ICT na celkovej pridanej hodnote vytvorenej v podnikoch (refer.rok 2005 v %)

Východzia hodnota 5,1 Stav k 30.9.09 5,1 Cieľová hodnota 10

1

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Structural Fund resources. As of 30 September 2009, 130 projects were supported from the Research and Development OP. Specific Priority 2.3: University Infrastructure monitors the share of the population with university education in terms of the population aged 24 to 64. While this indicator entered evaluation with a value of 11.8 % (2003), the share of people with university education in the population aged 24 – 64 reached 14.2 % as early as 2006. Implementation of the Competitiveness and Economic Growth OP contributes to fulfilling the objectives of Specific Priority 2.4: Supporting Enterprise and Service Competitiveness, especially via innovation. We observed a slight improvement in comparison with initial values in the share of renewable energy resources in gross electricity consumption, while the share of SMEs carrying out internal innovations in the total number of SMEs in Slovakia has increased by 14 %. Current data on the share of high-tech product exports in terms of total exports was not available at the time of processing the report. At the OP level, 219 projects were supported by the end of September 2009 – most of them within Priority Axis 1: Innovations and Growth of Competitiveness. There was a significant increase and exceeding of the target value in terms of the number of foreign visitors in the Slovak Republic indicator. The number increased by 253,000 from 2005 until 2008 (the target value was 1,710,000 visitors). However, the foreign tourism balance in 2008 simultaneously dropped by almost 35 % compared to 2006. The decrease in the tourism balance was influenced by two factors, i.e. the stronger exchange rate of the Slovak Koruna to foreign currencies and at the same time the higher tendency of Slovak citizens to travel abroad28. The effects of projects supported from the Competitiveness and Economic Growth OP should start to show themselves over a period of 1 to 2 years. The biggest number of approved projects can be found within Measure 1.1: Innovations and Technological Transfer: 240 in total. These should be reflected in higher SME competitiveness and in subsequent sales increases.

B.3.4 Strategic Priority 3: Human resources Strategic Priority 3: Human resources is implemented through OPs co-financed from the European Social Fund: Employment and Social Inclusion OP and the Education OP. The first indicator of this Priority Axis is the share of human resources expenditures (education) in terms of GDP. The volume of expenditure for the development of human resources in 2003 accounted for 4.4 % of GDP, but it gradually decreased to 3.79 % in 2006. Chart No. 8

28 source: http://www.rokovania.sk/appl/material.nsf/0/74356017B91DAE72C1257479002FE185?OpenDocument

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Plnenie strategickej priority 3 NSRR Cieľ ŠP 3.1. (Refer. rok 2003;Výdavky na vzdelávanie-spolu; % z HDP)

0

1

2

3

4

5

6

Rad1 4,4 3,79 5,2

Východzia hodnota Aktuálny stav k 30.9.2009 Cieľová hodnota

Plnenie strategickej... – Meeting Strategic Priority 3 of the NSRF Goal, Specific Priority 3.1. (Reference year 2003; Education expenditures – total; % of GDP), Východzia hodnota – Initial value, Aktuálny stav... – Status as of 30 Sept. 2009, Cieľová hodnota – Target value, Rad 1 – Series 1

The indicator shows an obvious lag behind the target state, which is 5.2 % of GDP. However, it must be said that the above value does not reflect ECF and national co-financing resources in the programming period from 2007–2013. Within the Education OP, 227 projects were contracted as of 30 September 2009 in a total volume of more than € 140 mil. In 2003 4.6 citizens per 100 citizens aged 24-64 participated in lifelong learning. This ratio decreased in 2008 to 3.3, which means a 26 % drop. A gradual increase in this indicator can be expected in connection with the commencement of Ministry of Education national project implementations in the last quarter of 2008, which are focused on general education of the educating public. In connection with fulfilling Specific Priority 3.2: Supporting the Growth of Employment, Social Inclusion and Capacity Building, 2 indicators are being monitored: the poverty risk rate after social benefits expire and the long-term unemployment rate. The poverty risk rate shows a positive trend; it dropped from 13 % in 2005 to 11 % in 2008. The long-term unemployment rate, which represents a long-term problem on the Slovak labour market, dropped from 10.2 % in 2006 to an intermediate value of 6.6 % in 2008, which far exceeded the required value (9.2 %). However, with regard to the ongoing economic and financial crisis we expect an increase of the share of the long-term unemployed in the total number of the unemployed. The implementation of projects within the Employment and Social Inclusion OP and specific preventive and active labour market measures should alleviate negative impacts of the crisis in this field. This programme involved the largest number of contracted projects from all OPs of the NSRF totalling 589 projects in a total volume (both EU and national public resources) of more than € 406 mil.

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Table No. 6: Meeting Strategic Priority 3 of the NSRF

SP

Specific priority Indicator UNIT Reference year

Initial value

Current state as of 30 Sept. 2009

Final value

3. H

uman

res

ourc

es

3.1 Modern education for a knowledge-based society (Specific Priority Goal 3.1: Providing for long-term competitiveness of the Slovak Republic through educational system adjustment to the needs of a knowledge-based society – Education OP)

Human resources expenditures (total public expenditure for education) as a % of GDP

% 2003 4.4 3.7929 5.2

Number of citizens participating in lifelong learning per 100 citizens aged 25-64

% 2005 4.6 3.330 12.5

3.2 Supporting employment, social inclusion and the capacity building growth (Specific Priority Goal 3.2: Employment growth, unemployment decrease, social inclusion and administrative capacity building - Employment and Social Inclusion OP)

Poverty risk rate after social benefits expire

% 2005 13 1131 9.2

Long-term unemployment rate

% 2006 10.2 6.632 9.2

Source: Central Coordination Authority

Within the present implementation of the Educational OP, a majority of projects were approved in Priority Axis 1: Reform of Educational System and Professional Training, particularly in Measure 1.1: Modernization of the traditional school system. Most of the 305 supported projects relate to concrete programmes focused on enhancing quality of education at elementary and secondary schools. Within Measures 2.1 and 2.2, the outputs and results of which are relevant for the indicator regarding to the share of citizens participating in lifelong learning per 100 citizens aged 25 – 64, 14 projects have been approved so far in a total volume of more than € 21 mil. One national project named Supporting Further Education in the volume of € 7 mil. is being implemented within Measure 2.1 Most projects, 13 in total, relate to Measure 2.2 and focus on supporting further education in the health service sector. Three published calls for non-returnable financial aid applications were completed by higher territorial units and were approved in the volume of more than € 14 mil. for further education of the health-service staff. A call for the submission of applications for non-returnable

29 Reference year: 2006, source:

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tsdsc510&plugin=1 30 Reference year: 2008, source:

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=de&pcode=tsiem080 31 Reference year: 2008, source:

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tsisc030&plugin=1 32 Reference year: 2008, source:

http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=tsisc070

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financial aid for Measure 2.2 with a total allocation of € 15 mil. is scheduled for January 2010. No call is scheduled for Measure 2.1 in 2010. So far, the Employment and Social Inclusion OP has mainly supported demand-oriented projects, although in the context of the economic crisis, projects in the field of creation and sustainability of jobs through higher staff and company adaptability have been supported as well. A significant number of projects were approved for supporting the social inclusion of persons threatened by social exclusion with special emphasis on marginalised Roma communities. 230 approved projects should increase the quality of provided care services support communal work in disadvantaged locations and marginalized communities concentrated mainly in south-east Slovakia. The effects of national projects that support the preparation of job applicants for returning to the labour market should become visible with the expected economic recovery in 2010 and the creation of new jobs.

B.4. Results of completed evaluations and the Central Coordination Authority's activities in the field of providing and coordinating evaluations in the NSRF framework

B.4.1 Completed NSRF and OP evaluations In the 2007 - 2013 programming period , in addition to ex-ante NSRF and OP evaluation one evaluation was carried out at the NSRF level – “Evaluation of the Fulfilment of Cohesion Policy Objectives Through Stronger Competition, Creation of New Job Opportunities and Higher Employment and the Evaluation of the Impact of the Economic Crisis on Employment”, which was one of the documents necessary for the preparation of the strategic report (the evaluation was finished as of 7 December 2009). In the framework of operational programmes, a regular evaluation of the Research and Development OP 2009 was completed and titled: “Evaluation of Establishing Research and Development OP Objectives and Objectives for the Priority Axes of the Research and Development OP with Regard to the Real Needs of Applicants/Beneficiaries and the Fulfilment of Objectives Through the Implementation of Research and Development OP activities”. The purpose of this evaluation was to enhance the quality, efficiency and effectiveness of the management and financial management of the Research and Development OP, its implementation processes, and simultaneously to identify eventual problems with fulfilling Research and Development OP objectives, i.e. the overall goal and specific objectives. The subject matter of evaluation – 3 areas: - Establishment of Research and Development OP objectives and priority axes in relation

to the actual needs of beneficiaries and the fulfilment of objectives, - Evaluation of the effectiveness and relevancy of the established system of measurable

indicators with regard to monitoring the fulfilment of objectives and eventual adjustment of objectives,

- Manner of implementing complementarities and synergy in relation to other OPs. The summary of and recommendations for setting the Research and Development OP objectives and all priority axis objectives in relation to the actual needs of

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applicants/beneficiaries and the fulfilment of objectives by implementing Research and Development OP activities: 1. Establishment of Research and Development OP objectives and Research and Development OP priority axes in relation to the actual needs of applicants and the fulfilment of objectives. The Research and Development OP’s announced calls react directly to the real needs of applicants, who are primarily represented by universities, state universities, the Slovak Academy of Sciences and its institutions, research and development organizations or institutions established by central state administration bodies, and non-governmental research and development organizations. The structure and establishment of individual priority axis objectives and Research and Development OP measures were set up adequately with regard to the needs of potential beneficiaries and also with regard to the need to improve research and development in the Slovak Republic. Based on the evaluation carried out it has been found that it is not necessary to change the structure and set-up of Research and Development OP priority axes and measures. 2. Evaluation of the effectiveness and relevancy of the established system of measurable indicators with regard to monitoring the fulfilment of objectives and eventual adjustment of objectives. The system of measurable indicators for the Research and Development OP creates a coherent unit and corresponds to the defined requirements for a real, clear, simple and transparent quantification of expected results and impacts at a level of the program, individual priority axes and measures. The selected measurable indicators are defined comprehensibly and the set-up of the system of measurable indicators is balanced and justified in regard to the needs of OP; the use of such indicators will make it possible to measure the direct effects of individual interventions at the program, priority axis and measure levels. Applied indicators are connected to relevant OP and priority axis objectives stated in the first part of the evaluation as they make it possible to adequately quantify the rate at which individual OP objectives are fulfilled. The present set-up of the system of measurable indicators makes it possible to carry out effective monitoring and at the same time to adequately assess implementation. In terms of the above it is not necessary to adjust the set-up of the system of measurable indicators. 3. Manner of implementing complementarities and synergy in relation to other OPs The Research and Development OP is complementary with the Education OP, the Bratislava Region OP and the Regional OP. Conclusion: In accordance with the number of applications submitted in the framework of calls it can be said that overall goal of the Research and Development OP and the objectives of priority axes have been set up appropriately and the management and control system accepts the needs of applicants/beneficiaries. In the future it will be necessary to continue to take into account the needs of applicants/beneficiaries in relation to the preparation of calls and also in relation to providing information to potential applicants. The set-up of the system of measurable indicators for the Research and Development OP corresponds with the present requirements of the OP and monitors the division of its

36

objectives, while selected measurable indicators reflect the need for monitoring and subsequent evaluation of the OP. In relation to other OPs there is complementarities and synergy with the Research and Development OP; however this will need to be improved and will be based on the announcement of calls for the submission of applications for non-returnable financial aid in order to implement demand-oriented projects within Priority Axis 1: Research and Development Infrastructure and Priority Axis 3: Bratislava Region Research and Development Infrastructure, scheduled for 2010.

B.4.2 Central Coordination Authority's activities in the field of NSRF evaluation and Managing Authority coordination in the field of evaluation The Ministry of the Construction and Regional Development performs the tasks of the Central Coordination Authority for the management and coordination of aid from the Structural Fund and the Cohesion Fund within the Slovak Republic’s NSRF for the 2007–2013 programming period . The Central Coordination Aurhority's competencies also apply to evaluation. The Central Coordination Authority's tasks in the field of NSRF evaluation for the 2007–2013 programming period are performed by the Evaluation Unit of the EU Funds Coordination Department, Regions Development Strategy Section of the Ministry of Construction and Regional Development (hereinafter the “Evaluation Unit”). The Evaluation Unit was established on 24 October 2007 via Minister of Construction and Regional Development Decision No. R-07-09-M dated 23 October 2007, which went into effect on the same day. Based on this decision, the competencies of the Managing Authority for the Community Support Framework (CSF) and the Central Coordination Authority in terms of evaluation were transferred from the Monitoring and Evaluation Unit to the Evaluation Unit as a separate organizational unit. The Evaluation Unit performs and coordinates NSRF evaluations and coordinates OP Managing Authorities and HP coordinators in terms of evaluation. At the same time it performs tasks of the Technical Assistance OP Managing Authority in terms of evaluation. The Evaluation Unit carried out the following activities in the 2007–2013 programming period within NSRF evaluation and coordination of the OP Managing Authorities and HP coordinators: a) NSRF evaluation In the framework of NSRF evaluation system creation and development, the Evaluation Unit developed the NSRF Evaluation Plan for the 2007 - 2013 programming period , which was adopted by the National Monitoring Committee’s NSRF resolution No. National Monitoring Committee NSRF/2009/1 dated 15 July 2009. According to this plan there will be 16 NSRF evaluations in the 2007 - 2013 programming period ; in addition to these evaluations it is possible to perform ad-hoc NSRF evaluations.

1. It prepared the NSRF Evaluation Plan for 2009 as a summary document containing scheduled evaluations for this year divided into NSRF, OP and HP section; this plan

37

was adopted by the National Monitoring Committee’s NSRF resolution No. National Monitoring Committee NSRF/2009/1 dated 15 July 2009.

2. Due to the engagement of competent public administration bodies into the process of

developing the NSRF evaluation system in the Slovak Republic, the Central NSRF Evaluation Committee of the Slovak Republic was established, effective from 25 May 2009, as an advisory body to general manager of the Regional Development Strategy Section of the Ministry of the Construction and Regional Development for evaluation. The Minister of Construction and Regional Development approved the Central Evaluation Committee's Statute and rules of procedure for NSRF evaluation after a prior consultation exercise. The Central Evaluation Committee's task is to participate in resolving strategic, conceptual and methodical affairs in terms of evaluation. The general manager of the Regional Development Strategy Section of the Ministry of the Construction and Regional Development is the chairman of the Central Evaluation Committee, and its members are:

- The director of the EU Funds Coordination Division of the Regional Development Strategy Section,

- The head of the EU Funds Coordination Division – Evaluation Department, Methodology Department and Monitoring Department,

- Representatives of managing authorities of the NSRF Operational Programmes, - Representatives of NSRF Horizontal Priority coordinators and - A representative of the Statistical Office of the Slovak Republic (Each body is represented by one member).

Members of the Central Evaluation Committee regularly participate in consultation exercises related to individual evaluation materials before they were approved, e.g. materials under Paragraph 1 and 2 of the related section of the 2009 Strategic Report.

3. It updated NSRF appendices – Appendix No. 9 and Appendix No. 13 - based on the need to synchronize NSRF, OP and HP indicators. These tasks were updated in cooperation with the OP Managing Authorities, HP coordinators and other members of the Central Evaluation Committee. Updated NSRF appendices were approved by National NSRF Monitoring Committee members at its meeting on 30 November 2009.

4. It prepared new parts of the Structural Fund and Cohesion Fund Management System

for the 2007 - 2013 programming period , version 3.1, focused on evaluation - Part 3.4 NSRF Evaluation and Part 4.4 OP Evaluation, which includes a framework of the rights and duties of the Central Coordination Authority, OP Managing Authorities and HP coordinators in the field of evaluation.

5. It prepared a Summary Report of NSRF Evaluation Activities and Evaluation Results

for 2008, which was delivered to the National NSRF Monitoring Committee on 7 December 2009. This report was prepared on the basis of results of Evaluation Department's activities in the field of NSRF evaluation and coordination of OP Managing Authorities and HP coordinators, and summary reports of evaluation activities and evaluation results for 2008 delivered by HP coordinators to OP Managing Authorities.

6. Specification of the following evaluations were prepared in connection to a public

procurement of a service provider – NSRF and Technical Assistance OP evaluations in 2009 to 2011:

38

- Evaluation of fulfilment of Cohesion Policy objectives through stronger

competitiveness, creation of new job opportunities and higher employment, and the evaluation of the impact of the economic crisis on employment.

- Evaluation of the impact of Cohesion Policy implemented from 1 January 2004 to 31 December 2008 on the standard and quality of employment in the Slovak Republic.

- Evaluation of the suitability of established OP management and control systems within Convergence objectives and an evaluation of the effectiveness and efficiency of their functionality.

- Evaluation of the suitability of established OP management and control systems within Regional Competitiveness and Employment objectives and OPs common for Convergence objectives, Regional Competitiveness and Employment objectives and an evaluation of the effectiveness and efficiency of their functionality.

- Evaluation of the state of realising and fulfilling Technical Assistance OP objectives.

- Evaluation of NSRF Strategic Priority 1: Infrastructure and Regional Accessibility goal fulfilment

- Evaluation of NSRF Strategic Priority 2: Knowledge-Based Economy goal fulfilment.

- Evaluation of NSRF Strategic Priority 3: Human Resources goal fulfilment. - Evaluation of Marginalized Roma Communities Horizontal Priority goal

fulfilment. The above specifications were prepared according to the NSRF Evaluation Plan for the 2007–2013 programming period and the Technical Assistance OP Evaluation Plan for the 2007–2013 programming period .

7. It provided for the “Evaluation of Cohesion Policy goal fulfilment through stronger competitiveness, the creation of new job opportunities and higher employment and an evaluation of the impact of the economic crisis on employment”; results of these evaluations serve as documentation for the preparation of this Strategic Report. The above evaluation was finished on 7 December 2009.

8. It developed the Slovak Republic’s 2009 Strategic Report under Article 29 of the

Council Regulation (EC) No. 1083/2006 with content and structure following the Indicative Structure for National Regional Reports for 2009 as recommended by the European Commission. The report was prepared according to Ministry of the Construction and Regional Development data acquired as a result of activities arising from the state administration body's competencies in the field of regional development, the results of Central Coordination Authority activities, results of activities in the field of cross-border cooperation implemented within the Cohesion Policy objectives – EU Territorial Cooperation, further on the basis of results of the “Evaluation of Cohesion Policy goal fulfilment through stronger competitiveness, the creation of new job opportunities and higher employment and an evaluation of the impact of the economic crisis on employment” and documentation and data provided by the following bodies:

- OP Managing Authorities,

39

- The Government Office of the Slovak Republic, - Certification Body and Financial Policy Institute (Ministry of the Finance), - Ministry of the Environment, - Ministry of the Economics, - Office for Public Procurement.

9. The Technical Assistance OP project was developed in order to provide financing for

NSRF and Technical Assistance OP evaluation activities in the 2007 - 2013 programming period .

10. According to the results of a coordination meeting between representatives of the

Visegrad4 (V4) states active in the field of evaluation, which took place on 24 – 25 November 2008 in Pultrusk (Poland), it prepared a document related to the evaluation and the history of evaluation in the Slovak Republic, which constitutes a part of a joint publication of the V4 states called “Evaluation Systems in the Visegrad Member States”. The above joint publication was prepared under the auspices of the Polish Ministry of Regional Development and was distributed at the “New Methods of Cohesion Policy Evaluation” conference organized by the European Commission’s General Directorate for Regional Policy, which took place in Warsaw on 30 November – 1 December 2009.

b) Coordination of OP Managing Authorities and HP coordinators in terms of evaluation:

1. It developed and issued Central Coordination Authority Guideline No. 5 titled “Guideline for the Preparation of Operational Programme Evaluation Plan for the 2007–2013 programming period ” (hereinafter the “Guideline”) effective from 19 September 2008. The Guideline was prepared in connection with the Central Coordination Authority's coordination and methodical competencies in the field of NSRF, OP and HP evaluation and in order to provide for a unified framework of OP and HP evaluations for the 2007–2013 programming period , which made it possible to connect OP and HP evaluation system with NSRF evaluations. The Guideline was published on the online at: www.nsrr.sk.

2. It coordinated and methodically managed the preparation of evaluation plans for all

OPs and HPs; coordination related to their material, time, financial and organizational aspects. Within this coordination it prepared comments to and opinions regarding evaluation plans for individual OPs and HPs for the 2007–2013 programming period up to the point of synchronization of all OP and HP evaluation plans for the 2007–2013 programming period with the Guideline. Each OP evaluation plan was approved by the competent OP monitoring committee.

3. It prepared a directive for the preparation of a summary report of evaluation activities

and results for OP/HP for 2008, which included requested content of such a report; the directive was sent to the OP Managing Authorities and HP coordinators in a form of letter No. Ministry of Construction and Regional Development - 2009 - 11532/10025-1 dated 24 February 2009; the duty to prepare the above reports arise from the provision of Paragraph 20, Part 4.4 Evaluation, Structural Fund and Cohesion Fund Management System for the 2007–2013 programming period .

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4. Within the performance of tasks of Technical Assistance OP Managing Authorities in the field of evaluation, it prepared an Technical Assistance OP Evaluation Plan for the 2007 - 2013 programming period , which was approved by the Technical Assistance OP Monitoring Committee on 22 September 2008.

B.5. Information on expenditures and commitments Given the time demands as to the preparation of the legislative and implementation framework for Cohesion Policy in the 2007–2013 programming period and preparations of programming documents for the use of Structural Fund and Cohesion Fund money in the Slovak Republic, the European Commission approved OPs as late as September – December 2007. The adoption of the programmes themselves was preceded by negotiation between the Slovak Republic and the European Commission related to NSRF. The European Commission adopted the NSRF on the basis of the CCI 2007 SK 16 UNS 001 Decision dated 17 August 2007. The Slovak Republic did not use the opportunity to start implementing OPs before their official approval by the European Commission. Therefore, actual implementation started as late as 2008, although at the end of 2007 the first calls for the submission of projects (Employment and Social Inclusion OP) were announced. Within the Employment and Social Inclusion OP, the Slovak Social Development Fund (FSR) as the Intermediary Body under the Managing Authority announced a closed call for the submission of applications for non-returnable financial aid for beneficiaries who implemented the Programme of Support for Development of Communal Social Work in Communities between 2004-2007 on 21 December 2007 and a call for the submission of applications for non-returnable financial aid within the framework of the Employment and Social Inclusion OP – FSR – 2007/2.1/02. In 2008, public administration bodies responsible for managing and implementing Cohesion Policy in the Slovak Republic were working on finishing documents that fine tuned the functioning of the system of implementing individual OPs, especially programming manuals, internal manuals, descriptions of management and control systems, etc. At the same time, most institutions took steps towards hiring the required number of employees participating in the Structural Fund and Cohesion Fund implementation. Subsequently, most Managing Authorities/Intermediary Bodies under a Managing Authority during the year started with announcements of calls for the submission of applications for non-returnable financial aid as late as 2008. As of 30 September 2009, 9,964 applications for non-returnable financial aid were submitted in the total volume of € 23.24 billion33 (EU resources and national public resources) within the framework of published calls for submission of applications for non-returnable financial aid. Off this number, 2,463 projects were approved in the total volume of € 3.51 billion, which accounts for 26.20 % of the total allocation of EU resources and national public resources. The number of approved projects that were provided with a signed contract for the provision of non-returnable financial aid from a Managing Authority/ Intermediary Body under a Managing Authority reached 1,787 projects within the NSRF OP. The volume of contracted EC funds exceeded € 2.1 billion, or 18.54% of the total allocation of EC resources for the programming period

33 Including individual and national projects

41

B.5.1 Financial implementation by OP A summary overview of EC financial resource allocation for individual OPs and the NSRF along with data on the volume of EC funds within the contracts granting non-returnable financial aid for implementing projects and the volume of declared European Commission expenditures are included in Appendix 1 of the Report. The total allocation of EC funds for Cohesion Policy execution in the Slovak Republic for the 2007 - 2013 programming period is € 11.36 billion. In order to meet objectives set in the NSRF in accordance with selected strategy, contributions from 11 OPs are to support the Convergence Goal and the Regional Competitiveness and Employment Goal. Of this number, 7 OPs are allocated to only the Convergence Goal34 and 1 OP to only the Regional Competitiveness and Employment Goal35, while 3 programmes support intervention within both objectives59a. The Transport OP and the Environment OP are financed from European Regional Development Fund resources and from the Cohesion Fund. The Employment and Social Inclusion OP and Education OP are financed from European Social Fund funds. Together with progress in financial and physical project implementation, where co-financing was based on entering into contracts to grant non-returnable financial aid in the framework of OPs, we expect, within a 12-month horizon, an obvious improvement in the drawdown on funds at the national level and subsequently on the share of the European Commission's declared expenditures in the total allocation for the 2007–2013 programming period . A majority of EC funds go to the programmes that contribute to fulfilment of NSRF Strategic Priority 1: Infrastructure and Regional Accessibility, which focuses on the improvement of infrastructure in the regions and the efficiency of related public services. This fact reflects the level of quality of existing infrastructure in Slovak regions and its importance for the efficient use of existing potential. A total allocation exceeding € 3.2 billion from the European Regional Development Fund and the Cohesion Fund has been approved for the Transport OP. The Environment OP, for which € 1.8 billon has been allocated, is the second largest programme in terms of the amount of allocated EC funds. Within the Convergence Goal, the lowest allocation is for the Education OP, with € 0.25 billion in total for the entire programming period . Within the entire NSRF, the Bratislava Region OP has the lowest amount of EC funding in the 2007–2013 period totalling € 87 mil. The total volume of EC funds for realising projects in contracts granting non-returnable financial aid reached 18.54 %, i.e. € 2,106 billion, as of 30 September 2009 at the NSRF level. The highest volume of EC resources in contracts granting non-returnable financial aid was dedicated to realising Transport OP projects (more than € 555 mil.); this is the programme with the highest total allocation. The Employment and Social Inclusion OP is allocated more than € 364 mil. As to other OPs, the highest volume of funds in approved applications for non-returnable financial aid is dedicated to the Environment OP and the Competitiveness and Economic Growth OP. On the contrary, the lowest volume of approved and contracted funds is allocated to the Bratislava Region OP (more than € 3 mil.) and the Information Society OP (more than € 13 mil.). The highest share of contracted funds within the total allocation of EC funds belongs to programmes with the lowest allocations – the Technical Assistance OP (44.63 %) and the Education OP (41.66 %). The Employment and

34 Transport OP, Environment OP, Regional OP, Competitiveness and Economic Growth OP, Health Service OP, IT use throughout Society OP, and Technical Assistance OP 35 Bratislava Region OP 59a Research and Development OP, Employment and Social Inclusion OP, and Education OP

42

Social Inclusion OP (41.31 %) also is among programmes with a high share of approved EC funds. With regard to implementation strategy where project implementation is preceded by the preparation of feasibility studies, the share of approved EC funds in the Information Society OP is only 1.38 % of the total allocation for the programme. Even greater differences can be found at a level of approval of applications for non-returnable financial aid/projects at the level of individual priority axes and measures within individual OPs. Measures for which allocation is fully or partially dedicated to selected projects and on the other hand measures for which no applications for non-returnable financial aid have been approved are no exceptions. At the end of the third year of the programming period , or at the end of the second year of OP implementation the volume of expenditures declared by the European Commission's certification body reached almost € 31.39 mil. This amount represents only 0.28 % of total allocation for the Slovak Republic. With regard to the share of the volume of approved and contracted funds (18.54 %) the actual fund drawing level is low. This data is reflected in the fact that despite a relatively satisfying progress in contracted financial resources most of the projects are in the pre-implementation phase or at the beginning of the implementation phase. Another factor, which can have a negative impact on actual status of drawing resources, is a change the economic situation of applicants and beneficiaries from private sector due to the economic crisis. Due to the crisis most of them have had to change their development plans. Moreover, banking institutions re-evaluated their strategies for granting loans. The present situation also reflects the need for a certain time period between preparing and starting implementation within individual OPs. From among 11 NSRF OPs, only three programmes declared expenditures as of 30 September 2009: the Employment and Social Inclusion OP, the Transport OP and the Technical Assistance OP. In absolute numbers the highest level of expenditures was declared by the European Commission within the Employment and Social Inclusion OP – more than € 24 mil., the Technical Assistance OP – more than 5 mil. and the Transport OP – more than € 1 mil. From the perspective of the share of declared expenditures in the total allocation of OPs, the highest expenditures were declared within the Technical Assistance OP supporting effective and efficient implementation of aid from Structural Fund and the Cohesion Fund. On the other hand, the actual level of contracted EC allocations and plans for the announcement of further calls for submission of applications for non-returnable financial aid for 2009 and primarily 2010 create preconditions for positive development. Together with progress in the financial and physical implementation of contracted projects within OPs we expect, in a 12-month horizon, an obvious improvement in the share of the European Commission's declared expenditures in a total allocation for the 2007–2013 programming period . In this regard, the ability to develop and effectively implement major projects in the transport and environmental sector (using measures adopted by the European Commission) in addition to national projects will play an important role. Also despite the minimal level of actual drawing on EC funds for Cohesion Policy implementation in the Slovak Republic, the risk of failing to fulfil the 2007 commitment due to the application of the n+3 rule is not high. After deducting advance payments for OPs the level of contracted commitments for 2007 exceeded 90 %, and for all OPs, except the Bratislava Region OP and the Information Society OP, contracted commitments reached 100% of allocation for the given year. In terms of the actual drawing on commitments for

43

2007, progress at a level of more than 25 % is acceptable. As of December 2009, there are contracts of the granting of non-returnable financial aid within OPIS totalling € 212 mil.

B.5.2 Financial implementation according to priority topics The Slovak Republic NSRF and OPs cover 64 priority topics of the total number of 86 as defined in the appendix of the implementation regulation. On the one hand, priority topics and relevant allocations reflect the actual situation in a given field and simultaneously their importance within selected NSRF strategy and the objectives set. The highest allocations are for implementing priority topics connected with the NSRF strategic priority of Infrastructure and Regional Accessibility. Almost € 2.14 billion is allocated for building transport infrastructure of a transnational importance (TEN-T highways and TEN-T railroads) in the territory of Slovakia. Together with funds for Priority Topic 20 - Highways, not included in TEN - T, the volume of funds is higher than € 2.66 billion, which accounts for almost one fourth of the total allocation for the 2007 - 2013 programming period . In addition to priority topics connected to transportation, the highest allocations are dedicated to Priority Topic 46 - Water Processing (Waste Water), 13 - Services and Applications for Citizens, 75 - Educational Infrastructure and 11 - Information and Communication Technologies. For all these priority fields, EC fund allocation exceeds € 500 mil. On the contrary, the lowest allocations go to Priority Topics 12 - Information and Communication Technologies TEN - ICT (€ 3.24 mil.), 24 - Cycling Tracks (€ 5 mil.) and 28 - Intelligent Transport Systems (€ 9.5 mil.). As of 30 September 2009, the highest amount of funds was contracted within projects relevant for Priority Topic 75 - Educational Infrastructure. The pre-school, elementary and secondary school infrastructure is supported within the Regional OP. Improving university infrastructure is supported within the Research and Development OP. Investments into educational infrastructure represent an important contribution to improving the quality of education and to creating conditions for the more effective implementation of content reform within the education system in Slovakia. With regard to the overall unfavourable standard of the quality of educational infrastructure, the number of supported projects and the total volume of approved funds represent an important qualitative shift. For another Priority Topic 21 – TEN-T Highways, contracts for granting non-returnable financial aid were concluded in the amount of more than € 263 mil. TEN-T highways and other projects approved within Priority Topics connected with transport infrastructure seek to improve the density and quality of Slovakia’s transport infrastructure. The completion of the transport network should provide connections to international transport corridors, regional accessibility and their mutual inter-connection as one of the important prerequisites for economic development. The original, relatively low allocation from the European Social Fund for taking active and preventive labour market measures (€ 60.87 mil.), has been exceeded and now the volume of contracted funds within this relevant Priority Topic accounts for more than € 248 mil. Measures taken primarily through national projects were to alleviate the impacts of the crisis on employment and the labour market. The mainly concentrated on increasing staff adaptability and taking active labour market measures under the Employment Services Act

44

Another priority topic is Priority Topic 18 - Mobile Railroad Assets, where concluded contracts granting non-returnable financial aid account for € 176 mil. Despite the fact that NSRF implementation by the number and volume of approved projects/funds is still in the pre-implementation phase, more than € 107 mil. (more than 40 % of total allocation) was contracted for the Cohesion Policy preparation, execution, monitoring and controlling. Other priority topics where the amount of contracted EC resources exceed € 100 mil. are: 17 - TEN-T Railroads, 20 - Highways and 72 – Design, Implementation and Execution of Reforms in Education and Professional Training Systems. As to analysis of the actual use of funds allocated to individual priority topics it is obvious that the original indicative allocation has been exceeded in relation to three priority topics: 66 – Taking Active and Preventive Labour Market Measures (407.66 %), 18 - Mobile Railroad Assets (199.21 %), 57 - Other Aid for Improving Tourism Services. This is followed by four priority topics where drawing in the monitored period exceeded 50 % of allocation. These are: 81 - Mechanisms for Improving the Development of Politics and Programmes..., 75 - Educational Infrastructure, 8 - Investments into Companies, 72 - Design, Implementation and Execution of Reforms in Education and Professional Training Systems. On the other hand, we show 13 priority topics for which no funds have been used and a further 8 topics for which drawing of funds accounted for less than 1 % as of 30 September 2009. Total allocation for these priority topics is more than € 2.2 billion, around 20 % of total NSRF allocation. A review of allocations for implementing priority topics within the Convergence Goal and the Regional Competitiveness and Employment Goal is shown in Appendix No. 2 of the Report.

B. 6. Fulfilment of objectives under Article 3 of the Council Regulation (EC) No. 1083/2006 The use of European Regional Development Fund, European Social Fund, Cohesion Fund and European Investment Bank funds and other Community financial tools is to contribute to the fulfilment of priorities defined in the Community Strategic Guidelines:

1. To improve attractiveness of Member States, regions and towns by improving accessibility, providing adequate service quality and standards and preserving the environment,

2. To support innovation, businesses and the growth of a knowledge-based economy

through research and innovation capacities including new information and communication technologies, and

3. To create more and higher quality jobs by increasing the number of employees or

entrepreneurs, improving staff adaptability and increasing investments into human capital.

The orientation of interventions toward specific regional problems or adjusting interventions to various regional needs is a specific feature of strategic directives. Fulfilment of individual Community Strategic Guidelines priorities is being completed via the NSRF and 11 OPs (see Table No. 7 and Chart No. 9). Table No. 7: Progress in contracted funds (EU + State Budget) as of 30 September 2009

45

Operational programme

Con

trac

ted

proj

ects

(n

umbe

r)

Con

trac

ted

proj

ects

(b

udge

t)

% o

f co

ntra

cts

% o

f dr

awin

g

Education OP 238 150 364 207.08 20.69 0.40

Research and Development OP 140 270 443 214.54 19.01 0.28

Regional OP 288 228 971 124.44 13.47 1.81

Bratislava Region OP 18 4 312 945.60 4.21 0.60 Competitiveness and Economic Growth OP

223 187 299 048.27 20.62 0.17

Health Service OP 18 122 541 187.11 41.66 4.22

Environment OP 156 336 040 336.34 15.87 1.02

Employment and Social Inclusion OP 606 427 483 840.15 37.66 6.16

IT Use throughout Society OP 16 16 107 883.19 1.38 0.30

Transport OP 40 726 338 894.11 19.61 0.07

Technical Assistance OP 41 51 248 719.03 44.63 13.74

Total NSRF 1 787 2 521 151 399.86 18.82 1.24 Source: ITMS Chart No. 9

Percentuálne zazmluvnenie operačných programov NSRR k 30.9.2009

OP Vzdelávanie 20,69

OP Výskum a vývoj 19,01

Regionálny OP 13,47

OP Bratislavský kraj 4,21

OP Konkurencieschopnosť a hospodársky rast 20,62

OP Zdravotníctvo 41,66

OP Životné prostredie 15,87

OP Zamestnanosť a sociálna inklúzia 37,66

OP Informatizácia spoločnosti 1,38

OP Doprava 19,61

OP Technická pomoc 44,63

1

Percentuálne zazmluvnenie... –Percentage of contracted NSRF Operational Programmes as of 30 September 2009, OP Vzdelávanie – Education OP, OP Výskum a vývoj – Research and Development OP, Regionálny OP – Regional OP, OP Bratislavský kraj – Bratislava Region OP, OP konkurencieschopnosť.... – Competitiveness and Economic Growth OP, Education OP Zdravotníctvo – Health Service OP, Education OP Vzdel... – Environment OP, Education OP Zamestnanosť... – Employment and Social Inclusion OP, OP Informatizácia spoločnosti – IT Use Throughout Society OP, OP Doprava – Transport OP, OP Technická pomoc – Technical Assistance OP

As of 30 September 2009, 1,787 projects were contracted in the total amount of € 2,521,151,399.86 (EU + State Budget) accounting for 18.82 % of the total budget allocated for 2007–2013 , including national resources. The amount of drawn funds was € 165,537,137.77, which is 1.24 % of the budget. At this moment the rate of drawing such funds is low and there are significant differences in the drawing between individual OPs.

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Financial allocations for realising individual priorities express that a significant part is allocated to objectives connected with the development of infrastructure. Activities towards making regions more attractive for investments and work connected with the priorities of Community strategic directives account in total for 59.97 % of total funds in the 2007–2013 programming period . The NSRF primarily directs the decisive volume of funds for the elimination of underdeveloped infrastructure in the regions. The biggest volume of funds (28 %) is designed for realising priorities in the field of transport infrastructure, followed by the environment (15.8 %) and regional infrastructure (12.7 %). OPs show a lower rate of drawing. Within the Regional OP, 1.81 % of funds have been drawn. In total, there are 288 contracted projects, which in financial terms accounts for 13.47 % (€ 228,971,124.44). The overwhelming majority of funds are concentrated in Measure 1.1: Educational Infrastructure. Within the Environment OP the implementation rate is 1.02 %. 156 projects were contracted in the amount of € 336,040,336.34 (15.87 % of total). The largest number of projects was contracted within technical assistance (56.19 %) and the protection and re-generation of biodiversity and landscapes (47.30 %). The lowest implementation rate (0.07 %) belongs to the Transport OP; however the contracting rate is higher. In total, there are 40 contracted projects in the amount of € 726,338,894.11, which accounts for a 19.61 % contracting rate. The highest contracting rate was in the development of passenger railroad transport (142.29 %), highway construction (24.24 %) and express communications (21.18 %). So far, there are no data on the shift of the key indicators, or no progress has been recorded. With regard to the investment intensity of activities within the above priorities and over a longer period investment implementation one can expect to see results in future years. The strategic direction of measures can bring improvements in transport accessibility in large communities. Lower fund concentration rates for the improvement of intra-regional transport connections does not have to provide for better possibilities in rural regions as are created for large settlements. More ecological transport could be achieved by more frequent use of railroad transport. Parallel improvement of road transport and railway transport will increase competitiveness between individual types of transport and it is impossible to estimate the transport ratio. 26.61 % of total NSRF funds were allocated to the Community Strategic Guidelines priority in the field of improving knowledge and innovation. So far the funds' contribution to fulfilment of this priority is problematic, taking into account into how the funds are drawn. This is particularly true within the Information Society OP for which 8.74 % of funds are allocated and which is significantly lagging behind. There are, in total, 16 contracted projects totalling € 16,107,883.19 alone within technical assistance. Both the contracting rate (1.38 %) and the implementation rate (0.30 %) are low. The contracting rate within the Research and Development OP (19.01 %) and the Competitiveness and Economic Growth OP (20.62 %) is slightly higher than the NSRF average, but the implementation percentage is lower (0.28 and 0.17 respectively). 10.65 % of the NSRF funds are allocated to the Research and Development OP. Within this program, 143 projects were contracted totalling € 270,443,214.54. The highest contracting rate belongs to the university infrastructure priority (56.59 %) and support for the creation of an excellence network in research and development (21.77 %). A significantly lower contracting rate is for putting knowledge and technology transfer into practice. The Competitiveness and Economic Growth OP accounts for 6.80 % of the NSRF budget. The rate of contracted funds is 20.62 %; however the implementation rate (0.17 %) is significantly lower than NSRF average. There are 223 contracted projects, accounting for € 187,299,048.27. The highest volume of finances goes to tourism support (52.03 %), innovations and technological transfer (22.40 %) and to support joint services for

47

enterprises (28.53 %). No or only very small amounts have gone to the power industry. The goal of interventions in research and development is to increase the quantity of research activities and to contribute to higher competitiveness of the economy. This shift should be reflected in a higher volume of expenditure for research and development in terms of GDP and a higher number of patent applications. So far, public expenses have been the main resources for this and less expenditure has been dedicated by the private sector. It is not clear whether public expenditures will have a significant influence on the competitiveness of companies. So far, little attention has been paid to the transfer of knowledge and technologies into practice, which is a necessary precondition for improving the innovation performance of companies. Activities towards creating new knowledge and its transfer into practice should be more tightly inter-connected. Information society measures are directed to improving public administration electronic services at the national, regional and local level and improving the creation of digital content. The programme focuses on the improvement of accessibility of public services in underdeveloped and periphery regions. However, real progress in these regions can be problematic due to the lower rate of digital literacy in the population. Innovations are a result of complex processes. They are based on a mutual cooperation of firms with other institutions. The public sector should provide supporting services to SMEs. The goal is to increase the number of businesses and to achieve a higher standard of corporate innovativeness. The Competitiveness and Economic Growth OP assumes that these activities will be coordinated via the creation of regional innovation centres. It is questionable whether the institutional coverage of regional innovation support through the creation of new centres is an effective solution. Usually it is recommended to expand such activities within existing capacities. Progress in the Community Strategic Guidelines priority in terms of more and higher quality jobs is implemented primarily through NSRF Strategic Priority 3: Human Resources, as implemented by the Education OP, the Employment and Social Inclusion OP and the Health OP. 15.65 % of NSRF funds are allocated to this priority. Drawing on funds within the Employment and Social Inclusion OP, to which 7.76 % of NSRF funds were allocated, is significantly higher than the NSRF average. The implementation rate is 6.16 %, which is a highly above-average value. Overall, 606 projects have been contracted totalling € 427,483,840.15, accounting for 44.63 % of the contracting rate. The high implementation rate is mainly in the technical assistance priority axis, in Measure 1.1: Support for Programmes in the Field of Employment Support and Resolving Unemployment and Long-Term Unemployment and in Measure 3.1: Support for the Employment Growth and Employment Improvement with Special Focus on a Knowledge-based economy. However, the contracting rate is higher in almost all measures, except for Support for the Creation of Equal Opportunities within the Labour Market Access, Support for the Integration of Disadvantaged Groups into the Labour Market with Special Focus on Marginalized Roma Communities, the Introduction of Quality Management Systems in Public Administration and for NGO in the Field of Employment and Social Policy. A higher rate of drawing funds can also be found in the Health OP (4.22 %), to which 2.20 % of funds were allocated. 18 projects have been contracted in a total amount of € 122 mil., which accounts for a 41.66 % share of contracted funds. Within the Education OP, to which 5.44 % of funds are allocated, the contracting rate is slightly higher (20.69 %) than average, however the implementation rate is significantly lower (0.40 %). There are 238 contracted projects totalling € 150,364,207.08. The highest contracting rate is in the Measure to Modernise traditional schools in the Bratislava region (71.82 %) and in the Convergence Goal (38.20 %). These measures should improve teaching content and methods, leading to higher quality education and professional training.

48

The European Territorial Cooperation Objective The Slovak Republic participates in implementing EU financial aid instruments that contributes to fulfilment of EU Territorial Cooperation Cohesion Policy. This goal is connected to experiences acquired from regional cooperation within Inter-regional Community initiatives and the Cross-Border Cooperation (CBC) programmes implemented in the Slovak Republic within a reduced programming period from 2004 - 2006. It focuses on strengthening cross-border cooperation through joint local and regional initiatives, strengthening transnational cooperation through actions contributing to integrated territorial developments fulfilling Community's priorities and strengthening inter-regional cooperation and exchange of experiences at a relevant territorial level. These programmes are to contribute to sustainable territorial development, to support investment and development activities, to encourage innovation and entrepreneurship, to support a knowledge-based economy and an information society, to support the creation of new products and services as well as to develop new markets and human resources based on the principles of permanent sustainability. The expected results lie in the increased attractiveness of regions and towns, respect for sustainable development and for the quality of the environment. The goal of EU Territorial Cooperation is not a part of the NSRF. This goal is implemented through the following forms of cooperation: The Slovak Republic participates in implementing EU financial aid instruments that contribute to fulfilment of EU Territorial Cooperation Cohesion Policy goal through the following forms of cooperation: 6.1.1. Cross-border cooperation 6.1.2. Transnational cooperation 6.1.3. Inter-regional cooperation

6.1.1 Cross-border cooperation carried out through the following programmes: - The 2007–2013 Slovak Republic – Czech Republic Cross-Border Cooperation

Programme - The 2007–2013 Slovak Republic – Austria Cross-Border Cooperation Programme - The 2007–2013 Hungary – Slovak Republic Cross-Border Cooperation Programme - The 2007–2013 Poland – Slovak Republic Cross-Border Cooperation Programme - The Hungary – Slovakia – Romania - Ukraine Cross-Border Cooperation Programme The Slovak Republic participates in implementing 5 cross-border programmes within the European Territorial Cooperation Goal, while the Ministry of Construction and Regional Development performs the tasks of the Managing Authority for the Slovak Republic – Czech Republic Programme. In other programmes the Slovak Republic plays the role of a national body through the Ministry of Construction and Regional Development. No projects have been approved so far for the Hungary – Slovakia – Romania - Ukraine Cross-Border Cooperation Programme, which is co-financed by the ENPI. A call for the submission of projects was announced on 16 June 2009 with a deadline for the submission of applications for financial contributions set on 22 September 2009. Up to this deadline the Joint Technical Secretariat of the programme received 148 applications for funds. In the near future, the legitimacy of received applications will be inspected. An SMV meeting, at which the first applications for

49

funds will be approved, will take place next spring. Within the other four cross-border programmes, 309 projects were approved in the monitoring period and Slovakia is a leading project partner in 106 projects. The total volume of the projects approved is € 183,902,516 EUR, which accounts for 40 % of the total European Regional Development Fund allocation.

6.1.2 Transnational cooperation carried out through the following programmes: - South-East Europe OP - Central Europe OP The Slovak Republic participates in implementing these programmes through the Ministry of the Environment, which performs tasks of a National Body. The objectives of the programmes are reached through the implementation of activities within 4 priority areas: innovation, environment, accessibility and sustainable community development. The total financial allocation of the South-East Europe OP is € 245,111,974. Within the South-East Europe OP, after the evaluation of the first call, 15 projects were approved with the participation of 23 Slovak project partners. In 2 cases the project partner comes from Slovakia: the AUTOCLUSTERS project (West Slovakia Automobile Cluster) and the DONAUREGIONEN+ project (the Ministry of the Construction and Regional Development). The total volume of approved European Regional Development Fund funds for Slovak project partner activities accounts for € 5,170,972.07. The total financial allocation of the Central Europe OP is € 298,295,837. Within the Central Europe OP there are 15 approved projects with the participation of 23 Slovak project partners. Off the above number, there is one Slovak leading project partner. The total volume of approved European Regional Development Fund funds and national resources for Slovak project partner activities accounts for € 4,901,465.88.

6.1.3 Inter-regional cooperation carried out through OP INTERREG IV C Inter-regional cooperation is implemented in the Slovak Republic through the OP INTERREG IV C. The total financial allocation for implementing this programme is € 405,094,936. The Slovak Republic participates in the implementation of this programme via the Ministry of the Economics, which performs tasks of a National Body. The overall goal of the INTERREG IVC programme is to increase the efficiency of the regional development policies in two priority areas – “Innovations and a Knowledge-based Economy” and “The Environment and Risk Prevention”. Within the OP INTERREG IVC, there are 10 approved projects with the participation of 11 Slovak project partners. However, one Slovak project partner has withdrawn from a project before the start of its implementation due to insufficient financial coverage by the national co-financing. Projects submitted by lead Slovak partners have not been approved. Foreign lead project partners are responsible for project implementation and responsibility of the Slovak project partners lies in the coordination of individual operational aspects of the project or in cooperation with project partners. The total budget of Slovak project partners who participate in INTERREG IVC projects accounts for € 1,266,894.39 EUR, of which the European Regional Development Fund contribution is € 1,076,860.22.

50

Table No. 8 includes the overview of the drawing on funds by all OPs within the EU Territorial Cooperation Goal: Table No. 8: Overview of the drawing on funds of all OPs within the EU Territorial Cooperation Goal in EUR

OP

Financial allocation for

the 2007 - 2013 programming

period *

The number of approved applications

for funds

The number of approved applicatio

ns for funds “SK

LP”**

The volume of approved applications

for funds

The volume of approved applications

for funds “SK LP”

% of the drawing

on financial allocatio

n

1.

2007–2013 SK-CR Cross-Border Cooperation Programme

109106049.00 124 45 45643975.0

0 19892736.0

0 41.83

2.

2007–2013 SK-AT Cross-Border Cooperation Programme

73438143.00 32 8 27892131.0

0 4763456.00 37.98

3.

2007–2013 HU-SK Cross-Border Cooperation Programme

207642916.00 104 35 45011191.0

0 19760975.0

0 21.68

4.

2007–2013 PL-SK Cross-Border Cooperation Programme

185185603.00 49 18 65355219.0

0 30433614.0

0 35.29

5.

2007–2013 ENPI HU – SK – RU – U Cross-Border Cooperation Programme

74 815 728.48 0 0 0 0.00 0.00

6. South-East Europe

245111974.00 15 2 5170972.07 429250.00 2.11

7. Central Europe

298295837.00 15 0 4901465.88 0.00 1.64

8. Interreg IV 405094936.00 10 0 1266894.39 0.00 0.31

51

C

Total: 1 523

875 458.00 349 108

195241848.34

75280031.00

12.81

* allocation includes public resources ** leading partner is from the Slovak Republic

B.7. European Social Fund contributions to the fulfilment of guidelines and recommendations within the European Employment Strategy The fulfilment of the European Employment Strategy objectives are supported by two OPs co-financed from the European Social Fund in the current programming period : the Employment and Social Inclusion OP and the Education OP. Both OPs contribute to fulfilment of both the Convergence Goal and the Regional Competitiveness and Employment Goal. Based on the data for financial progress in the OP implementation one can say that as of 30 September 2009 funds have been drawn on a very small scale. Also, programme implementation progress has not been obvious, which directly influences their real contributions to fulfilling the Lisbon Agenda in terms of employment. For the 2008 – 2010 period the following employment guidelines and relevant objectives were defined (Integrated Guidelines for Growth and Employment): Guideline No. 17 – Implement employment policy in order to achieve full employment,

higher labour quality and productivity while strengthening territorial and social cohesion; attract and retain more people in employment, increase labour supplies and modernise the social protection system, increase staff and enterprise adaptability , increase investment into human capital through better education and skills development.

Guideline No. 18 – Promote a lifecycle approach to work, try to build employment

opportunities for young people thereby decreasing their unemployment rates, substantially increase women's participation and decrease gender differences within employment, unemployment and wages, improve a work-life balance and provide affordable facilities for childcare and other dependent persons, support active aging, including suitable working conditions, improve occupational health, modernise social protection systems including old-age pensions and health care; the Employment and Social Inclusion OP also contributes to fulfilling the objectives of guideline 18 via Priority Axes 1 and 2.

Guideline No. 19 – Provide inclusive labour markets, make work more attractive, provide job

applicants with wages including the disadvantaged, take active and preventive labour market measures including the early identification of needs, job search assistance, management and training, provide social services and contribute to the elimination of poverty, make continual re-evaluations of incentives and obstacles that arise from the tax and benefits system while providing an adequate level of social protection, develop new labour resources in the service sector for individuals and enterprises, in particular at a local level.

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Guideline No. 20 – Improve satisfaction of labour market needs, modernise and strengthen labour market institutions, such as employment services and secure higher transparency of employment and training opportunities at the national and European level, eliminate obstacles to the mobility of working people across Europe, better predict the needs for skills, labour market shortcomings and bottlenecks, devise suitable management for economic migration.

Guideline No. 21 – Promote flexibility combined with stable work and decrease labour

market segmentation while taking into account the status of social partners, modify employment legislation, re-assess various contractual arrangements and work time arrangements, resolve the issue of unrecognized work, better predict and more positively manage changes, promote and expand innovative and adaptable forms of work organization, support for transition from the employee statute including training, self-employment, business establishment and geographic mobility.

Guideline No. 22 – Provide for the favourable development of labour costs and wage

mechanisms for employees, support social partnerships in order to define the right frameworks for wage negotiations at all relevant levels and simultaneously to eliminate wage differences.

The Employment and Social Inclusion OP also contributes fulfilment of the objectives of Guideline No. 22 via Priority Axis 4 in a form of the Employee Representative Education System in the Slovak Republic project.

Guideline No. 23 – Expand and improve investments into human resources as well as

education and training strategy, which allow for an access to introductory professional, secondary and higher education, including vocational schools and business training, substantially decrease the number of students who prematurely leave schools, open effective life-long learning strategies for all in schools, enterprises, public administration and households.

Guideline No. 24 – Adopt education and training systems that can react to new requirements,

increase and provide more attractive and open and higher quality standards of education and training, expand their range, increase student and lecturer mobility, ease and diversify access to education, training and knowledge for all by organizing work time, family support services and new forms of cost bearing, react to new employment needs, key competencies and future skills requirements by better defining and making informal education qualifications and legalisation more transparent.

The Slovak Republic should reach average employment of 70 % by 2010. 2008 data, according to Eurostat, show the EU 15 average at 67.3 %, while Slovakia's average is 62.3 %. Women’s employment, which is to reach 60% by 2010, was reached in the EU 15 states in 2008 (60.4%), while in Slovakia it was 54.6 %. Slovakia lags behind the most in employment of older people. It should reach 50% by 2010. The EU 15 average in 2008 was 47.4 % and the average in Slovakia was only 39.2 %. Positive trends from the past have recently been deformed due to negative influences of the global economic crisis. According to VZPS, unemployment is rising; according to the latest Eurostat data, it reached 11.7 % in September 2009 compared to the EU 15 average of 9.2 %, and employment is decreasing (by 2.1 %). Long-term unemployment seems to be one of the few positive developments. It dropped on a

53

year-on basis by 13.2 % and in the 2nd half of 2009 it reached 52.8 %. Despite this fact, it still is a significant problem on the Slovak labour market. The European Social Fund contributed the fulfilment of Guideline No. 17 through the Employment and Social Inclusion OP, in particular the part focused on increasing job offers and the adaptability of working people and enterprises by means of Axis 1: Support for the Growth of Employment, which focuses on preventing job loss, creating new jobs and placing the unemployed. This Priority Axis has contributed to Guidelines No. 19 – the part emphasizing active labour market policy and also No. 20 – the part focusing on labour mobility. Guideline No. 21 focusing on innovative forms of work organization has been supported in the same way. Integrated Guidelines No. 23 and No. 24 for education are implemented through investments into human capital. 260 projects have been approved for various entities coming from eligible territory within Measure 1.2: Support for the Creation and Retention of Jobs Trough Higher Staff and Enterprise Adaptability and Business Support. These projects focus on educating staff in various areas and increasing organizational capacities. In the field of inclusion of the long-term unemployed into society via higher employment, improvement of their new professional skills and practical experience necessary for the labour market, a new measure has been introduced within active labour market policy: so-called social enterprises. The measure was implemented in the monitored period through 8 pilot projects. Also, 7 projects have been implemented within Measure 1.1: Support for Programmes in the Field of Employment Support and the Resolution of Unemployment and Long-Term Unemployment with emphasize on disadvantaged applicants and the activation of job seekers. The labour market placement rate reached 41.75 %, which is substantially higher than the target value of 27.4 %, and seems to be positive. Guidelines similar to Priority Axis 1 guidelines were performed within Priority Axis 3, focusing on 3 districts in the Bratislava Region in order to support employment, social inclusion and the building of capacities, primarily within Measure 3.1: Support for Employment Growth and Higher Employment with special focus on a knowledge-based economy and on support for enterprise adaptability, where 22 projects have been approved. The beneficiaries were private firms carrying out educational activities for their own employees. Guideline No. 19, mainly the part focused on inclusive labour markets – active and preventive labour market measures, providing social services and contributing to the elimination of poverty, was implemented through Priority Axis 2: Support for Social Inclusion focused on better social inclusion through job creation, better retention of existing jobs and better accessibility of care services for persons threatened by social exclusion. 230 projects have been supported within Measure 2.1: Support for Social Inclusion of Persons Threatened by Social Exclusion or the Socially Excluded Trough the Development of the Care Services with Special Focus on Marginalized Roma Communities. The projects focus on support for the field social workers and their assistants working mainly in marginalized Roma communities. Additional projects within Measure 2.1 focused on the avoidance of social exclusion by providing social services, social protection measures and social guardianship as well as other innovative forms of care services. Further, they focused on preventing and eliminating violence as a barrier to entering and remaining on the labour market. The main goal of the national project is to develop professional families, including preparation for professional substitute care.

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Also relevant are Measures 2.2: Support for the Creation of Equal Opportunities for Labour Market Entry and Support for the Integration of Disadvantaged Groups into the Labour Market with Special Focus on Marginalized Roma Communities and 2.3: Support for the Work-Family Balance. One project has been approved for each measure. Within Priority Axis 3: Support for Employment, Social Inclusion and Building Capacities in the Bratislava Region, Guideline No. 19 was implemented, in particular Measure 3.2: Support for Social Inclusion, Gender Equality and a Work-Family Balance in the Bratislava Region in order to support activities focused on resolving labour market problems through better accessibility to and higher quality of care services and through higher public awareness in relation to marginalized communities and other disadvantaged groups of the population. 2 projects were implemented in this measure, including one for professional families. Guideline No. 20, mainly dealing with strengthening labour market institutions, is carried out by Priority Axis 4: Building Capacities and Improving the Quality of Public Administration with Focus on Gradually Improving the Quality of Provided Public Services and on Gradual Improvement Based on Organizational Process Management. This priority axis supports organizations that provide public services or services of a public (non-profit) nature. Within Measure 4.1: Improving the Quality of Services Provided by Public Administration and Non-Profit Organizations, 56 projects were supported. 6 projects were also implemented for Measure 3.3: Building Capacities and Improving the Quality of Public Administration in the Bratislava Autonomous Region, which also helps to implement Guideline No. 20. The European Employment Strategy goal in the field of investments into human capital was implemented by the European Social Fund in the Slovak Republic via the Education OP. As to the field of education, this Strategy requires educational system adaptability to labour market requirements and better access to education, including life-long learning. The Education OP is also in compliance with relevant EU documents, such as the Bologna Declaration, and with national strategic documents. The Guideline No. 23 dealing with education and life-long learning reform as well as the need to decrease the number of students who prematurely leave schools was implemented via Priority Axis 1: Educational and Professional Training System Reform, Measure 1.1: Modernisation of Traditional Schools in which 305 projects were supported. These projects were focused on teaching staff and students at secondary and elementary schools. These projects were especially focused on the preparation of new teaching material and didactic tools. 27 similar projects were implemented through Priority Axis 4: Modern Education for a Knowledge-based Economy for the Bratislava Region, Measure 4.1 Modernisation of Traditional Schools for the Bratislava Country focused on educational content transformation at elementary and secondary schools toward the development of key competencies and the use of innovative forms and methods of teaching. In addition, national projects within Measure 1.1 were submitted as follows:

1. Elementary school teacher foreign language education in connection with the Concept of Teaching Foreign Languages at elementary and secondary schools;

2. Modernization of educational process at elementary and secondary schools – focused on teacher information and communication technology education;

3. Teacher education in connection with preparation of school educational programmes – focused on training replicators for elementary and secondary

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school teacher education to implement educational content reform and to prepare school educational programmes;

4. The creation of new educational programmes within professional training for the needs of the automotive industry II;

5. Kindergarten teacher education as a part of educational reform. Mirror national projects were submitted within Measure 4.1. The “Creation of New Educational Programmes within Professional Training for the Needs of the Automotive Industry II” national project, which specifically reacts to the needs to adapt education at secondary schools to the needs of a strong automotive industry in the Slovak Republic, can be highly rated. Guideline No. 24 deals with educational process adaptability to new employer new requirements. The Further Education of Elementary and Secondary Teachers in Informatics national programme is being implemented within Measure 4.2: Higher Competitiveness of the Bratislava Region through the Development of University and Other Education,. The above measure also contributes to fulfilment of No. 24 in terms of improving educational standards. The Further Education of Elementary and Secondary Teachers in Informatics national programme is being implemented within Measure 2.1. 13 projects with a target group consisting of health workers have been implemented within Measure 2.2. As of 30 September 2009 no projects have been approved within Measure 1.2: Universities, Research and Development as the Driving Force of the Development of a Knowledge-Based Society. All three measures are in compliance with Guideline No. 23. Measure 1.2 also has the potential to positively influence Guideline No. 24 in terms of the quality of university education The following are activities both implemented and under preparation that are financed from the Employment and Social Inclusion OP according to the European Employment Strategy priorities. Priority 1: Attracting and Retaining More Employed People, Increasing the Labour Force Offer and Modernisation of Social Protection Systems was implemented mainly through national projects. The most important are: - Employment support for jobseekers (€ 83.75 mil.). - Employment support for citizens with disabilities (€ 32.12 mil.). - Activation of jobseekers (€ 69.71 mil.). - Improving and increasing employment services accessibility (€ 10.80 mil.). - Support for citizens threatened by mass layoffs due to the global financial crisis (€ 3.32

mil.). - Childcare service contribution (€ 45.17 mil.). The vast majority of national projects are of a long-term nature, i.e. they will be implemented during nearly the entire programming period . The goal of Priority 2: Increasing Employee and Enterprise Adaptability has been largely met by contributions from demand-oriented projects of the Employment and Social Inclusion OP. 254 projects have been approved within Measure 1.2. These were focused on support for creating human resources development strategies in enterprises and improving employee skills and adaptability through education. The volume of approved projects within Measure

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1.2 reached almost € 50 mil. Another call for the above measure was announced in December with allocation of € 30 mil. Demand-oriented projects focused on improving the quality of services provided to non-profit organizations have been implemented so far within Priority 3: Increasing Investments into Human Capital through Better Education and Skills. Approved projects reached more than € 30 mil. Public administration is another target group. Here, support will focus on improving capacities for the creating, implementing, monitoring and assessing policies and programmes

B.8. European Social Fund contribution to the performance of tasks and the fulfilment of objectives related to social protection, social inclusion, education and professional training The Slovak Republic has focused on priority topics such as the elimination of poverty with the emphasis on children, equal opportunities, gender equality, sustainable development, or transparent management of relevant institutions in terms of social protection and inclusion. Although the 2007 poverty rate in Slovakia reached 11 %, which is below the EU average (17 % for the EU 27), this indicator is threatened mainly by the present economic crisis and also by other factors, such as large regional differences that deteriorate from west to east: from 128 % in the Bratislava Region to 90 % in the Prešov Autonomous Region in terms of the average nominal wage in 2007. The problem lies in an aging population and lower natural growth (by 5.8 % in 2007 compared to 2006), although life expectancy at birth (men – 70.51 years and women – 78.08 years in 2007) is among the lowest in the EU Member States. The 2008 – 2010 National Report on Social Protection and Social Inclusion Strategies set 3 priority objectives: Priority Goal 1: Reduce Child Poverty and to Resolve Intergenerational Poverty

Replication by Taking Preventive Measures and Supporting Families with Children

Specific intentions: In the field of education, as one of the key instruments in the fight against intergenerational poverty replication, it is necessary to provide equal opportunities to educational access and the chance to get a quality education regardless of the socio-economic environment from which the child comes from. In the field of life-long learning necessary to avoid social exclusion and to strengthen social inclusion, it is necessary to create specific conditions for the recognition of results of informal and non-teaching education in order to acquire partial or full qualification, which will become a motivational factor to increase the individuals’ participation in the life-long learning Priority Goal 2: Increase Inclusion and Fight Against Discrimination of Vulnerable

Groups in the Population by Supporting Public Services Accessibility, Developing Local Solutions and Increasing the Participation of Excluded Groups in Society

The goal into the future is to support the flexibility of services and measures focused on:

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- Avoiding and resolving poverty and exclusion through better social services accessibility, improving the quality and efficiency of social protection and social guardianship measures, measures focused on remaining in natural social environment, social services modernization and development and other measures;

- Continuing support for health care access for all groups threatened by poverty and exclusion and in marginalized locations in order to strengthen social cohesion.

Priority Goal 3: Improving Labour Market Access and Increasing Employment and

Employment of Population Groups Threatened by Exclusion Increasing employment is the most effective means of economic growth within the development of an inclusive society. The EU considers quality jobs to be the best weapon against poverty and social exclusion. In addition to standard measures active labour market policies, the Slovak Republic needs necessary and special help according to its specific needs and subsequent support for the access to the use of standard employment services. In the 2007–2013 programming period , the Slovak Republic is to continue and better support targeting of European Social Fund funds for demand-oriented projects focused on trial verification and implementation of active labour market policy tools multiple-disadvantaged and marginalized groups of the population and to implement and expand national projects within the programmes that have proved to be effective. Until the present the key task has been to support equal opportunities for labour market access and to support the integration of disadvantaged groups of the population threatened by exclusion into the labour market with a special emphasis on marginalized Roma communities. In the present programming period , social inclusion policy is being implemented within the Employment and Social Inclusion OP, mainly through the goal of Priority Axis 2: Support for Social Inclusion and the Growth of Social Inclusion through the Creation of Jobs, Higher Retention of Existing Jobs and Better Care Services Accessibility for Persons Threatened by Social Exclusion or Excluded Persons within Priority Axis 2, which complies with the National Report on Social Protection Strategies and Social Inclusion and its three main objectives. Implementation of the Employment and Social Inclusion OP within Priority Axis 2 through Measure 2.1: Support for Social Inclusion of Persons Threatened by Social Exclusion or Socially Excluded Through Care Services Development with Special Focus on Marginalized Roma Communities has contributed to the fulfilment of Priority Goal 2 by supporting field social workers and their assistants working mainly in marginalized Roma communities and by avoiding social exclusion when providing social services, social-legal protection measures and social guardianship and other innovative forms of care services. Goal 3 is reflected in activities focused on the elimination of barriers to entry and remaining on the labour market. Priority Goal 1 was also supported, e.g. via the national project focused on developing professional families, including preparation for professional substitute care. This was also supported by projects within Measure 2.2: Support for the Creation of Equal Opportunities for Labour Market Access and Support of the Labour Market Integration of Disadvantaged Groups with Special Focus on Marginalized Roma Communities and in particular Measure 2.3: Support for Life-Work Balance. Measure 3.2 was implemented within Priority Axis 3, which itself focuses on 3 districts of the Bratislava Region in order to support employment, social inclusion and building capacities, to

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support activities focused on resolving labour market problems by improving the accessibility and quality of care services and by improving public awareness in relation to marginalized communities and other disadvantaged groups, via which Objectives 1 and 3 of the 2008 – 2010 National Report on Social Protection and Social Inclusion Strategies are being met. Fulfilment of Priority Axis 2 objectives contributed to fulfilment of Goal 2 of the same national report, e.g. via the ZaSI-FSR-2008/3.2/03 call. Support for professional families is relevant for Goal 1. Priority Goal 1 and the concept of social enterprises have been implemented through pilot projects within Measure 1.2., which, so far, have appeared to be financially demanding, mainly due to the high unit costs per job created. Priority Axis 4 also seems to be relevant within the objectives of social inclusion policy in terms of transparency and effective institutional management despite not being explicitly stated in priority objectives. This axis is focused on gradually improving the quality of provided public services rendered and their gradual improvement based on organisational process management. Companies that provide public services or services of a public (non-profit) nature are supported within this priority axis. Measure 3.3 is relevant for the same reason, as its goal is to build capacities and to improve the quality of public administration in the Bratislava Region. The Ministry of the Education, as the Managing Authority for the Education OP from 1 January 2007 until 30 September 2009 implemented national and demand-oriented projects co-financed from the European Social Fund. The Education OP through its individual educational policies contributes to the reduction and elimination of regional disparities, representing one of the Cohesion Policy objectives and simultaneously supports improved labour force adaptability via higher quality and access to life-long learning. Concrete measures focus on strengthening human capital, especially via support for education in individual segments of the educational system: regional schools, universities and other education. Support is provided in the form of created and implemented reforms within educational and professional training systems with regard to a greater responsiveness to the needs of a knowledge-based society and life-long learning, better training staff capabilities in relation to innovation and a knowledge-based economy and the creation of networks between university institutions, research and technology centres and enterprises. Educational support for persons with special educational needs makes social inclusion and sustainable integration of disadvantaged groups, in particular marginalized Roma communities, into the labour market easier. The Education OP was approved by the European Commission on 7 November 2007 and management documentation preparation was going on until the end of 2007. Education OP implementation started in 2008. The Managing Authority announced the direct specification of so-called national projects and calls for the submission of applications for non-returnable financial aid in order to implement demand-oriented projects. The calls were announced by the Ministry of Education Agency for EU Structural Funds and the Ministry of Health as the Intermediary Body under the Managing Authority. In 2008, the Managing Authority of the Education OP announced seven direct specifications and as of 30 September 2009 a further 5 direct specifications were announced for 2009. Organizations directly managed by the Ministry of the Education were eligible applicants. With regard to the fact that national projects cover the whole territory of the Slovak Republic, applicants prepared mirror projects for both objectives – the Convergence Goal and the

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Regional Competitiveness and Employment Goal. Most direct specifications focused on Priority Axis 1 (Reform of the Educational and Professional Training System) and Priority Axis 4 (Modern Education for A Knowledge-Based Society in the Bratislava Region) of the Education OP. These were to support educational reform at elementary and secondary schools. Only two direct specifications were focused on further education (Priority Axis 2 of the Education OP). Direct specification orientation was connected with the start of school reform, which was launched on 1 September 2008. Target groups of national projects consisted of elementary and secondary school teachers, elementary and secondary school students, employees working in the field of education, kindergarten and university teachers. The Ministry of Education Agency for EU Structural Funds (hereinafter the “EU SF Agency”) focused its calls in 2008 on Priority Axes 1 and 4. These calls focused on the creation and implementation of school educational programmes for elementary and secondary schools and their goal was to support the implementation of educational system reform at elementary and secondary schools throughout the Slovak Republic. Target groups within announced calls consisted of elementary school students and teachers or secondary school students and teachers. The EU SF Agency’s calls in 2009 covered all Priority Axes, which means that anticipated implementation also consisted of projects supporting increasing the educational level of the members of marginalized Roma communities and persons with special educational needs (Priority Axis 3 of the Education OP) in order to support their social inclusion via easier access to formal education and the acquisition of necessary labour market skills. Further education (Priority Axis 2 of the Education OP) in selected sectors (construction, textile, electrical, engineering and chemical) was also supported. In 2008, 8 calls were announced and in 2009 6 calls were announced. 354 applications for non-returnable financial aid were submitted and after these applications were assessed, contracts to grant non-returnable financial aid to implement 316 projects were made. The Ministry of Health, as the Intermediary Body under the Managing Authority, only implements Measure 2.2 focused on medical staff education as announced in three calls in 2008. In 2008, 5 projects were implemented with a duration of 3 months, which seems to be specificity as to the duration of project activities. These were projects from the Ministry of Health’s call – Health System Supplementation with Qualified Experts, call code: OPV 2008/2.2/01. Within these projects medical staff participated in specialized study in scarce specializations, while they subsequently committed themselves to perform their medical profession at their present employer or at an employer in the territory of the Convergence Goal for at least 1 year from the end of financial aid for the study. This significantly helped to supplement and stabilize human resources within the healthcare system in the territory of the relevant autonomous regions according to its specific needs. In 2009, the Ministry of Health, as the Intermediary Body under the Managing Authority, announced another 2 calls; contracts to grant non-returnable financial aid for the implementation of 8 projects were concluded in 2009 based on the 8 received application. Thus, within 5 announced calls for the submission of applications for non-returnable financial aid, contracts for non-returnable financial aid for the implementation of 13 projects were made. All Ministry of Health calls generally focused on further education for medical staff. Generally it can be concluded that projects implemented within calls announced for Priority Axes 1 and 4 of the Education OP are focused on educational content transformation at elementary and secondary schools toward developing key competencies, using innovative teaching forms and methods, which is also connected to teacher professional training and

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further education who are largely involved in modernising traditional schools. Approved projects contribute to the execution of educational reform by creating and implementing school educational programmes with emphasis on supporting higher quality education based on innovations and profiles of schools in connection with education system reform under Act No. 245/2008 Coll. on Education and Training as amended. This education system improvement will enable pupils and students to acquire key skills that will influence their competitiveness on the labour market. It is via this that the Education OP simultaneously contributes to the development of a knowledge-based society as a part of the Lisbon Strategy. Managing Authority and intermediary body contracts within the Education OP, excluding the technical assistance projects, account for € 138,316,386.56, as of 30 September 2009, of European Social Fund resources. As of 30 September 2009, the European Social Fund's contribution for performing the tasks and fulfilling the objectives of education and professional training within contracted national projects implemented by the Ministry of the Education account for € 88,616,574.03. As of 30 September 2009, the European Social Fund's contribution for performing the tasks and fulfilling the objectives of education and professional training within the EU SF Agency's contracted demand-oriented projects account for € 39,781,359.23. As of 30 September 2009, the European Social Fund's contribution for performing the tasks and fulfilling the objectives of education and professional training within Ministry of Health’s contracted demand-oriented projects account for € 9,918,453.30. The Education OP is a multiple-goal OP because the issue of education cannot be geographically divided into the Convergence Goal and the Regional Competitiveness and Employment Goal and because educational problems and calls are the same for both objectives. Life-long learning in the Slovak Republic is also implemented through the following national projects within Priority Axes 1, 2 and 4 of the Education OP; each of the projects includes further education of teachers, which will support participation in life-long learning. The table also includes the national MPC project “Teacher Professional and Career Growth”, the goal of which is to create and develop a system of further education for teachers and professional staff in schools and school facilities. A contract for non-returnable financial aid was signed as late as 15 October 2009. The national Academia Istropolitana project “National System of Qualifications in the Context of Further Education Supported by a Guidance System” is also being prepared. Its goal will be to develop the educational system through higher quality life-long learning and life-long guidance and to develop a national system of qualifications. The national project will contribute to increasing adult participation in life-long learning and guidance. (A direct specification is announced at present. Deadline for the submission of application for non-returnable financial aid is 15 January 2010). Table No. 9 Overview of national projects implemented within the Education OP

The Education Operational Program

National project name Allocatio

n Brief description of national

project Current status

Foreign language education of elementary school teachers in connection with the foreign language instruction concept at elementary schools (EC) and secondary schools (SS) (Slovak Pedagogical Institute)

EUR 16.4 mil.

Supplementation of education system with qualified foreign language teachers at the 1st level of elementary schools.

Contract concluded as of 16/09/2008; national project implementation

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Further education of elementary and secondary school teachers in informatics (Slovak Pedagogical Institute)

€ 8.1 mil.

Supplementation of educational system with qualified teachers in the subject of informatics at basic and secondary schools.

Contract concluded as of 1/10/2008; national project implementation

Modernization of educational process at elementary schools (School Information and Forecasting Institute)

EUR 33.1 mil.

The creation of a modern teaching environment at basic schools including the use of the ICT tools.

Contract concluded as of 1/12/2008; national project implementation

Modernization of educational process at secondary schools (School Information and Forecasting Institute)

EUR

13.2 mil.

The creation of a modern teaching environment at secondary schools including the use of the ICT tools.

Contract concluded as of 2/12/2008; national project implementation

Education of teachers in connection with the development of the school educational programmes (State Institute for Professional Education)

EUR

5.5 mil.

Education of basic and secondary school teachers for the development of school educational programmes; publishing Teacher Newspapers

Contract concluded as of 2/01/2009; national project implementation

Development of new educational programmes within professional training for automotive industry needs II (State Institute for Professional Education)

EUR 8.3 mil.

Preparation of skilled graduates for the needs of the automotive industry.

Contract concluded as of 15/04/2009; national project implementation

Teaching staff education in kindergartens as a part of the school reform (MPC)

EUR 18.7 mil.

Implementation of the content form of the educational system through further education of kindergarten teaching staff.

Contract concluded as of 29/04/2009; national project implementation

External evaluation of the quality of school support for self-evaluation processes and school development (State School Inspectorate)

EUR 924.5

thousand

Development of quality evaluation tools for educational-training activities and school facilities

Contract concluded as of 3/08/2009; national project implementation

Teaching staff professional and career growth (MPC)

EUR 48.7 mil.

Preparation and development of the system of further education of teaching and professional staff at schools and school facilities

Contract concluded as of 15/10/2009; national project implementation

Specific outcome indicators will be available at the end of the implementation of national projects. Taking into account the status of expected values of some selected Education OP indicators (see Table No. 9), to which beneficiaries bound themselves in contracts for non-returnable financial aid made before 30 September 2009, it is possible to assume that with regard to the ongoing implementation of projects (especially the national ones) the upcoming period should see a significant achievement of target values for indicators specified in the Education OP, which will directly support adult participation in life-long learning. Table No. 10 Expected Education OP values

Selected Education OP indicators at the programme level

Expected value of the indicator in contracts as of 30 September2009

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The number of newly-developed educational programmes

862

The number of the teaching staff who completed further education programmes

30 336

The share of medical staff who completed further education programmes for medical staff Quantity 6987 ZP = 9.5 %

In addition to national projects, life-long learning is also supported through demand-oriented projects. In August 2009 the EU SF Agency announced a call for Measures 2.1/4.2, but the Selection Committee met as late as 9 December 2009, so relevant information as of 30 September 2009 is not available. The Ministry of Health as an Intermediary Body under the Managing Authority, which is only implementing Measure 2.2 (further education of the medical staff), announced 5 calls for submission of applications for non-returnable financial aid, which resulted in 13 projects focused on further education of the medical staff since the start of the programming period until 30 September 2009. As of 30 September 2009, the European Social Fund's contribution for performing the tasks and the fulfilling the objectives of education and professional training, within contracted demand-oriented Ministry of Health projects account for € 9,918,453.30. The Slovak Republic also supports education through public funds; the volume of these funds is increasing. This is also reflected in the following table, which includes public funds and excludes EU funds.

Table No. 11 Expenditure chapters of the Ministry of the Education for Source Code 111 – Chapter budgetary appropriations

Year Budget

approved in '000 SKK

Budget approved in EUR

Adjusted budget in '000 SKK

Adjusted budget in EUR

2007 50 245 704.00 1 667 851 822.34 49 432 529.00 1 640 859 357.36

2008 52 985 479.00 1 758 795 691.42 53 060 520.00 1 761 286 596.29 As of

30.9.2009 1 915 811 874.00 1 889 420 502.29

Information on adult participation in education:

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According to Labour Force Survey policy, adult participation in life-long learning in the Slovak Republic reaches 3.3 % of the population aged 25 – 64 (2008 data). The EU 27 average value is 9.6 %. The selected survey methodology, which insufficiently takes into account seasonal influences, is the main reason for the low value of this data in the Slovak Republic. This comment has been relayed at the EU level several times even on the part of the Member States; however it has not changed the European Commission's decision to monitor this indicator. On the other hand, Adult Education Survey statistics which measure adult participation in life-long learning in another way shows the Slovak Republic reaching 44 % in 2007. The EU 27 average value is 36 %. Adult participation in life-long learning should also increase after the application of the Life-long Learning Act as adopted in the National Council of the Slovak Republic in December 2009. Such results will mainly be seen after the development of a system for monitoring and forecasting educational needs, which will make it possible to better apply practical needs into the content of education, including further education programmes via which the adult population increases its qualifications. B.9. Benefits from implementing the National Programme of Reforms

within the Lisbon Strategy The 2008 – 2010 National Reform Programme of the Slovak Republic is directly related to publishing the Integrated Guidelines for the Growth of Employment for a three-year period. In compliance with the Integrated Guidelines, the National Reform Programme of the Slovak Republic concentrated on the following areas: Research, development and innovations Education Employment Business environment Climate change and energy The 2008 – 2010 National Reform Programme of the Slovak Republic was adopted by Slovak Republic Government Resolution No. 707 of 8 October 2008. Based on experience from preparing and implementing previous national reform programmes, national coordinators fine-tuned the content, scope and form of action plans. Each plan contains a characteristic (name, sponsor, co-sponsor, description, goal, analytical substantiation, connection to other strategic documents, deadline and a list of potential risks), a detailed schedule, measurable indicators, classification of measures (connection to integrated guidelines – recommendations – points to watch, if specified) and a quantification of budgetary influence (impact on public administration budget revenues, including share of EU resources, impact on public administration budget expenditures, net budgetary influence). This has made the strategy more transparent and the prerequisite conditions for better monitoring and evaluation have been created. The action plans in the first four mainly focus on fulfilling the objectives of integrated guidelines: Continuously adjust the educational and training system in terms of new skills requirements,

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Increase and improve investments into research and development – JEREMIE allocation is also specified in the Research and Development OP, Expand and effectively use ICT and build an information society fully accessible to all, Promote a higher business culture and create a suitable environment for small and medium-sized enterprises, Create a competitive business environment and support private initiatives via better regulation, Support flexibility related to stable employment and reduce segmentation. They also contribute to the fulfilment of objectives and other guidelines. So far, the programme of reforms has no particular action plan for climate change and energy. This plan will be supplemented within the regular evaluations of Lisbon Strategy implementation in the Slovak Republic in connection with the adoption of a complete national strategy for a climate-energy package (KEB). In the light of current on-going reforms, in particular fiscal and social, Slovakia will also have to pay significant attention to the coherence of individual measures as these methods allow for the direct inclusion of motivational elements of environmental and energy policies into their objectives. In addition to these standard national documents, Slovakia also implements a specific document, related to the competencies for growth and employment strategy, i.e. the Slovakia 21 Modernization Programme adopted via Slovak Republic Government Resolution No. 368/2008 dated 4 July 2008. The programme originated on the basis of an evaluation of the 2008 - 2010 Convergence Programme of the Slovak Republic, the European Commission and the Strategic Report of Renewed Lisbon Strategy for Growth and Employment: launching a new cycle (2008 – 2010) as a part of the Slovak Republic’s overall preparation for the introduction of Euro on 1 January 2009. The programme contains 35 mid-term and 18 short-term measures, further divided into four priority topics: research – development – innovation, education, employment, the business environment. The programme does not contain environmental and energy policy, climate change and law enforcement because they do not relate directly to structural policies connected to Euro introduction. Mid-term modernization programme measures were subsequently further developed into National Reform Programme action plans. The Cohesion Policy resources represent only one of the important resources for supporting Slovakia's reform activities, which are relevant for fulfilling Lisbon objectives. This corresponds to the allocation of the EC resources to Lisbon activities within the NSRF and OP. Table No. 12: NSRF Convergence Goal (in EUR)

Operational Programme Lisbon activities (L.A.)

Total allocation

% of L.A.

Regional OP 0 1 450 000 000 0.00% Environment OP 32 400 000 1 800 000 000 1.80% Transport OP 2 853 715 498 3 206 904 595 88.99% Information Society OP 961 713 590 993 095 405 96.84% Competitiveness and Economic Growth OP 573 383 840 772 000 000 74.27% Research and Development OP 660 795 134 883 000 000 74.84% Education OP 576 000 000 600 000 000 96.00% Employment and Social Inclusion OP 796 177 667 864 000 000 92.15%

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Health OP 0 250 000 000 0.00% Technical Assistance OP 0 97 601 421 0.00% NSRF Convergence Goal 6 454 185 729 10 916 601 421 59.12%

Table No. 13: NSRF Regional Competitiveness and Employment Goal (in EUR)

Operational Programme Lisbon activities (L.A.)

Total allocation

% of L.A.

Research and Development OP 315 966 024 326 415 373 96.80% Education OP 17 089 515 17 801 578 96.00% Employment and Social Inclusion OP 16 285 341 17 801 578 91.48% Bratislava Region OP 41 723 460 87 000 000 47.96% NSRF Regional Competitiveness and Employment Goal 391 064 340 449 018 529 87.09% Minimal financial and physical progress in the NSRF and OP implementation in the 2007–2013 programming period leads to the conclusion that Cohesion Policy's real contribution to fulfilment of National Reform Programme of the Slovak Republic priorities is only marginal. Another reason is that not all resources allocated to Lisbon activities are directly related to the implementation of National Reform Programme of the Slovak Republic measures, which are specifically focused on supporting reform efforts. Based on the 2008 - 2010 Implementation Report for the National Reform Programme of the Slovak Republic for 2009 we can identify several areas, where progress in fulfilling the National Reform Programme of the Slovak Republic is effectively supported from the Cohesion Policy resources. In the field of innovation, Structural Fund resources are allocated to the establishment of institutions and units that would serve universities and research organizations in order to transfer technologies and knowledge. The development of highly innovative companies will be supported by “venture capital” as a form of repayable financial aid to business entities through the innovative JEREMIE financial tool. In order to increase competitiveness of the regions, regional innovation centres will be built. These should create a framework to support potentially innovative businesses using applied research and to develop cooperation between enterprises with the research-development and educational institutions. In order to provide management and implementation capacities at the innovation centres, the Managing Authority for the Employment and Social Inclusion OP has published a call for the submission of applications for non-returnable financial aid, where regional units are eligible applicants. On the one hand Education OP funds are to support the educational system reforms at various levels and simultaneously to support the implementation of these changes directly at schools. The Education OP reacts to the needs of teacher preparation in terms of ICT as a precondition for them to work in an information society. The increased ability of teachers to use ICT is achieved mainly through national projects, which the teacher can participate in. These are the following national projects: Modernization of the Educational Process at Elementary Schools, Modernization of the Educational Process at Secondary Schools and Further Education of the Elementary School and Secondary School Teachers in the Subject of Informatics. A preliminary draft of standards to provide for teaching qualification to post-graduates with the working title “Course of University Teaching for Post-Graduates” has been developed. Experts from several universities will participate in the completion of the proposal in relation to the content aspect of the standards. Universities can apply for funds within a call through the EU SF Agency. The Education OP's eligible activities are focused on the teaching qualifications of post-graduates. The content mainly consists of pedagogy, psychology,

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rhetoric, modern information-communication technologies, etc. This is preparation of post-graduates for teaching and for quality education-training process within university education. The following projects, co-financed from the European Social Fund within the Employment and Social Inclusion OP also support the development of a National Flexi-Certainty System: 1. The Preparedness of the Slovak Republic for the Development of National Flexi-

Certainty System National Project was contracted in the amount of € 388,369 for the Convergence Goal and in the amount of € 43,152 for the Regional Competitiveness and Employment Goal;

2. The XVII-2 National Flexi-Certainty System National Project – submitted in September 2009 to an Internal Supervisory Monitoring Committee. Results of the project will be the basic starting points for the next national project, where the National Flexi-Certainty System and related supporting information systems will be comprehensibly processed and the key milestones of measuring the National Flexi-Certainty System will be defined.

3. The XVIII-2 Improvement of Occupational Health and Safety through Improved Guardianship, Provision of Information by Labour Inspectorate and Establishment of a Certified Workplace Ergonomics National Project will be implemented in the form of three separate projects of the National Labour Inspectorate. Project plans were submitted in 2009 and at present comments are being incorporated.

4. The XXI-2 Indicators and System of the Evaluation of Effectiveness of Active Labour Market Measures National Project – The Centre of Education at the Ministry of Telecommunications, Post and Transport requested the project. The project has been contracted and it will be finished by 28 February 2010. The contracted amount from the Employment and Social Inclusion OP totals € 346,034.16 for the Convergence Goal (regions outside the Bratislava Region) and € 59,956.71 for the Regional Competitiveness and Employment Goal (for the Bratislava Region).

5. Gender Equality Institute National Project – submitted in October 2009 to the Internal Supervisory Monitoring Committee. The basic goal is to create the environment, effective mechanisms, tools and methods to implement gender equality, to eliminate gender inequality on the labour market and to support the work-family balance.

6. The preparation of comprehensive analysis of effectiveness of active labour market measures and the development a system for assessing the effectiveness of active labour market measures in order to achieve efficiency is being implemented in connection with the XXI-2 National Project.

According to labour market surveys, active labour market measures are being implemented to decrease long-term unemployment and are supported within OPs. For this purpose the European Social Fund and the state budget allocated € 64 mil. for 2009 and € 68 mil. is projected for 2010. A self-employment contribution is attractive during the present crisis; this contribution was used by 10 % more people in July 2009. The Ministry of Labour, Social Affairs and Family expects to support for about 270,000 jobseekers via created and supported jobs on a year-on basis via such measures. The basis for building e-government in Slovakia lies in the successful implementation of the 1st Priority Axis of the Information Society OP, which was launched by public procurement to prepare 5 feasibility studies. At present, these feasibility studies are in various phases of development and specific output lies in the invitation to the first 20 calls for the submission of projects to be implemented as national projects and demand-oriented projects. Contracts

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between the Ministry of the Finance and relevant departments to implement priority service projects are being prepared. The development of access networks in rural areas will be significantly supported by implementation of the third Priority Axis of the Information Society OP, which will support activities related to building broadband networks. A feasibility study, completed in September 2009, maps the building of broadband infrastructure, the portfolio and accessibility of services, a proposal of standards and methodology according to structural funds and legislative regulation requirements. The next step will be the first calls for the submission of projects for the third Priority Axis of the Information Society OP. As to demand-oriented projects, the first call is scheduled for January 2010; for national projects, calls will be announced in the first half of 2010. Public resources (Transport OP 2007–2013), payments for selected infrastructure (electronic toll system) and private public partnerships are being used to intensively construct highways and express roads.

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C. Progress, calls to implement priorities and strategy

C.10. Measures of efficiency in relation to implemented programmes within the 2007–2013 programming period Main problems related to the start of the implementation of EU aid instruments for the 2007–2013 programming period Within preparations to commence implementation of EU aid instruments for the 2007–2013 programming period , the Slovak Republic was faced with new factors in the context of implementation of the NSRF OP, with which it had no prior experience. The biggest change compared to the 2004 – 2006 programming period lies in a significant increase of disposable funds (as much as a 3-fold increase of average annual allocation and even a 7-fold increase in absolute terms of the allocation for the entire programming period ). This increase of disposable funds resulted in greater possibilities to direct and distribute these funds to various priorities, i.e. a higher number of OPs, managing, controlling and supporting processes, placing greater demands on administrative capacities necessary to coordinate these processes. In the context of higher demands on administrative capacities there is also the issue of their high fluctuation. The Slovak Republic has encountered this factor since the 2004 – 2006 programming period . We continue to feel the need to increase qualifications and to make work in this field attractive in order to increase and retain the quality administrative capacities. New EC legislation remains an issue that is resolved over the programming period . This is not only about the new legislation, but mainly about the amendment, supplement and simplification of already existing regulations. The need to transport the Structural Fund and Cohesion Fund management system for the 2007–2013 programming period and the Structural Fund and Cohesion Fund financial management system for the 2007–2013 programming period into national legislation is still current. In close connection with this the, Slovak Republic for the first time in history, implemented the EU financial aid instruments simultaneously in two programming period s, i.e. 2004 - 2006 programming period (until 30 June 2009) and at the same time in the 2007 -2013 programming period . In connection with this new key factors affecting implementation of NSRF programmes, the Slovak Republic decided to establish the “3Z” principle, applicable for setting up of all management and control processes using modern “user friendly” IT technologies. The “3Z” principle can simplify, harmonize and streamline all processes within the preparation, implementation, coordination and control of the Structural Fund and the Cohesion Fund. Development of the Slovak Republic’s methodical and legislative framework for the 2007–2013 programming period In parallel with the process of preparing programme documents there was an on-going process of developing a basic framework for the management and implementation of Cohesion Policy in Slovakia. Its basic goal was to create favourable conditions for effective and efficient implementation of joint Slovak Republic and EU programmes, making use of experience acquired in the reduced 2004-2006 programming period . The basic framework of the management system is defined in the following documents:

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- Structural Fund and Cohesion Fund Management System for the 2007-2013 Programming period (hereinafter “Management System”);

- Structural Fund and the Cohesion Fund Financial Management System for the 2007-2013 Programming period ;

- Structural Fund and the Cohesion Fund Financing Strategy for the Programming for the 2007-2013 Programming period ;

- Act No. 528/2008 on Aid and Support Granted from the EC Funds.

C.10.1 Structural Funds and Cohesion Fund Management System for the 2007-2013 programming period The Management System, by its content and structure, represents a framework for the definition of standard procedures and related areas within the process of managing and implementing the Structural Fund and the Cohesion Fund in the 2007 - 2013 programming period . Already the first version of the Management System has been developed with the aim of implementing new elements to support higher effectiveness and efficiency when implementing EU financial aid instruments, to improve management and controlling processes, and to allow better coordination and concentration of aid. Great emphasis during the development of the Management System was placed on ensuring transparency and clarity of the whole process of submitting and assessing projects, especially the introduction of a unified system of calls for submission of projects, application forms for non-returnable financial aid, handbooks for applicants and managing authorities and also the inability to change conditions of the call in relation to the applicant. The Management System, depending on identified development needs and more detailed definition of individual procedural areas, was supplemented by Central Coordination Authority methodological guidelines. Within the period from the publication of the first version of the Management System (8 December 2006) the Central Coordination Authority issued 14 methodological guidelines covering the following procedural areas: - Central Coordination Authority Methodological Guideline No. 1/2006 for the

preparation of Operational Programmes. - Central Coordination Authority Methodological Guideline No. 2/2006 for the

preparation of a programming manual. - Central Coordination Authority Methodological Guideline No. 3/2006 for the

preparation of detailed descriptions of the management and implementation of aid from Structural Fund and the Cohesion Fund (audit of trails) in the 2007 - 2013 programming period .

- Central Coordination Authority Methodological Guideline No. 4/2006 for the preparation of an internal manual for Managing Authority and Intermediary Body under Managing Authority procedures.

- Central Coordination Authority Methodological Guideline No. 5/2007 for implementation of technical assistance in the 2007 - 2013 programming period .

- Central Coordination Authority Methodological Guideline No. 6/2007 for the process of submitting applications for non-returnable financial aid.

- Central Coordination Authority Methodological Guideline No. 7/2007 for the process of approving applications for non-returnable financial aid.

- Central Coordination Authority Methodological Guideline No. 8/2007 for monitoring and evaluation.

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- Central Coordination Authority Methodological Guideline No. 9/2007 for providing information, promotion and preparing a communication plan for the 2007–2013 programming period .

- Central Coordination Authority Methodological Guideline No. 10/2007 for the expenditure eligibility in the 2007 - 2013 programming period .

- Central Coordination Authority Methodological Guideline No. 11/2007 for the delegation of powers of the Managing Authority to an Intermediary Body under Managing Authority.

- Central Coordination Authority Methodological Guideline No. 12/2007 for contracts for non-returnable financial aid.

- Central Coordination Authority Methodological Guideline No. 13/2007 for the procedure to verify project implementation.

- Central Coordination Authority Methodological Guideline No. 14/2007 for public procurement.

Suggestions arising from the process of setting up the management and control systems, from preparing management documentation, from coordinating entities participating in the management and implementation of Structural Fund and the Cohesion Fund resulted in the need to adjust and update the Management System. The Central Coordination Authority issued the second version of the Management System on 21 January 2008. The Central Coordination Authority launched the update of the Structural Fund and the Cohesion Fund Management System, which fully replaced the previous version of this system from 8 December 2006 and all Central Coordination Authority Methodological Guidelines issued (No. 1 to 14), mainly due to the preparation of a basic framework document governing the Structural Fund and Cohesion Fund management at a central level, which is to define methodological principles and standard processes in connection with Structural Fund and the Cohesion Fund management in the 2007 - 2013 programming period . Preliminary findings and recommendations from a System Audit of the Readiness of Entities Participating in EU Funds Implementation System for the Programming Period 2007–2013 , comments from individual interested entities to the previous version of the Structural Fund and the Cohesion Fund Management System and related guidelines were considered as well as proposals and recommendations from meetings of relevant working groups regarding individual management system processes were taken into consideration when preparing the updated Management System. All relevant entities participating managing NSRF OP implementation took part in the update of the Structural Fund and the Cohesion Fund Management System by providing comments to the draft form of this update. Comments from relevant entities were an important source of information for the Central Coordination Authority, and were used by the body in the update of the Structural Fund and the Cohesion Fund Management System. The Management System, version 2.0, simultaneously introduced the ability to issue guidelines for selected areas of the Structural Fund and the Cohesion Fund Management System in the form of methodological instructions and explanations, which, depending on their character, are mandatory or recommended (based on good practice). The following guidelines were issued in 2008 and 2009 during the use of this Version 2.0 Management System: - Central Coordination Authority Guideline No. 1 for preparing a description of the

management and control system of programmes co-financed from the Structural Fund and the Cohesion Fund in the 2007–2013 programming period (2008).

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- Central Coordination Authority Guideline No. 2 for preparing a financial analysis of the project, costs and benefits of the projects and financial analysis of the applicants for non-returnable financial aid in the 2007–2013 programming period (2008).

- Central Coordination Authority Guideline No. 3 for the preparation and use of project indicators and their inclusion into ITMS 2007–2013 (2009).

- Central Coordination Authority Guideline No. 4 for the use of a code list of eligible expenses in the 2007–2013 programming period (2008).

- Central Coordination Authority Guideline No. 5 for the development of a plan of evaluations of OPs for the 2007–2013 programming period (2008).

- Central Coordination Authority Guideline No. 6 for implementing OP sections using the JEREMIE initiative (2009).

- Central Coordination Authority Guideline No. 7 for simplifying reporting of expenses in the 2007–2013 programming period (2009),

- Central Coordination Authority Guideline No. 1/2009 for the content of OP annual and final implementation reports

In connection with the adoption of Act No. 528/2008 Coll. on Aid and Support Granted from the EC Funds (hereinafter the “Act”), which represents the basic legislative regulation of the Slovak Republic governing the use of financial resources from EC funds, a third update of the Management System with effectiveness from 31 January 2009 has taken place. In addition to the Act on Aid and Support Granted from the EC Funds, conclusions of a governmental audit carried out by the Ministry of the Finance in individual Managing Authorities were also an impulse to update the Management System. The goal of this governmental audit was to assess management and control systems in individual Managing Authorities compliance with the EC legislation. Impulses and proposals from individual Managing Authorities also significantly contributed to the Management System update. The Management System update included an updated evaluation system divided into NSRF and OP evaluations. In the future with regards to coordination of entities participating in the management and implementation of the Structural Fund and the Cohesion Fund, the Central Coordination Authority continued with its effort to simplify the implementation mechanism. Such impetus for change was identified from various levels (European Commission measures and EC legislative changes, from Managing Authorities arising from bilateral negotiations between the Central Coordination Authority and the Managing Authority, which followed after the 3rd version of the Management System, and also proposals from the Central Coordination Authority itself). The Central Coordination Authority issued, after the Management System version 3.0 had been issued, a Set of Exceptions and Interpretations to Selected Provisions of the Management System with effectiveness from 27 May 2009 in order to continue with further simplification of the Management System. Identified impetuses, European Commission measures, legislative changes, exceptions granted by the Central Coordination Authority and interpretations issued by the Central Coordination Authority were incorporated into version 3.1 of the Management System, which was issued on 23 September 2009. In connection to European Commission measures, the most important changes related to incorporating the ability to simplify the reporting of eligible expenses, to allow for the co-financing of major projects before major projects are approved by the European Commission, to simplify selected procedural actions within the application for non-returnable financial aid, to modify duties related to obligatory appendices on applications for non-returnable financial aid in relation to selected applicants, etc.

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Moreover in 2009 and in part in reaction to the modification of regulations during the implementation of Cohesion Policy in the 2007–2013 programming period , the Central Coordination Authority prepared a comprehensive material called “Information on Central Coordination Authority Measures for Higher Effectiveness of the Drawing Structural Fund and the Cohesion Fund Resources in the Programming Period 2007 - 2013”. This document identifies problematic areas in the implementation of the NSRF OP and subsequently provides specific recommendations in the context of the economic crisis. A part of these measures, primarily those that directly relate to EU legislation, was reflected into the current version of the Management System and provided Managing Authorities with the possibility to apply them during Ops implementation. Others were mostly of a recommendation nature.

C.10.2. Structural Funds and Cohesion Fund Financial Management and Financing System for the 2007 - 2013 programming period The Certification Body's tasks under Article 61 of Council (EC) Regulation No. 1083/2006 are performed by the Ministry of Finance under Slovak Republic Government Resolution No. 457/2006 dated 17 May 2006. One of the Certification Body's competencies is to direct the Structural Fund and the Cohesion Fund financial management in the Slovak Republic. Within the framework of directing the bodies participating in the EU aid management and control system, it has issued methodological documents: Structural Fund and the Cohesion Fund Financial Management System for the Programming Period 2007–2013 and Structural Fund and the Cohesion Fund Financing Strategy for the Programming Period 2007–2013 . The Ministry of Finance identified the following possibilities within the application of the financial management system including an advance payment paid to the Certification Body's extra-budgetary account: - Enlargement of eligible beneficiaries for the advance payment and pre-financing

system, - Simplification of conditions for granting/accounting for advance payments within

enlargement of eligible beneficiaries for the advance payments system. In connection to the Analysis of Potential Modifications to the Structural Fund and Cohesion Fund Financial Management System for the Programming Period 2007–2013 dated March 2009, the Ministry of Finance updated, in the form of a supplement, the Structural Fund and the Cohesion Fund Financial Management System for the Programming period 2007–2013 , to Version 4.1 effective from 30 April 2009. The application of this change has created space for using advance payments paid by the European Commission to the Certification Body's off-budgetary accounts in a more flexible way as all beneficiaries can draw on funds through advance payments/pre-financing, which positively influences the smooth drawing of Structural Fund and the Cohesion Fund money. At the same time, beneficiaries do not have to look for other resources to finance their project activities. Due to the fact that the Slovak Republic applies a national system of advance payments, there is no recognition of advance payments as allowed by Article 78 of the Council (EC) Regulation No. 1083/2006. Within the statement of expenditures, only expenditures accounted for by beneficiaries are declared to the European Commission. Depending on the connection of expenditures for Structural Fund and the Cohesion Fund resources to the state budget and the situation between individual resources stipulated in the Structural Fund and the Cohesion Fund Financing Strategy for the Programming Period 2007–2013 , the Slovak

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Republic does not make use of flexibility within the engagement of Structural Fund and the Cohesion Fund resources in relation to the declaration of expenditures to the European Commission. The Slovak Republic amended the Act in connection with possibility to declare large European Commission project expenditures before such a major project is approved by the European Commission and a decision is issued. Within this amendment, the Managing Authority of the Transport OP made it possible to enter into contracts for non-returnable financial aid before a major project is approved by the European Commission. Subsequently, under the Structural Fund and the Cohesion Fund Financial Management System for the Programming Period 2007–2013 these expenditures can be declared to the European Commission within regular applications for payment. The Act went into force on 1 July 2009. The above amendment was also reflected in the Structural Fund and the Cohesion Fund Financial Management System for the Programming Period 2007–2013 , version 5.0. Since 26 October 2009, the Structural Fund and the Cohesion Fund Financial Management System for the Programming Period 2007–2013 has created space for simplified declarations of indirect expenditures in the form of a lump sum, lump rate and unit prices. At present, no Managing Authority makes use of some of these forms of indirect expenditure declarations. In connection with costs of managing the JEREMIE holding fund in the Slovak Republic, there are, at present, negotiations on-going with the European Investment Fund (EIF) about the possibility of lump sum remuneration, i.e. “flat rate”, for executing holding fund activities in connection with financial operations. The amount of the lump sum remuneration is negotiated under Article 44c) of Council (EC) Regulation No. 1083/2006 and Article 43, Paragraph 4 of Council (EC) Regulation No. 1828/2006. On 28 October 2009, three financing contracts were concluded totalling € 68 mil. The fourth contract, which will increase the total allocation to the JEREMIE holding fund to € 100 mil., will be concluded not later than March 2010. Currently, the Slovak Republic is conducting negotiations with the EIF about a establishment deed and a holding fund contract to enable the EIF to enter the structure of the holding fund. These contracts should be signed by the end of 2009. The active phase of JEREMIE initiative implementation will be launched in early 2010 after approval of the investment strategy.

C.10.3. Act No. 528/2008 Coll. on Aid and Support Granted from EC Funds This Act has been adopted with the aim of explicitly defining the roles and powers of entities participating in the management and control system of the aid granted from EC funds, support granted from EC funds and protecting the European Community’s financial interests. It stipulates the status and powers of the Slovak government, ministries and other central sate administration bodies and autonomous regions. Further, it defines the rights and duties of applicants, beneficiaries and partners and describes the procedure of applying for non-returnable financial aid. In reaction to the global economic crisis, the European Commission allowed the EU Member States to declare expenditures for major projects even before the European Commission adopts a decision providing its consent. In reaction to this change to Council (EC) Regulation No. 1083/2006, the Slovak Republic amended, in 2009, Act No. 528/2008 Coll. on Aid and Support from EC Funds. This possibility applies only to large Transport OP projects (not the Environment OP). This led to the creation of conditions for accelerated conclusion of contracts for non-returnable financial aid to implement strategic

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transport projects in the 2007 - 2013 programming period . Within the context of changes to regulations related to implementing Cohesion Policy and the needs of entities participating in the management and implementation of programmes co-financed from the Structural Fund and the Cohesion Fund in Slovakia, a wider amendment of the Act is being prepared with expected effectiveness from 1 March 2010. The amended act will contain further provisions supporting effective and accelerated drawing of Structural Fund and the Cohesion Fund money for new development projects.

C.10.4 Major projects Major projects under Article 39 of the Council (EC) Regulation No. 1083/2006 co-financed from the European Regional Development Fund or Cohesion Fund, which total costs exceed € 25 mil. for environmental projects and € 50 mil. for other projects in the 2007 - 2013 programming period will be undertaken within the Environment OP and the Transport OP. Major projects are approved by the European Commission and a Commission decision is to be issued. Indicative lists of major projects constitute a part of OPs approved by the European Commission. However, during the programming period , both Managing Authorities revised the lists of major projects in order to react to the current situation in the process of preparing and implementing (financing) these projects. The Ministry of Environment as the Managing Authority for the Environment OP plans in this programming period to undertake 19 major projects. Of this number, 18 projects will be implemented within Priority Axis 1: Integrated Protection and Rational Use of Waters in the volume of more than € 1,088 billion (total costs). The Banská Bystrica – Flood Protection Project is to be implemented within Priority Axis 2: Flood Protection with total costs of € 0.076 billion. By the end of 2009, the Managing Authority will submit a revised list of large Environment OP projects to the Environment OP Monitoring Committee for approval (see Table No. 14). Table No. 14: Updated list of major projects within the Environment OP Priority Axis

Project name

1 Drinking water supply and sewerage in the Orava region, phase 2.

1 Starina – water treatment plant and the doubling of feeder piping

1 Drinking water supply and sewerage for communities in Bodva micro-region

1 Drinking water supply and sewerage for communities in Hornád – Slanec micro-region

1 Drinking water supply and sewerage for communities in Bardejov - Horná Topľa micro-region

1 WWTP north – Reconstruction and intensification of WWTP in Bánovce, Partizánske, Topoľčany

1 WWTP centre – completion and reconstruction of WWTP in Levice, Zlaté Moravce, Vráble, Tlmače

1 Water supply, sewerage and WWTP in Ilava district

1 Supply and sewerage in Púchov district

1 Intensification of WWTP, sewerage and drinking water supply in Trenčín region

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1 Water supply, sewerage and waste water treatment in Bytča district

1 Water supply, sewerage and waste water treatment in Dolné Kysuce region

1 Water supply, sewerage and waste water treatment in Stredné Kysuce region

1 Prievidza – sewerage and waste water treatment system

1 Trnava and Piešťany – completion of sewerage system

1 Danube region – sewerage for the Danube sections of the Bratislava region

1 Spiš and Tatra regions – water supply and sewerage

1 SKK Ružomberok and Liptovská Teplá, Liptovské Sliače WWTP

2 Banská Bystrica – flood protection

Source: Ministry of the Environment Within the Environment OP, as of 30 September 2009, no applications for payments were submitted to the European Commission and simultaneously none of the major projects reached its implementation phase. The Transport OP also contained a preliminary list of major projects co-financed from European Regional Development Fund and Cohesion Fund resources. In October 2009, the Transport OP Monitoring Committee approved an Updated List of Transport OP Projects for 2007–2013 , which was subsequently taken considered by the Slovak government. Table No. 15 Updated list of major projects within the Transport OP Priority Axis 1 – Railroad infrastructure

No. Project name

1. Modernization of Žilina - Krásno n. Kysucou track

2. Modernization of Nové Mesto nad Váhom – Púchov railway track, part: Nové Mesto nad Váhom – Zlatovce

3. Modernization of Nové Mesto nad Váhom – Púchov railway track, part: Zlatovce - Trenčianska Teplá

4. Modernization of Nové Mesto nad Váhom – Púchov railway track, part: Trenčianska Teplá – Beluša

5. Žilina Teplička, siding station

6. Modernization of Čierna nad Tisou railway station

7. Project documentation, Liptovský Mikuláš – Košice track section

8. Modernization of Nové Mesto nad Váhom – Púchov railway track, part: Beluša - Púchov

9. Modernization of Púchov – Žilina track

10. Modernization of Žilina – Košice track, part: Kysak – Košice

11. Modernization of 4th corridor track, part: Slovak/Czech – Kúty state border

Table No. 16 Updated list of major projects within the Transport OP

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Priority Axis 2 – Road infrastructure (TEN-T)

No. Project name

1. D3 Hričovské Podhradie - Žilina, Strážov

2. D1 Sverepec – Vrtižer

3. D3 Svrčinovec - Skalité

4. D3 Čadca Bukov - Svrčinovec

5. D1 Fričovce - Svinia

6. D1 Prešov západ - Prešov juh

7. D3 Kysucké Nové Mesto - Oščadnica

8. D1 Hubová - Ivachnová

9. D1 Turany - Hubová

10. D1 Jánovce - Behárovce

Table No. 17 Updated list of major projects within the Transport OP Priority Axis 3 – Infrastructure of intermodal transport

No. Project name

1. Public terminal of Bratislava intermodal transport

2. Public terminal of Žilina intermodal transport

3. Public terminal of Zvolen intermodal transport

4. Public terminal of Košice intermodal transport

Table No. 18 Updated list of major projects within the Transport OP Priority Axis 4 – Infrastructure of integrated transport systems

No. Project name

1. Railway connection to the M.R. Štefánik airport, including doubling of railway track between Bratislava Petržalka - Kittsee and between Bratislava Hlavna Stanica - Bratislava Nové Mesto

2. New railway connection Bratislava Predmestie - Bratislava Petržalka

3. Bratislava integrated transport system

4. Integrated railway passenger transport system in Košice and the Košice region (IDSK)

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Table No. 19 Updated list of major projects within the Transport OP Priority Axis 5 – Road infrastructure (express roads and 1st class roads)

No. Project name

1. R1 Žarnovica - Šášovské Podhradie, 1st and 2nd phase

2. R4 Košice – Milhosť

3. R2 Ruskovce – Pravotice

4. R2 Zvolen východ – Pstruša

5. R2 Pstruša – Kriváň

6. I/51 Trnava north by-pass road - (2nd, 3rd phase)

8. I/75 Galanta, by-pass road (3rd phase)

9. I/61 Trenčín – bridge

10. The National Transport Information System and IDS (Intelligent Transport Systems), largest merger in the Slovak Republic

11. R4 Prešov – by-pass road

12. R2 Gombasek – Včeláre

13. I/18 Žilina – south-east

14. R2 Žiar nad Hronom – by-pass road

15. I/68 Prešov - Škultétyho – ZVL

16. R2 Ožďany – Zacharovce

17. R2 Zacharovce – Bátka

18. R2 Bátka – Figa

Table No. 20 Updated list of major projects within the Transport OP Priority Axis 6 – Railway public passenger transport

No. Project name

1. Suburban double-deck trains – procurement

2. International transport vehicles - procurement

The updated lists of major projects within the Transport OP contain 49 projects. As of 30 September 2009, 6 applications for non-returnable financial aid were submitted to the European Commission, of which 2 were approved (Modernization of Žilina – Krásno nad Kysucou railway track and D1 Sverepec – Vrtižer). 5 of these projects are in their implementation phase and 1 major project (D3 Hričovské Podhradie – Žilina, Strážov) has been finished.

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C.11. Development of policies and legislation

C.11.1 Modernization of public policies Continuity within the process of public policy modernization is to be secured via the adoption and implementation of the Slovakia 21 Modernization Programme. The goal is to provide an impulse for modernization efforts and to define, in terms of a framework, the main areas and measures that must be taken to ensure the necessary prerequisites for quick and, in a long-term, sustainable economic growth, an increase in social mobility, strengthening of social cohesion, alleviation of the impacts of demographic developments and improvements in the adaptability of the economy to external and internal environment changes without the benefit of a separate currency. Specific measures are: - Modernizing the institutional background for supporting science, research and

innovation; - Improving accessibility to quality education for all segments of the population at all

educational levels and in various phases of life; - Increasing the number of jobs available for persons from among the long-term

unemployed, socially threatened groups, graduates, parents with small children, women after parental leave and older employees while at the same time making the labour market more transparent and reducing social exclusion;

- Improving the business environment and support for small and medium-sized enterprises through better law enforcement, less administrative burden and better regulation;

- Improving consumer awareness mainly with regards to highly regulated markets, increasing transparency in both public procurement and in granting money from EU structural financial instruments.

Slovakia was called upon to take such measures by the evaluation of the Slovak Republic’s Convergence Programme for 2008-2010 from the European Commission and by the Strategic Report of the Renewed Lisbon Strategy for Growth and Employment: Launching a New Cycle (2008 – 2010). Specific objectives were reflected in the Slovak Republic’s National Programme for 2008-2010 and specific steps for the fulfilment of the objectives defined in relevant action plans.

C.11.2 Coherence Policy In 2008 Act No. 528/2008 Coll. regarding Aid and Support Granted from European Community Funds (hereinafter the “Aid and Support Act”) was adopted effective 1 January 2009. This Act comprehensively governs the manner of granting and using of aid and support from Community funds in compliance with applicable provisions of the EU regulations. It defines the role and powers of individual bodies within the management and control system, wherein it appoints the government of the Slovak Republic as the main management, coordination and control authority. At the same time it also defines competencies and procedures for other entities that participate in granting aid and support, such as the central coordination authorities, budgetary organisations, certification bodies, audit bodies, intermediary bodies and paying authorities. Act No. 266/2009 Coll. went into effect on 7 July 2009. This Act amends Act No. 528/2008 regarding Aid and Support Granted from European Community Funds. The main impulse for amending the Aid and Support Act was

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the modification of the European Council’s general regulation related to enabling member states to include expenditures for major projects not yet approved by the European Commission into the statements submitted to the European Commission. Harmonization of the text of the Aid and Support Act with provisions of the European Council’s general regulation enabled budgetary organisations to provide assistance from European Community funds to undertake major projects before such assistance is approved by the European Commission and to enter into a contract to grant such non-returnable financial assistance before such assistance is approved. At present, another amendment of the Aid and Support Act is being prepared with effectiveness from 1 March 2010. The goal is to modify provisions of the valid legal regulation based for both practical reasons and other requirements. Proposed amendments to the valid act are to modify provisions related to Operational Programmes in the areas of transportation, employment and social inclusion, and fisheries. Provisions in the area of financial management for granting aid and support and the basic principles for determining the amount and collection of fines for breaching free trade rules are being modified. The area of project inspections is also being modified. The “European Grouping for Territorial Cooperation” legal institute implemented European Parliament and Council (EC) Regulation No. 1082/2006 on a European Grouping for Territorial Cooperation and an amendment to Act No. 540/2001 Coll. regarding State Statistics as amended, which went into effect on 1 May 2008. This Act governs the establishment, origins, status, management, cancellation, winding-up and supervision of activities of the European Grouping for Territorial Cooperation with headquarters in the territory of the Slovak Republic. The grouping's goal is to alleviate and support cross-border, transnational and/or inter-regional cooperation between the members of the grouping in order to strengthen economic, social and territorial cohesion. The Ministry of Construction and Regional Development performs the tasks of a registration office and is simultaneously responsible for the management of a register of European groupings for territorial cooperation in electronic form. The Ministry of Construction and Regional Development has prepared the Slovak Republic’s Consolidated Opinion towards the EU’s call for cohesion policy included in the fourth Report of Economic and Social Cohesion submitted to the European Commission in May 2007. This consolidated opinion served as one of the prerequisites for the preparation of the Slovak Republic’s preliminary opinion within discussion on a revision of the EU budget, which was conducted in 2008 and 2009. The Slovak Republic’s preliminary opinion as to the revision of the EU budget and policies was approved by the Slovak government via Resolution No. 189/2008 dated 26 March 2008, which was then submitted to the European Commission in April 2008 as a contribution to the discussion on the form of the EU budget and policies after 2013. The Ministry of Construction and Regional Development has also prepared the Slovak Republic’s Preliminary Opinion as to the Green Book on Territorial Cohesion. This European Commission document was published on 6 October 2008 at the beginning of a public discussion on EU territorial cohesion. The goal was to contribute to a better mutual understanding of the territorial cohesion concept and its consequences in terms of EU policy, cooperation and coordination. The Ministry of Construction and Regional Development as the central state administration body for regional development materials titled: “The Slovak Republic’s Draft Preliminary Opinion as to the Green Book on Territorial Cohesion” to the Slovak government; these materials were subsequently adopted via the Slovak government’s Resolution No. 145 dated 18 February 2009. The Slovak Republic's preliminary opinion as to Green Book and approved by the government was interpreted by the Slovak Minister of

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Construction and Regional Development in the form of a letter dated 24 February 2009 and addressed to Ms. Danute Hübner, the European Commission member responsible for regional policy.

C.11.3 Regional policy and regional development Act No. 539/2008 Coll. on Support for Regional Development, with effectiveness from 1 January 2009, was adopted via Slovak National Council Resolution No. 1114 from 2008. The above Act creates the necessary space and conditions for more effective realisation of regional development policy in the Slovak Republic. It defines objectives and conditions for supporting regional development; it specifies the competencies of state administration bodies, semi-autonomous regions, communities and other entities within territorial cooperation. Simultaneously it defines the basic documents related to regional development at the central, regional and local levels. With regard to the need to provide for not only economic and social development, but also for territorial development in the regions, it creates the conditions for more effective territorial cooperation. It emphasizes quality cooperation between social-economic partners in preparing, fulfilling, monitoring and assessing regional development objectives. In compliance with the Act on Support for Regional Development (under § 6), the Ministry of Construction and Regional Development is now providing for the development of the Slovak

Republic’s National Regional Development Strategy. This defines the government’s strategic approach to support for regional development in the long-term while respecting the principles of sustainable development. The goal is to: - Assess the internal potential of regions (NUTS III) and the competitive advantages they

possess in both a national and European context; - Formulate a long-term vision of support for regional development and a strategy with

the establishment of priorities and objectives; - Find financial resources and forms of financing; - Define institutional and organizational provisions for realising this strategy, including

regular monitoring and evaluation of achieving quantified objectives. The National Regional Development Strategy should be a foundation document for the preparation of the programme documents for utilising EU funds after 2013.

C.11.4 Public procurement Based on the adoption of new public procurement directives (European Parliament and Council Directive No. 2004/17/EC on Coordinating Procurement Procedures for Entities Operating in Water, Energy, Transport and Postal Services Sectors and No. 2004/18/EC on the Coordination of Procedures for the Award of Public Works Contracts, Public Supply Contracts and Public Service Contracts), Act No. 25/2006 Coll. on Public Procurement as amended was prepared (hereinafter the “Public Procurement Act”) effective from 1 February 2006. The Public Procurement Act created a legislative framework for the electronisation of public procurement by implementing rules allowing the use of electronic communication means to award contracts within the public procurement process. From 1 January 2007 until 30 September 2009 several amendments of the Public Procurement Act were adopted focusing mainly on:

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- Amendment of legislation related to personal status of the applicant/interested person through defining “serious professional misconduct” with special reference to participation in an agreement restricting competitiveness within public procurement and other gross breaches of the law or contractual duties, which can be proved by a final decision of a competent public authority.;

- In connection with incorrect application practices – the use of references as a criterion for the evaluations of bids; the Public Procurement Act explicitly stipulates that neither requirements for the demonstration of financial and economic status and technical or professional qualifications of the applicant or the interested person can be a criterion for the evaluation of bids.;

- In connection with the use of negotiation procedure without publication of the public contracting authority and contracting authority's duty to inform the Office for Public Procurement of the start of a negotiation procedure without publication, which the office publishes on its Internet website. This modification should result in the transparency when using this procedure to award contracts;

- A duty was imposed on the public contracting authority and contracting authority to send an announcement to the Office for Public Procurement regarding the publishing of a call for submission of bids within two working days before the publishing of the call to the public contracting authority's/contracting authority's Internet website in order to increase transparency of awarding non-priority services (Appendix No. 3 to the Act). The content of such a call was modified as well;

- Since 1 January 2009, the Public Procurement Act has also governed the issuance of the Public Procurement Journal in electronic form. Announcements used within public procurement can be sent from 1 July 2009 to the Office for Official Publications of the EC and the Office for Public Procurement in electronic form and on the basis of procedures available at the web headquarters of the publication office and this office. This modification provides gradual electronisation of the contract awarding process;

- The Office for Public Procurement prepared an amendment to the Public Procurement Act, which adopted the European Parliament and Council Directive No. 2007/66/EC dated 11 December 2007, which amends Council Directives No. 89/665/EEC and 92/13/EEC, as to increasing the efficiency of investigation procedures into the award of public contracts. The amending act will go into effect on 1 January 2010.

In reaction to the ongoing shortcomings within public procurement of works, goods and services within projects co-financed from the Structural Fund and the Cohesion Fund, the Department for the Inspection of Public Procurement Process in Relation to the Acquisition of Non-refundable Funds from the EU Controlling Department was established at the Office for Public Procurement in 2008. Its mission is to provide interoperability for Managing Authorities during implementation of individual Operational Programmes in public procurement. At their request, it prepares professional opinions towards specific public procurement issues and inspects public procurement processes before entering into contracts with successful applicants. Its activity helps increase the quality of public procurement when granting non-refundable contributions from EC funds and contributes to the overall transparency of this process.

C.11.5 Environmental impact evaluation The issue of assessing strategic documents (plans and programmes) and proposed activities (projects, the building of operations, facilities and other interventions into the environment) in

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the Slovak Republic is dealt with by Act No. 24/2006 Coll. on Environmental Impact Evaluation as amended. The European Commission sent the Slovak Republic a formal notice under Article 226 of the Contract with the European Community – Breach No. 2007/2385 of 31 January 2008 – related to the incorrect transposition of Council Directive No. 85/337/EEC dated 27 July 1985 on the Evaluation of the Environmental Effects of Certain Public and Private Projects in the wording of Council Directive No. 97/11/EC and Council Directive No. 2003/35/EC (hereinafter “EIA Directive”), which stipulates the analysis of national measures for transposition of the EIA Directive in which it was stated that some provisions of the directive (Articles 4, Paragraphs 2 and 3 in connection with Appendices II and III, Article 7, Article 9, Paragraphs 1 and 2) were not fully and/or correctly transferred. Slovakia’s Permanent Representation to the EU forwarded a notice to the Ministry of the Environment (formal notice): Commission (2008) 4643 dated 23 September 2008 (delivered on 24 September 2008), by which the Commission followed a formal notice dated 1 February 2008 within procedure No. 2007/2385. The Commission stated that the Slovak Republic by adopting and not announcing Act No. 275/2007 Coll. and Act No. 454/2007 Coll. did not meet its commitments arising from the EIA Directives, specifically the fifth indent of Article 1, Paragraph 2, Article 6, Paragraph 4, Article 8, Article 9, Paragraph 1, Article 10a and Article 12, Paragraph 2 related to the status of the public within the environmental decision-making process. The Slovak Republic reacted to the above formal notice by enacting legislative amendments to Act No. 24/2006 Coll. on the Evaluation of Environmental Impacts as amended. The amending act regarding environmental impact evaluation – Act No. 287/2009 Coll. – went into effect on 1 September 2009 and mainly deals with refining the procedure in regard to changes in proposed activities, including refining decisions that are subject to evaluation even if such activities are not stated in the appendix of the act. Simultaneously, the amending act governs the evaluation of cross-border impact and informing the public after a decision to allow a proposed activity is made. By submitting a proposal as the initiating member it was possible to resolve the status of the public within environmental decision-making process. The Slovak Republic, after the issuance of the amending act, properly notified the European Commission and is of the opinion that this amending act eliminated the non-compliance of Slovak legislation with relevant EU directives in the field of the environmental impact evaluation.

C.11.6 Water management - Act No. 364/2004 Coll. on Water and on Amendment and Supplement of the Slovak

National Council Act No. 372/1990 Coll. on Offenses (the Water Act) as amended by Act No. 587/2004 Coll., Act No. 230/2005 Coll., Act No. 479/2005 Coll., Act No. 532/2005 Coll., Act No. 359/2007 Coll., Act No. 514/2008 Coll. and Act No.. 515/2008 Coll.

- Slovak Government Regulation No. 755/2004 Coll., which stipulates the amount of non-regulated payments, fees and payment details for water use as amended by Government Regulation No. 367/2008 Coll.

- Act No. 442/2002 Coll. on Public Water Supplies and Public Sewerage, including amendment and supplementation of Act No. 276/2001 Coll. on Network Utility Regulation as amended by Act No. 525/2003 Coll., Act No. 364/2004 Coll., Act No.

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587/2004 Coll., Act No. 230/2005 Coll., Act No. 515/2008 Coll. and Act No. 394/2009 Coll.

- Act No. 666/2004 Coll. on Flood Protection as amended by Act No. 332/2007 Coll. and Act No. 515/2008 Coll. At present, a new draft bill on flood protection (proposed effective date of 1 February 2010) is within the legislative process, more precisely in its second reading in the National Council of the Slovak Republic.

C.11.7 Air protection - Act No. 401/1998 Coll. on Air Pollution Fees as amended by Act No. 161/2001 Coll.,

Act No. 553/2001 Coll., Act No. 478/2002 Coll., Act No. 525/2003 Coll., Act No. 587/2004 Coll., Act No. 571 /2005 Coll., Act No. 203/2007 Coll., Act No. 529/2007 Coll., Act No. 515/2008 Coll. and Act No. 286/2009 Coll.

- Act No. 478/2002 Coll. on Air Protection including supplementation of Act No. 401/1998 Coll. on Air Pollution Fees as amended (the Air Act) as amended by Act No. 245/2003 Coll., Act No. 525/2003 Coll., Act No. 541/2004 Coll., Act No. 572/2004 Coll., Act No. 587/2004 Coll., Act No. 725/2004 Coll., Act No. 230/2005 Coll., Act No. 479/2005 Coll., Act No. 532/2005 Coll., Act No. 571/2005 Coll., Act No. 203/2007 Coll., Act No. 529/2007 Coll., Act No. 515/2008 Coll. and Act No. 286/2009 Coll.

- Act No. 286/2009 Coll. on Fluorinated Greenhouse Gases as amended - Ministry of the Environment Decree No. 705/2002 Coll. on Air Quality as amended by

Decree No. 351/2007 Coll. - Ministry of the Environment Decree No. 409/2003 Coll., stipulating emission limits,

technical requirements and general conditions for using resources in facilities where organic solvents are used as amended by Decree No. 132/2006 Coll. and Decree No. 457/2007 Coll.

- Ministry of the Environment Decree No. 133/2006 Coll. on Requirements for Restricting Volatile Organic Compound Emissions from the Use of Organic Solvents in Regulated Products as amended by Decree No. 30/2009 Coll.

- Ministry of the Environment Decree No. 338/2009 Coll., which executes some provisions of the Air Act

- Ministry of the Environment Decree No. 314/2009 Coll., which executes the Act on Fluorinated Greenhouse Gases as amended

- Act No. 76/1998 Coll. on the Protection of the Earth's Ozone Layer and supplementation of Act No. 455/1991 Coll. on Trade Licenses (the Trade License Act) as amended by Act No. 408/2000 Coll., Act No. 553/2001 Coll., Act No. 525/2003 Coll., Act No. 364/2004 Coll., Act No. 587/2004 Coll., Act No. 633/2004 Coll. and Act No. 515/2008 Coll.

- Act No. 572/2004 Coll. on Trading with Emission Quotas as amended by Act No. 733/2004 Coll., Act No. 117/2007 Coll. and Act No. 515/2008 Coll.

- Ministry of the Environment Decree No. 131/2006 Coll., which stipulates national emission limits and the total pollutant quotas as amended by Decree No. 203/2008 Coll.

C.11.8 Waste management - Act No. 223/2001 Coll. on Waste as amended by Act No. 553/2001 Coll., Act No.

96/2002 Coll., Act No. 261/2002, Act No. 393/2002 Coll., Act No. 529/2002 Coll., Act

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No. 188/2003 Coll., Act No. 245/2003 Coll., Act No. 525/2003 Coll., Act No. 24/2004 Coll. , Act No. 443/2004 Coll., Act No. 587/2004 Coll., Act No. 733/2004 Coll., Act No. 479/2005 Coll., Act No. 532/2005 Coll., Act No.571/2005 Coll., Act No. 127/2006 Coll., Act No. 514/2008, Act No. 515/2008 Coll., Act No. 519/2008 Coll. and Act No. 386/2009 Coll.

- Act No. 17/2004 Coll. on Waste Disposal Fees as amended by Act No. 587/2004 Coll. and Act No. 515/2008 Coll.

- Act No. 127/2006 Coll. on Persistent Organic Substances, including amendment and supplementation of Act No. 223/2001 Coll. on Wastes as amended by Act No. 515/2008 Coll.

- Ministry of the Environment Decree No. 283/2001 Coll. on the Execution of Some Provisions of the Act on Waste as amended by Decree No. 509/2002 Coll., Decree No. 128/2004 Coll., Decree No. 599/2005 Coll. and Decree No. 301/2008 Coll.

- Ministry of the Environment Decree No. 125/2004 Coll., which stipulates details for processing old vehicles and some requirements for the vehicle production as amended by Decree No. 227/2007 Coll.

- Ministry of the Environment Decree No. 208/2005 Coll. on the Handling of Electrical Equipment and Electric Waste as amended by Decree No. 313/2007 Coll.

- Act No. 529/2002 Coll. on Packaging and as amended by Act No. 245/2003 Coll., Act No. 525/2003 Coll., Act No. 24/2004 Coll., Act No. 443/2004 Coll., Act No. 587/2004 Coll., Act No. 733/2004 Coll., Act No. 515/2008 Coll. A new Packaging Act is within the legislative process. The act is to be submitted to the meeting of the Legislative Council of the Government of the Slovak Republic in November 2009.

- Ministry of the Environment Decree No. 732/2002 Coll. on the List of Non-reusable Deposit Packages, the Advance Provided for them and the Advance Provided for Re-useable Packages as amended by Decree No. 29/2009 Coll.

C.11.9 Protection of biodiversity and landscape - Act No. 543/2002 Coll. on the Protection of Biodiversity and Landscape as amended by

Act No. 525/2003 Coll., Act No. 205/2004 Coll., Act No. 364/2004 Coll., Act No. 587/2004 Coll., Act No. 15/2005 Coll., Act No. 479/2005 Coll., Act No. 24/2006 Coll., Act No. 359/2007 Coll., Act No. 454/2007 Coll., and Act No. 515/2008 Coll.

- Ministry of the Environment Decree No. 24/2003 Coll., which executes Act No. 543/2002 Coll. on the Protection of Biodiversity and Landscape as amended by Decree No. 492/2006 Coll. and Decree No. 638/2007 Coll.

- Act No. 15/2005 Coll. on the Protection of Wild Species of Flora and Fauna by Regulating their Trade as amended by Act No. 672/2006 Coll., Act No. 330/2007 Coll., Act No. 452/2007 Coll. and Act No. 515/2008 Coll.

- Ministry of the Environment Decree No. 110/2005 Coll., which executes some provisions of the Act on the Protection of Wild Species of Flora and Fauna by Regulating their Trade as amended by Decree No. 449/2009 Coll.

- Act No. 151/2002 Coll. on the User of Genetic Technologies and Genetically Modified Organisms as amended by Act No. 587/2004 Coll., Act No. 77/2005 Coll., Act No. 100/2008 Coll. and Act No. 515/2008 Coll.

- Ministry of the Environment Decree No. 399/2005 Coll., which executes Act No. 151/2002 Coll. on the Use of Genetic Technologies and Genetically Modified Organisms as amended by Decree No.312/2008 Coll.

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C.11.10 IT use in society The strategy of IT use in society as adopted by Slovak Government Resolution No. 131/2008 is a key document for managing the electronisation of public administration in Slovakia. The Public Administration Informatisation Strategy defines strategic objectives and steps that will be taken to achieve higher citizen satisfaction with public administration by providing services in an attractive and simple way while increasing their effectiveness and competence and cutting public administration costs. This contains strategic objectives of e-Government implementation and defines steps leading to modernization of public administration and electronisation of its services. Simultaneously, the Public Administration Informatisation Strategy defines criteria and procedures for e-Government financing, which assumes a combination of state budget resources and EU structural funds. The National Strategy for Information Security of the Slovak Republic as adopted by the Slovak Government on 27 August 2008 is the main document dealing with information security. The strategy describes the strategic objectives and defines the priorities of the Slovak Republic in the field of information security. Simultaneously, it identifies the most important problems and obstacles that are reflected in key tasks. The strategy also includes starting points, the distribution of powers and the proposed direction, priorities and steps in order to reach the goal. The document also contains a basic description of individual tasks in order to provide for the protection of Slovakia's digital space in terms of unclassified information. On 3 December 2008, the Slovak Government adopted Decree No. 876/2008 and thereby a document called the National Strategy of the Slovak Republic for Digital Integration. The document, in compliance with EU priorities, calls on state administration, local authorities and third sector organizations to resolve and take specific digital integration steps and measures. Possibilities that lead to the digital inclusion of as many citizens threatened by digital exclusion as possible into an information society were grouped into five basic areas that are dealt with in the document. A national concept of public administration informatisation draws upon the Public Administration Informatisation Strategy and defines principles for building e-Government and implementing electronic services in Slovakia. Simultaneously it defines integrated system architecture and priorities for public administration in order to provide problem-free interoperability and independence from technical platforms. The concept includes the following strategic objectives in the field of the public administration informatisation until 2013: - Higher satisfaction of citizens, entrepreneurs and other public with public

administration - Electronisation of public administration processes - More effective and efficient public administration – the state will cost less - Higher public administration competency. In October, the Slovak government adopted a new version of the Informatisation of Society Strategy for 2009 - 2013. Its goal is to update the strategy for building an information society in Slovakia while taking into account new fields and directions in the development of information-communication technologies, and also the need to clarify and update strategic documents, which were jointly developed for informatisation and their time-frame has been largely exceeded. Simultaneously, it was necessary to define the key fields of societal

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informatisation, to emphasise their interdependencies and to create a framework for new, at least in terms of societal informatisation, strategic documents that are already in place or that are being developed. The National Policy for Electronic Communications for 2009 – 2013 defines the electronic communication networks and services development strategy in the Slovak Republic. It primarily focuses on harmonising the regulation framework, developing competition, using the frequency spectrum as well as privacy and security protection, crisis management and critical infrastructure protection, international cooperation and the development of innovative services.

C.11.11 Innovations The development of the Slovak Republic Innovation Strategy until 2013 drew on the need to create a basic document that would deal with the issue of innovation in the Slovak Republic as one of the main instruments for building a knowledge-based economy. The document should also significantly contribute to fulfilling Lisbon objectives. The document creates the basic framework for identifying and successfully fulfilling individual measures through which the objectives of the Lisbon Strategy, the Slovak NSRF for 2007–2013 and other related documents will be met. In connection to the Slovak NSRF for 2007-2013 the Innovation Strategy is compatible with the Competitiveness and Economic Growth OP and the Research and Development OP.

C.11.12 Tourism In accordance with the Slovak government’s policy statement, the Ministry of the Economics launched the re-evaluation of the existing strategy and the creation of a new Slovak Republic Tourism Development Strategy until 2013. The adoption of the strategy was connected with the definition of principles for tourism development governmental policy as a public interest area with emphasis on support for tourism development, the importance of domestic and active foreign tourism and the creation of a legislative framework to assist in the implementation of governmental tourism development policy takes into account the institutionalization of this industry. Stronger competitiveness in this industry along with better utilization of potential in order to balance regional disparities and to create new jobs is a strategic goal for the tourism development in Slovakia until 2013. The document specifies the main tasks to be fulfilled to reach the objectives of the strategy, wherein the development of domestic tourism also takes into account its social aspect. One basic condition of tourism development in Slovakia lies in its sustainability, not only in economic and social terms, but also in environmental terms. However, the quality of services is a supporting element, i.e. it is necessary to hire qualified labour to provide these tourism services.

C.11.13 Education Act No. 363/2007 Coll. went into effect on 1 September 2007. This Act amends Act No. 131/2002 Coll. on Universities as amended; the goal of the amending act is to contribute to the effective functioning of the university system in compliance with Bologna process documents and practical needs. Simultaneously, it governs the competence of foreign

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universities and private universities, by which it ensures that only accredited universities will operate in Slovakia. The act will also include the implementation of an EU directive related to refugees and students from third countries. It supports options for implementing new supporting educational programmes in the university education system through a system of scholarships, tax advantages or wage condition adjustments as well as by motivating and supporting universities during the implement of specific modules related primarily to small and medium-sized enterprises operating within university education. In the first half of 2008, one of the most important changes in the field of elementary and secondary education was the achievement of one of the key intentions of the Slovak Republic’s National Reform Programme, i.e. the adoption of an act on education and training (Act No. 245/2008 Coll. on Education and Training (the Education Act) as amended, which took effect on 1 September 2008, with the exception of a provision about new financing for teaching assistants for pupils from socially disadvantaged environments, which went into effect on 1 January 2009. The new act replaced Act No. 29/1984 Coll. on the Elementary and Secondary School System and creates the conditions for necessary changes in the educational system and teaching. It redefines the educational system in the Slovak Republic and places the Slovak educational system into the European framework. It implements a state educational programme binding for all schools and simultaneously it gives them options to create their own school educational programmes on the basis of the programme. Act No. 282/2008 Coll. on Support for Youth Work governs support for work with youth by means of accrediting educational facilities in the field of work with youth and voluntary service in the field of work with youth. The act took effect on 1 September 2008. Act No. 184/2009 Coll. on Professional Education as amended took effect on 1 September 2009, with the exception of some provisions. The purpose of the act is to comprehensively rearrange the legal conditions for providing professional training and preparation at secondary vocational schools and school facilities in the Slovak Republic in order to prepare students for life and work under the conditions of a knowledge-based society and the labour market. At the same time it governs the status and tasks of four-party cooperation entities in terms of professional education and preparation; those four parties are state administration, self-governing regions, employers and employees. The goal of this legislation is to make education and training outcomes compatible with educational-training systems in other EU states. Act No. 317/2009 Coll. on Teaching Staff and Professional Staff as amended took effect on 1 November 2009, with the exception of some provisions. The purpose of this act is to comprehensively resolve the status, professional development and career growth of teaching and professional staff at schools, school facilities and other educational and training facilities under central state administration bodies as well as other teaching staff in facilities designed for continual education of teaching staff. It creates the legislative conditions for fundamental changes in the remuneration system for teaching and professional staff in connection to continual education of these groups of employees. It arranges the prerequisites for continual education, accreditation of the continual education programmes and implementation of a new accredited and career system for teaching and professional staff. Similarly, the act arranges for teacher and professional employee care in terms of health care, labour force regeneration, social care, prevention against increased aggression and violence and moral valuation.

C.11.13 Research and development

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Support for research and development is directly connected to Act No. 172/2005 Coll. on the Organization of the State Support for R&D and amendments to Act No. 575/2001 Coll. on the Organization of Government and Central State Administration Organization Activities as amended, as amended by Act No. 233/2008 Coll., which amends Act No. 172/2005 Coll. on the Organization of the State Support for R&D and Act No. 575/2001 Coll. on the Organization of Government and Central State Administration Organization Activities as amended. The amending act primarily anchored the definition of innovation and research excellence centres and also specialized research and technical organizations, which include a science-technical park, a research-development centre and a technical incubator. Further, the Act includes a procedure for assessing capacity to carry out research and development. Act No. 561/2007 Coll. on Investment Assistance as amended defines within regional technical and technological development new organizational structures for investment assistance (technological centres, strategic services centres). It defines eligible investment assistance costs to cover the costs of intangible assets procurement (the patent law, licenses, know-how and non-proprietary technical knowledge). In 2009, Act No.185/2009 Coll. on R&D Incentives and amendment to Act No. 595/2003 Coll. on Income Tax as amended was adopted and is to stimulate entrepreneurs to more largely base their development and business activities on the results of research and development. These incentives will create the necessary conditions to increase expenditures for science and technology from funds that entrepreneurs will spend from their own resources for the obligatory co-financing required for individual incentives. It will simultaneously create conditions for increased micro-entrepreneur, small entrepreneur and medium-sized entrepreneur participation in research and development.

C.11.14 Employment and labour market The Ministry of Labour, Social Affairs and Family of SR has developed a new strategy for supporting the creation of new jobs and for placing unemployed in work vacancies and job sustainability. The strategy has been passed into an amendment to Act No. 5/2004 Coll. on Employment Services as amended (Act No. 139/2008 Coll.). The strategy is also incorporated into the Slovak Republic’s National Reform Programme for 2008-2010, in the Employment and Social Inclusion OP and the NSRF. The goal of Act No. 139/2008 Coll. is to create a legislative framework for implementing European Commission recommendations within evaluation of the Slovak Republic’s National Reform Programme, including a system supporting the solutions for long-term unemployment in the form of new active measures and procedures for their inclusion into the labour market. Simultaneously, it provides starting points for implementing priorities and measures of the Employment and Social Inclusion OP, for eliminating problems that arise from the present application of the Employment Services Act in practice, re-evaluation of existing and adoption of new active labour market measures. Moreover the act made it possible to react to changing situations on the labour market due to higher demand for qualified employees through active labour market measures via contributions for labour market education and training and via the system established by the Centre for Labour, Social Affairs and Family for job applicants and persons interested in work who attend labour market education and training. The changes primarily relate to: - Extension of supported groups of disadvantaged job seekers in compliance with relevant

European Commission regulations, - Extension of competencies of public employment services focused on accelerating the

turnover in the registration of job seekers,

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- Improving the quality of employment services provided by non-governmental recruitment services providers for payment, temporary employment services and supported employment services,

- Activation of partnerships at regional and local level formed to resolve regional employment problems in particular on the basis of projects and programmes,

- Engagement of towns, communities and establishment of associations to resolve the unemployment of their citizens,

- More precise targeting of active labour market measures to disadvantaged groups of job seekers,

- Disconnection of active labour market measures from the reference value of minimal wage and connection to the average monthly nominal wage of an employee in the Slovak Republic’s economy,

- Definition of the National System of Professions, which is to serve as a starting point for the scope and structure of professional preparation according to employers' requirements. It is a basic framework system for the creation of the National System of Qualifications. This is due to the urgent need to map requirements for professional skills and practical experience necessary for performance of implementation of work in jobs.

At the beginning of 2009, the Ministry of Labour, Social Affairs and Family of SR reacted to the negative trends on the labour market through draft measures to alleviate the impacts of the global financial crisis and economic crisis on employment that focused on supporting the retention of jobs and the creation of new jobs through active labour market measures. These are mainly the following measures focused on: - Supporting the creation and retention of social enterprises, with emphasis on the

creation of communal social enterprises, - Supporting the employee retention with employers dealing with the consequences of the

global economic crisis, - Supporting motivation when searching for and accepting a job, - More intensive inter-regional labour mobility, - Supporting the domestic agricultural product processors and retailers, - Creating more favourable conditions for self-employment, - Supporting the creation of new jobs. - The above measures were legislatively modified in the Act No. 49/2009 Coll., which

amends Act No. 5/2004 Coll. on Employment Services as amended, and which amends Act No. 311/2001 Coll. the Labour Code as amended taking effect from 1 March 2009.

- Act No. 108/2009 Coll., which amends Act No. 461/2003 Coll. on Social Insurance as

amended took effect from 1 April 2009; this Act also reacted to the worsening of the economic situation due to consequences of the global economic crisis, which also impacted the self-employed and the development of local and regional employment. This act has created a legal framework for:

- Improved and more efficient performance or operation of self-employment activities,

including the operation or performance of self-employment activities in protected workshops or in protected workplaces,

- Lower administrative and financial demands in relation to granting benefits to cover operating costs in a protected workshop or protected workplace and to cover employee transport costs,

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- Introducing more favourable legislative conditions for establishing social enterprises during a transitional period (by the end of 2010).

- Act No. 266/2009 Coll., which amends Act No. 528/2008 Coll. on Aid and Support

granted from EC funds and which amends Act No. 5/2004 Coll. on Employment Services as amended and which took effect on 7 July 2009, resolves the situation in protected workshops and protected workplaces, which, due to the global financial crisis, found themselves in a bad financial situation. The goal of the amended Employment Services Act was to avoid financial problems in these workshops and workplaces and to support the retention of jobs for citizens with disabilities. The act adopted:

- Conditions for regular (quarterly) benefits to cover operating costs at a protected

workshop or protected workplace and to cover employee transport costs; - A modified the scope of operating costs paid to a citizen with disabilities who operates

or performs self-employment activities in terms of the advance health insurance, social insurance and the old-age pension savings contributions paid by a self-employed person who is a person with disabilities.

C.11.15 Social inclusion - Numerous legislative amendments were made in the field of social inclusion and social

protection within the monitored period. Below is an overview of the revised legislation: - Act No. 529/2006 Coll., which amends Act No. 461/2003 Coll. on Social Insurance as

amended - Act No. 592/2006 Coll. on the Granting of Christmas Contribution to Some Pensioners

as amended - Act No. 674/2006 Coll., which amends Act No. 195/1998 Coll. on Social Aid as

amended - Act No. 675/2006 Coll., which amends Act No. 599/2003 Coll. on the Assistance in

Material Distress as amended - Act No. 676/2006 Coll., which amends Act No. 235/1998 Coll., on Child Birth

Contribution, Contribution to Parents who Simultaneously Give Birth to Three or More Children or Who Repeatedly Give Birth to Twins Within Two Years as amended

- Act No. 677/2006 Coll., which amends Act No. 43/2004 Coll. on Old-Age Pension Savings as amended and which amends Act No. 461/2003 Coll. on Social Insurance as amended

- Act No. 532/2007 Coll., which amends Act No. 600/2003 Coll. on the Child Contributions, Act No. 461/2003 Coll. on Social Insurance and Act No. 599/2003 Coll. on Assistance in Material Distress as amended

- Act No. 555/2007 Coll., which amends Act No. 461/2003 Coll. on Social Insurance as amended

- Act No. 592/2007 Coll., which amends and supplements the Act No. 235/1998 Coll. on the Child Birth Contribution, Contribution to Parents who Simultaneously Born Three Children or More Children or Who Repeatedly Born Twins Within Two Years and which amends further acts as amended

- Act No. 62/2008 Coll., which supplements the Act No. 43/2004 Coll. on the Old-Age Pension Savings and on Amendment and Supplementation of Some Acts as amended

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- Act No. 201/2008 Coll. on Maintenance Payments and on Amendment and Supplementation of the Act No. 36/2005 Coll. on Family and on Amendment and Supplementation of Some Acts as amended as amended by Slovak Constitutional Court Ruling No. 615/2006 Coll.

- Act No. 434/2008 Coll., which supplements the Act No. 43/2004 Coll. on Old-Age Pension Savings and on Amendment and Supplementation of Some Acts as amended and which supplements the Act No. 461/2003 Coll. on Social Insurance as amended

- Act No. 447/2008 Coll. on Monetary Contributions To Offset Sever Disability and on Amendment and Supplementation of Some Acts

- Act No. 448/2008 Coll. on Social Services and on Amendment and Supplementation of the Act No. 455/1991 Coll. on Small Businesses (the Trade Act) as amended

- Act No. 449/2008 Coll., which amends and supplements the Act No. 461/2003 Coll. on Social Insurance as amended and on Amendment and Supplementation of Some Acts

- Act No. 466/2008 Coll., which amends and supplements the Act No. 305/2005 Coll. on Social Protection of Children and on Social Guardianship and on Amendment and Supplementation of Some Acts as amended

- Act No. 554/2008 Coll., which amends and supplements the Act No. 235/1998 Coll. on the Child Birth Contribution, Contribution to Parents who Simultaneously Born Three Children or More Children or Who Repeatedly Born Twins Within Two Years and which amends other acts as amended, and which amends and supplements some acts

- Act No. 561/2008 Coll. on the Child Care Contribution and on Amendment and Supplementation of Some Acts

- Act No. 562/2008 Coll., which amends and supplements the Act No. 599/2003 Coll. on Assistance in Material Distress and on Amendment and Supplementation of Some Acts as amended, and which amends and supplements the Act No. 5/2004 Coll. on Employment Services and on Amendment and Supplementation of Some Acts as amended

- Act No. 108/2009 Coll., which amends and supplements the Act No. 461/2003 Coll. on Social Insurance as amended and on Amendment and Supplementation of Some Acts

- Act No. 137/2009 Coll., which amends and supplements the Act No. 43/2004 Coll. on the Old-Age Pension Savings and on Amendment and Supplementation of Some Acts as amended

- Slovak Government Decree No. 486/2006 Coll., which governs the amount of the benefit in material distress, health care allowance, activation allowance, housing allowance and protective allowance

- Slovak Government Decree No. 377/2007 Coll., which governs the amounts of the benefit in material distress and housing allowance

- Slovak Government Decree No. 393/2007 Coll. on the Increase of the Amount of Funeral Allowance

- Slovak Government Decree No. 394/2007 Coll. on the Increase of the Childbirth Allowance and on the Increase of the Allowance for Parents who Simultaneously Born Three Children or More Children or Who Repeatedly Born Twins or More Children Simultaneously

- Slovak Government Decree No. 489/2007 Coll. on 2007 Christmas Allowance amounts - Slovak Government Decree No. 336/2008 Coll., which amends material distress and

housing allowance benefit amounts - Slovak Government Decree No. 413/2008 Coll. on 2008 Christmas Allowance amounts - Slovak Government Decree No. 234/2009 Coll., which amends material distress and

housing allowance benefit amounts - Slovak Government Decree No. 409/2009 Coll. on 2009 Christmas Allowance amounts

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- Ministry of Labour, Social Affairs and Family Decree No. 643/2008 Coll., which executes some provisions of Act No. 305/2005 Coll. on Social-Legal Protection of Children and Social Guardianship as amended

- Ministry of Labour, Social Affairs and Family Ordinance No. 29775/2007-ll/1 dated 5 December 2007 on Granting Subsidies within the Scope of the Ministry of Labour, Social Affairs and Family (Notice No. 597/2007 Coll.)

- Ministry of Labour, Social Affairs and Family Ordinance No. 23609/2008-II/1 dated 26 December 2008, which amends Ministry of Labour, Social Affairs and Family Ordinance No. 29775/2007-II/1 dated 5 December 2007 on Granting Subsidies within the Scope of the Ministry of Labour, Social Affairs and Family (Notice No. 546/2008 Coll.)

C.12. Contribution of Operational Programmes to Cohesion Policy in relation to the European Economic Recovery Plan This part has been developed according to Appendix IV of the Indicative Structure for National Strategic Reports 2009 1. Financing: 1. a. Are advances made under Cohesion Policy (2007-2009) being used to pre-finance

operations on the ground? To public authorities? To enterprises or other economic operators?

The Ministry of Finance, under Slovak Government Resolution No. 457 dated 17 May 2006, performs the tasks of the Certification Body for all OPs within the Convergence Goal and the Regional Competitiveness and Employment Goal. Within the above competence, it directs Structural Fund and Cohesion Fund financial management for the 2007–2013 programming period and Structural Fund and Cohesion Fund financing strategy for the 2007–2013 programming period . In the 2007–2013 programming period the Slovak Republic received advances from the European Commission in the amount of € 1,080,936,874. As of 30 September 2009, drawing on funds from paid advances total € 184,366,870, which accounts for 17.06 % of the advances paid. The above volume of funds drawn from advances provided by the European Commission follows the level of contracting, implementation of individual projects and submission of applicants for payment by beneficiaries. These factors influence the level of the drawing on commitments of the OPs independently from changes made within the financial management system. The Ministry of Finance identified the following possibilities within the application of the financial management system including an advance payment paid to the Certification Body's extra-budgetary accounts: - Enlargement of the number of eligible beneficiaries for the advance payment and pre-

financing system, - Simplification of conditions for granting/accounting for advance payments within

enlargement of eligible beneficiaries for the advance payments system. In connection to the Analysis of Potential Modifications to the Structural Fund and Cohesion Fund Financial Management System for the Programming Period 2007–2013 dated March 2009, the Ministry of Finance updated, in the form of a supplement, the Structural Fund and

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the Cohesion Fund Financial Management System for the Programming period 2007–2013 , to Version 4.1 effective from 30 April 2009. The application of this change has created space for using advance payments paid by the European Commission to the Certification Body's off-budgetary accounts in a more flexible way as all beneficiaries can draw on funds through advance payments/pre-financing, which positively influences the smooth drawing of Structural Fund and the Cohesion Fund money. At the same time, beneficiaries do not have to look for other resources to finance their project activities. Due to the fact that the Slovak Republic applies a national system of advance payments, there is no recognition of advance payments as allowed by Article 78 of the Council (EC) Regulation No. 1083/2006. Within the statement of expenditures, only expenditures accounted for by beneficiaries are declared to the European Commission. Depending on the connection of expenditures for Structural Fund and the Cohesion Fund resources to the state budget and the situation between individual resources stipulated in the Structural Fund and the Cohesion Fund Financing Strategy for the Programming Period 2007–2013 , the Slovak Republic does not make use of flexibility within the engagement of Structural Fund and the Cohesion Fund resources in relation to the declaration of expenditures to the European Commission. 1. b. Is expenditure incurred on major projects being declared while submissions to the Commission are pending In connection with the possibility to declare the expenditures of major projects to the European Commission before the European Commission provides a decision on the relevant major project, the Slovak Republic amended Act No. 528/2008 Coll. on the Aid and Support from the EC Funds through Act No. 266/2009 Coll. taking effect on 7 July 2009. Within this amendment, the Managing Authority of the Transport OP made it possible to enter into contracts for non-returnable financial aid before a major project is approved by the European Commission. Subsequently, under the Structural Fund and the Cohesion Fund Financial Management System for the Programming Period 2007–2013 these expenditures can be declared to the European Commission within regular applications for payment. The Act went into force on 1 July 2009. The above amendment was also reflected in the Structural Fund and the Cohesion Fund Financial Management System for the Programming Period 2007–2013 , version 5.0. Making payments before the approval of a major project by the European Commission and the issuance of a decision is applied only within the Transport OP. The Ministry of Transport, Post and Telecommunications within the Transport OP, submitted five major projects to the European Commission by 30 September 2009 (see Table No. 21), of which the following two projects were approved: “Modernization of the Žilina - Krásno nad Kysucou Railway Track” and “D1 Sverepec – Vrtižer Highway”. Other projects have not been approved by the European Commission as of yet; however, funds for the implementation of these projects are already being drawn. Table No. 21 Major projects Project name Total amount of

eligible expenditures in

€ (EU+State

Budget+Internal

Sources)

Total amount of

expenditures

exceeding the

financial gap in

EUR

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Modernization of the Žilina- Krásno nad Kysucou Railway Track*

101 032 193.00 EUR 57 345 336.00 EUR

Žilina - Teplička, a siding station 52 308 334.00 EUR 87 426 491.00 EUR D1 Sverepec – Vrtižer Highway*

263 473 152.00 EUR 78 842 705.00 EUR

R1 Žarnovica - Šášovské Podhradie Express Road

130 612 039.00 EUR 49 570 755.00 EUR

The purchase of railway track vehicles

176 317 475.00 EUR 703 659.00 EUR

* approved projects Source: Ministry of Transport, Post and Telecommunications documentation 1. c. Are advances under state aid schemes to SMEs paid and declared to the Commission for reimbursement? OP Managing Authorities did not apply advances within the state aid scheme declared to the Commission as refunds. 1. d. Is frontloading of planned investment over the Period 2007-2013 being implemented? The determination of costs of planned investments in the initial phase is applied within the Transport OP. The financial intensity of a project has been defined since the origin of the investment project. The accuracy and details of the setting of the price of the work is related to the level of knowledge and the level of the documentation developed. Within the preparation phase of the Transport OP, during the preparation of a list of projects, all the highest developed levels of documentation were used to determine financial security necessary within the Transport OP. The Ministry of Transportation, Post and Telecommunications within the management of the Transport OP is bound by the Act No. 254/1998 Coll. on Public Works as amended and by Ministry of Transportation, Post and Telecommunications Methodology Guideline No. 18/2007 dated 9 May 2007 for the performance of sector expertise. This is the procedure by which the Ministry of Transportation, Post and Telecommunications implemented the cost evaluation of the Transport OP's preparation phase and is connected to the amount of financial costs, the level of documentation and the scope of documentation. Project cost evaluations for projects exceeding € 6,638,000 are performed by the Ministry of the Construction and Regional Development through state experts. The Ministry of Transportation, Post and Telecommunications submits a building project to the Ministry of the Construction and Regional Development for the performance of such state expertise. The Ministry of the Construction and Regional Development, after evaluation of the building project, will issue a state expertise protocol which includes the maximum recommended price of the work.

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Project cost evaluations for projects exceeding € 1,327,000 are performed through sector analysis depending on the level of the documentation prepared. Sector expertise includes a technical-economic study, a building project, planning permission documentation, building permit documentation, construction implementation documentation and bid documentation. As to the evaluation through sector expertise, a database of Ministry of Transportation, Post and Telecommunications Intra-Sector Expertise Department indicators is used. These indicators are derived from prices of items determined on the basis of completed construction and work in connection to conducted tenders. The results of evaluations carried out by a sector expertise are binding for the organization in charge of the public procurement. The determination of project investment costs in the initial phase within the 2007–2013 programming period relates to all projects included in the list of Transport OP projects. An indicative list of the Transport OP projects, as a part of the Transport OP proposal for 2007–2013 , was approved by Slovak Government Resolution No. 1007 dated 6 December 2006. The Slovak Government took into account an “updated list of Transport OP projects for 2007–2013 ” as information at its meeting on 4 November 2009; the duty to submit this updated list arises from the Slovak Government Resolution No. 882 dated 3 December 2008. A list of major projects is included in Part 9 (C.10) of the strategic report. A list of small Transport OP projects is included in Table No. 22 and Table No. 23. Table No. 22 Priority Axis 1 – Railway infrastructure

No. Project name

1.

Project documentation, Liptovský Mikuláš – Košice tack - Liptovský Mikuláš – Poprad track* - Poprad – Krompachy track* - Krompachy – Kysak track* - Kysak – Košice track*

2. Electrification of Devínska Nová Ves – Marchegg track*

* Small projects (investment costs below € 50 mil.)

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Table No. 23 Priority Axis 5 – Road infrastructure (express roads and 1st class roads)

No. Project name

1. I/75 Galanta, by-pass road (2nd phase)*

2. I/67 Poprad - Kežmarok, 1st phase*

3. Elimination of unsuitable technical parameters on 1st class roads *

4. R1 Nitra – Selenec feeder road*

5. Express road project documentation *

6. The 1st class roads project documentation *

7. I/11 Čadca – road shifting*

8. I/59 Dolný Kubín, slow vehicles lane*

9. I/68 Mníšek nad Popradom - the Slovak/Polish state border*

10. Zvolen - Neresnica, elevated crossing*

* Small projects (investment costs below 50 mil.) 1. e. Is the use of flexibility in the existing programmes to modulate the rate of the EU contribution to projects (up to 100% of the eligible costs) being used? Not applicable 2. Simplification of eligible expenditures categories: Did the RO/SORO or are they planning to apply the following categories of expenditures: 2. a. Indirect costs declared on a flat-rate basis? 2. b. Flat-rate costs calculated by application of standard scales of unit cost? 2. c. Lump sums to cover all or part of the costs of an operation? The application of simplified expenditure reporting as one of important instruments of a quick and transparent drawing on the EU funds is one of the European Commission's and Central Coordination Authority's main priorities. The goal of the application of this instrument is to reduce the administrative burden on employees at individual Managing Authorities in order to provide for the effective implementation of relevant OPs. Some Managing Authorities showed, in advance, their interest in applying the principles of simplified expenditure reporting and Central Coordination Authority's support within the preparation of methodology. The principles of simplified expenditure reporting under Slovak conditions are interesting especially for Managing Authorities, which implement the OPs within the European Social Fund. The Slovak Republic has decided to make use of this possibility provided by the Commission and to apply simplified expenditure reporting within the European Regional Development Fund. This initiative has met with a positive reaction from some Managing Authorities that implement the European Regional Development Fund.

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On 31 July 2009, the Central Coordination Authority issued Methodological Guideline No. 7 for simplified expenditure reporting in the 2007–2013 programming period . The guideline defines individual rules, which, within the application of simplified expenditure reporting, the Managing Authorities and subsequently (based on a contract granting non-returnable financial aid or a decision to approve an application for non-returnable financial aid) the beneficiaries are obliged to apply within the implementation of their projects. The reason for the development of the Central Coordination Authority's methodological guideline mainly consisted in the following eight primary aspects: - Introduction of EC legislation framework changes and European Commission impulses in Cohesion Policy – issuance of the European Commission's working document in relation to simplified reporting of eligible expenditures. - Central Coordination Authority efforts to demonstrability simplify the system for eligible expenditures (from beneficiaries' point of view), and simultaneously to make Managing Authority verification simpler and more effective, which will contribute to more effective and smoother implementation of the OPs, - Identification of possibilities to fully eliminate eligibility restrictions for expenditures in the calls for the submission of applications for non-returnable financial aid, - Elimination of potential negative impacts of reporting eligible expenditures based on “real costs” with regard to the complexity, quality, feasibility and sustainability of projects and to narrow the space for human error, - Efforts to increase attractiveness of applicants to implement projects through EU fund co-financing (the European Regional Development Fund and the European Social Fund), - Need to accelerate, simplify and improve processes and procedures of the implementation of OPs and NSRF horizontal priorities, - Decreasing the administrative burden on employees at individual Managing Authorities, - Adopting an effective economic and procedural instrument which will contribute to the alleviation of impacts of the economic and financial crisis. According to the above methodological guideline, the simplified reporting system includes the following forms: Indirect expenditures reported in the form of a lump sum – this method is applied only to eligible indirect project expenditures within operations/projects co-financed from the European Social Fund and the European Regional Development Fund. The amount of the lump sum is set by the Managing Authority in relation to the nature of an OP. The amount of direct expenditures creates the basis for calculating the lump rate. Standard scale of individual expenditures – this method is applied to both eligible direct and indirect project expenditures within operations/projects co-financed from the European Social Fund and the European Regional Development Fund. The Managing Authority can choose from two models of scales, a process-oriented scale and a result-oriented scale, depending on the nature of operations/projects within a given call. It is in the Managing Authority's competency to decide to which activity within the call the applicants can apply the standard scale for individual expenditures. Lump sum – this method is applied to both eligible direct and indirect project expenditures within operations/projects co-financed from the European Social Fund and the European Regional Development Fund. The Managing Authority will determine, using a lump sum, the amount of eligible expenditures for a completed project/activity. The lump sum is result-

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oriented. The payment of the sum is conditioned by reaching the planned objective. This method of expenditure reporting is suitable mainly for the European Social Fund's low-budget projects. Simplification of measures for reporting eligible expenditure for projects co-financed from the EU's Structural Fund, adopted by the Slovak Republic, represent an appropriate instrument for more effective implementation of OPs. Proposed measures are summarized in the Central Coordination Authority's Methodological Guideline No.7 of 2009 and they are primarily relevant for Managing Authorities and subsequently for beneficiaries. However, the real application of the whole simplification of eligible expenditure reporting in the Slovak Republic is currently limited by the absence of a final document approved by the European Commission in relation to this issue. Not only is the application of basic frameworks and principles for the use of benefits of simplified reporting of eligible expenditures an open issue, but also the same can be said for the issue of (non)connection of public procurement to the real use of options brought by the lump sum methodology as to the reporting of eligible expenditures. If, on the basis of the European Commission's final document, it is only possible to use the lump sum for projects co-financed from EU funds (the European Regional Development Fund and the European Social Fund) within which no public procurement was applied, the real use of the lump sum in the Slovak Republic, according to the present experience of some managing authorities, will be almost impossible. The main reason is the missing ability to combine lump sum reporting with the “real cost” principle within one project/call, which would mean a missed opportunity to apply indirect expenditures to the parts of a project that are subject to public procurement. This should result in a disadvantage for some beneficiaries or underinvestment in a project. Correctly applied measures to simplify eligible expenditures reporting have a big potential to contribute to the simplified and more effective implementation of the NSRF Operational Programmes and to create the necessary impetus to accelerate and lead to more effective drawing of the Structural Fund and the Cohesion Fund, which would alleviate the impacts of the economic crisis. The simplified expenditure reporting system through the above-mentioned forms is also included in the updated Structural Fund and the Cohesion Fund Financial Management System for programming period 2007–2013 version 5.0 taking effect from 7 November 2009 in the scope of the Ministry of Finance. At present, no Managing Authority applies any of the eligible expenditure reporting forms. 3. Enlarging or adjusting the priorities of OPs 3. a. What measures under the four priority areas outlined in the Communication (people, business, infrastructure and energy; research and innovation) are being accelerated or adjusted? Are other adjustments necessary to the initially planned measures in order to meet new or different needs? What is the likely impact of these actions? Higher numbers of beneficiaries than anticipated? New needs identified? Within the Competitiveness and Economic Growth OP, the following measures have been adopted in connection with Paragraph 3a: 1) Application of a “Scheme for Temporarily Granting Small Aid in the Slovak Republic during the Financial and Economic Crisis”, i.e. an aid increase up to € 500,000,

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2) Relocation within Priority Axis 1 of the Competitiveness and Economic Growth OP “Innovations and the Growth of Competitiveness” for more effective drawing of funds, 3) Submission of materials titled the “Recovery Concept for the Slovak Republic's Economic Growth Including Financial Instruments and a Timeframe for Economic Growth Recovery”. 3. b. Are OPs being amended to open the scope of actions to energy efficiency and renewable energies in housing? If yes, what amount has been (will be) allocated to these measures? What kinds of operations are concerned? The Slovak Republic does not apply this option. 3. c. Are JEREMIE-type accesses to finance instruments to benefit SMEs being accelerated or expanded? What is the expected total financial volume? And the EU co-financing? At present we speak of a growing trend for MSP aid financing via the finance instruments because this is a pilot project in Slovakia. The JEREMIE initiative (see Chart No. 10) is perceived as an instrument against the financial crisis in periods in which is a problem for an MSP to get to financial liquidity. On 23 December 2008, the Slovak Republic and the EIF entered into a Framework Contract to Implement a JEREMIE Initiative. The implementation of a JEREMIE initiative will continue according to JEREMIE initiative implementation in the Slovak Republic in the 2009 action plan developed by the Ministry of Finance. On 21 March 2009, a new limited liability company – Slovenský záručný a rozvojový fond, s.r.o. (SZRF, s.r.o. – Slovak Guarantee and Development Fund, Ltd.) was recorded in the Commercial Register. This new company, together with the EIF, will make up a holding fund, through which the finance instruments within the JEREMIE initiative in Slovakia will be implemented. Chart No. 10

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JEREMIE v SR (Upravené alokácie spolufinancovania podľa UzV č. 752/2009)

OP Životné prostredie 27000000 4764706

OP Výskum a vývoj 25000000 4411765

OP Bratislavský kraj 3000000 529 412

OP Konkurencieschopnosť ahospodársky rast

30000000 5294118

ERDF ŠR

JEREMIE v SR – JEREMIE IN THE SLOVAK REPUBLIC, Upravené alokácie... – Adjusted allocations of co-financing according to the UzV No. 752/2009, OP Životné prostredie – Environment OP, OP ýskum a vývoj – Research and Development OP, OP Bratislavský kraj – Bratislava Region OP, OP Konkurencieschopnosť...- Competitiveness and Economic Growth OP, ŠR – State Budget

On 21 October 2009, Slovak Government Resolution No. 752, approved the “Proposal for a Re-Allocation of Funds from the Information Society OP into the Competitiveness and Economic Growth OP and Changes of the Environment OP in Connection with the JEREMIE Initiative Implementation and a Proposal for Appendix No. 1 to the Framework Contract of Implementation of the JEREMIE Initiative in the Slovak Republic between the Slovak Republic and the EIF”. Based on this proposal, the allocations for co-financing the JEREMIE initiative from individual Operational Programmes will be arranged as follows: Table No. 24 in EUR

Operational Programme

European Regional Development Fund

National co-financing Total allocation

Competitiveness and Economic Growth OP 30 000 000 5 294 118 35 294 118 Bratislava Region OP 3 000 000 529 412 3 529 412 Research and Development OP 25 000 000 4 411 765 29 411 765 Environment OP 27 000 000 4 764 705 31 764 705 Total 85 000 000 15 000 000 100 000 000

On 28 October 2009, financing contracts were concluded between the EIF, the Ministry of Economics, the Ministry of the Education and the Ministry of Construction and Regional Development in the volume of € 68 mil. Simultaneously, three applications for payment were signed. The payments will be paid to an EIF transit account not later than 1 January 2010. The fourth contract, which will increase the total allocation of the JEREMIE holding fund to € 100 mil., will be concluded not later than March 2010. At the moment, the Slovak Republic is

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conducting negotiations with the EIF about the establishment deed (articles of partnership, social contract and a board of investment statute) and a holding fund contract which will enable the EIF to enter the holding fund structure. These contracts are to be concluded by the end of 2009. The active phase of JEREMIE initiative implementation will start early in 2010 after approval of the investment strategy. In connection with the costs of managing the JEREMIE holding fund in the Slovak Republic, currently there are negotiations are underway with the EIF about the possibility of lump-sum remuneration, i.e. “flat rate”, for the performance of the holding fund activities in connection with the finance operations. The amount of the lump-sum remuneration is being negotiated in compliance with Council Regulation No. 1083/2006, Article 44c) and Council Regulation No. 1828/2006, Article 43, Paragraph 4. The Central Coordination Authority, within methodological guidelines of the managing authorities participating in the JEREMIE initiative in the Slovak Republic, issued Central Coordination Authority Guideline No. 6 – Methodological Instruction to the Implementation of OPs through the JEREMIE Initiative, which governs procedures and sequence of steps within the JEREMIE implementation in the Slovak Republic. The Central Coordination Authority also actively cooperates with Managing Authorities and, if necessary, directs and updates methodological guidelines. 3. d. Have capacity building priorities to reinforce within public authorities their ability to plan, implement, monitor and control OPs been modified or reinforced? The total number of administrative capacities of entities participating in the implementation of the OP NSRF represented 1,828 employees as of 30 October 2009. It is necessary to add another 288 employees. The total fulfilment of the planned state of administrative capacities reached 86.39 %. The fulfilment of the planned state administrative capacities within individual sectors ranged from 53.33 % (Ministry of Culture) to 100 % (the Office for Public Procurement). When comparing state administrative capacities in individual bodies, and also with regard to further development, it is necessary to take into account several factors which influence their total structure. These factors consists of the amount of funds allocated for Operational Programme, differences in the implementation of the European Social Fund, the European Regional Development Fund and the Cohesion Fund, the parallel implementation of two programming period s and also experience with the implementation of funds within the programming period 2004 – 2006. 4. Simplifying the implementation mechanisms 4. a. What national measures have been taken to accelerate the implementation of OPs? Clarifying procedures? Revised guidance or national legislation? Simplified procedures? The Central Coordination Authority The Central Coordination Authority at the national level has implemented specific measures with the potential to contribute to the acceleration, effectiveness and simplification of implementation of the OP NSRF while adhering to the principles of transparency and good financial management. In addition, the Central Coordination Authority, based on analysis of identified weaknesses and problematic areas of OP implementation from a procedural set-up and management point

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of view, proposed a set of measures that represent the potential for higher effectiveness and quality of the management system of individual OPs. These measures were reflected in the updated version of the Structural Fund and the Cohesion Fund Management System for the 2007–2013 programming period taking effect from 23 September 2009, and also in a draft of the amendment to Act No. 528/2008 on Aid and Support Granted from the EC Funds, which is being prepared, with expected effectiveness as of 1 March 2010. The main measures implemented at the national level that contribute to the acceleration, effectiveness and simplification of the implementation of the OP NSRF are as follows:

1. Acceleration of the preparation and implementation of major projects

In connection to the possibility arising from Article 4c) of Council (EC) Regulation No. 284/2009, Act No. 266/2009 Coll. taking effect from 7 July 2009, was adopted. This act amends Act No. 528/2008 Coll. on Aid and Support Granted from EC Funds. The harmonization of the text of the valid Act on Aid and Support with provisions of EC Council's general regulation enabled Managing Authorities to grant aid from EC funds in order to implement major projects before European Commission aid is approved and to enter into a contract granting non-returnable financial aid before approval of such aid. The Central Coordination Authority reflected this option in its updated Structural Fund and the Cohesion Fund Management System for the 2007–2013 programming period , version 3.1 taking effect from 23 September 2009, which simultaneously defines the basic principles of making use of this option.

2. Greater support for small and medium-sized enterprises

The instruments for increasing support for small and medium-sized enterprises from the Structural Fund and the Cohesion Fund, implemented at the national level, are as follows: Accelerated performance of provisions related to finance products for small and medium-sized enterprises within the JEREMIE initiative – on 28 February 2009, the Central Coordination Authority issued a methodological guideline to implement a part of OPs through the JEREMIE initiative, which defines the management aspects of this finance instrument, through which, under conditions in the Slovak Republic, it created a methodological basis for the implementation of this Community initiative. Make use of the option of the Community Temporary Framework for the measures of state aid to support access to financing in the period of the present financial and economic crisis, which gives the Managing Authorities instructions how to help enterprises and jobs in the real economy without inadequate distortion of competition. Under conditions in the Slovak Republic, this framework was adapted through a Scheme for Temporarily Granting Small Aid in the Slovak Republic during the Financial and Economic Crisis as issued by the Ministry of Finance. Aid providers can provide small amounts of aid according to this scheme without notifying the Commission of the measures in advance provided that the conditions stated in this scheme are followed.

3. The implementation of the option of a simplified reporting of expenditures

The option to report indirect (overhead) expenditures based on a flat rate was implanted in the Slovak Republic through the Structural Fund and the Cohesion Fund Management System for the 2007–2013 programming period from the start of the programming period . The above

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option, under Article 11, Paragraph 3b) of European Parliament and Council (EC) Regulation No. 1081/2006, applies exclusively to projects co-financed from the European Social Fund, where it is possible to recognize indirect costs on a flat rate basis (without beneficiaries having to submit supporting documents) up to 20 % of a project's direct costs. In connection to the issuance of (EC) Regulations No. 284/2009, 396/2009 and 397/2009, the essence of which is to extend the options of reporting by two new methods (lump sums and standard scale of units) and to extend their application to projects co-financed from the European Regional Development Fund, the Central Coordination Authority issued, on 31 July 2009, Central Coordination Authority Guideline No. 7 as to simplified reporting of expenditures in the 2007–2013 programming period , which represents a basic methodological framework for the implementation of the above simplifications into the OP NSRF. CERTIFICATION BODY In connection to measures for accelerated implementation of OPs in the field of legislation, including amending methodological regulations and guidelines for the period monitored, the Certification Body issued or cooperated in the preparation of the following documents: - Act No. 528/2008 Coll. on Aid and Support Granted from EC Funds as amended by Act No. 266/2009 Coll. and an amendment to the act above that is under preparation, - Structural Fund and the Cohesion Fund Financial Management System for the 2007 - 2013 programming period , updated versions, - Directive No. 10/2007-U to the basic set-up of the ISUF and to the procedure of accounting for paying units for the 2007 - 2013 programming period , - Directive No. 12/2007-U to the codebook of the programming structure of OPs of Structural Fund and the Cohesion Fund for the 2007–2013 programming period (version 4.0), - Directive No. 13/2008-U to the paying unit's receipt account for the programming period 2004 - 2006 and the 2007–2013 programming period , - Directive No. 15/2008-U to the procedure of financing Structural Fund, Cohesion Fund and European Fisheries Fund projects in connection with the end of the 2008 budgetary year and the introduction of the Euro in the Slovak Republic within the 2004 – 2006 programming period and the 2007–2013 programming period (version 1/2009), - Directive No. 16/2008-U to discrepancies financial management of the Structural Fund, Cohesion Fund and the European Fisheries Fund, - Directive No. 18/2008-U to the year-end financial statement procedures and to Euro-conversion for the ISUF users. Changes implemented into the management and controlling system of EU financial assistance instruments through updated versions of the above mentioned acts of the Central Coordination Authority and the Certification Body were reflected by relevant Managing Authorities of the OPs in their internal procedure manuals. In connection to these updates, the process of

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approving applications for non-returnable financial aid were supplemented by a phase in which decisions and corrective measures against decisions were issued within the Competitiveness and Economic Growth OP, in connection with the adoption of Act No. 528/2008 Coll. on Aid and Support Granted from EC Funds as amended. This resulted in a more detailed procedure related to such applications. 4. b. Is it necessary to simplify provisions in the adopted programmes through formal modification to speed up deliver mechanisms? The Slovak Republic has not identified the need to modify OPs in connection with the implementation of measures adopted in order to improve and simplify the implementation of these programmes. 5. The use of possibilities under the Temporary State Aid Framework: Is it planned to use Cohesion Policy funds to finance: 5. a. Schemes implementing the “Compatible limited amount of aid” up to € 500 000 following Commission state aid approval? In the Slovak Republic, this framework was applied through the Scheme for Temporarily Granting Small Aid in the Slovak Republic during the Financial and Economic Crisis issued by the Ministry of Finance. Aid providers can provide small amounts of aid according to this scheme without notifying the Commission of the measures in advance provided that the conditions stated in this scheme are followed. The increase in the maximum amount of de minimis aid was applied by the Ministry of Economics, as the Managing Authority for the Competitiveness and Economic Growth OP, and was used within 3 de minimis calls, within Sub-measure 1.1.1, Measure 1.3 and Measure 3.1 of the same OP. This exception will likely be not used for other calls. The de minimis scheme was applied within the Education OP. The EU SF Agency, as the Intermediary Agency to a Managing Body for the Education OP announced two calls in August 2009 for the submission of applications to grant non-returnable financial aid (Education OP-2009/2.1/01-SORO and Education OP-2009/4.2/02-SOManaging Authority) within Measures 2.1 and 4.2 of the Education OP whereby it applied conditions of the Scheme for Supporting the Development of Modern Education for a Knowledge-Based Society, in Appendix 1 (the de minimis aid scheme), issued by the Ministry of the Education and the Scheme for Temporarily Granting Small Aid in the Slovak Republic During the Financial and Economic Crisis of the Ministry of Finance. Calls entitled “Support for Further Education in Selected Sectors” focused on supporting education react to changing employer requirements in terms of the quality of human resources and effectiveness of their management and simultaneously leading to the deepening and expanding of qualification in accordance with the labour market requirements. Eligible applicants, who could react to both calls, consisted of micro, small, mid-sized and large enterprises performing educational activities based on accreditation provided in accordance with valid legislation and the fulfilment of other conditions precisely defined in the text of the call. Applicants could target their projects, submitted within these calls, on increasing the quality of educational programmes and also on strengthening the system of controlling their quality. The goal of project activities is to deepen and expand qualification, professional qualifications and development of key competencies. The calls put emphasis on the

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acquisition of knowledge and skills in connection with innovation processes, new technologies and their use in practice within the construction, textile, electrical, engineering and chemical sectors. The projected volume of funds allocated for the implementation of the above scheme total € 8 mil. Accepted applications for non-returnable financial aid within these calls are in the approval process, which is to be finished at the end of 2009. 5. b. State guarantees for loans at a reduced premium? 5. c. Loans interest subsidies, in particular for the production of green products (meeting environmental protection standards early or going beyond such standards)? The Slovak Republic does not apply these measures. 6. Public procurement Is the use of accelerated public procurement procedures, reducing the overall time limit of the procedure from 87 days to 30 days, being used under the OPs? In relation to the implementation of OPs, no accelerated public procurement procedures are being used in the Slovak Republic.

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D.13 Good practice examples Example No.1 “Rainbow over the Blue Hill” project, ITMS code 11230100484

Country: Slovak Republic Region: Spišská Nová Ves Operation, scheme, policy: Human Resources Sector Operational Program Duration: 19 Sept. 2005 – 30 Sept. 2008 Objective: Convergence/ Competitiveness / ETC Funding: Total Cost : € 151 819.18

EÚ contribution : € 113 864.39 National € 30 363.84 Regional € 7 590.95 Private € 0.00

Contact : Name: Ing. Vladimír Jančík, Director Organisation: Stredná odborná škola (Secondary Vocational School), Filinského 7 Address: Filinského 7, 052 01 Spišská Nová Ves Email: spsd@spsdsn.edu.sk Internet: –

Operation / policy description:

Overall objectives – description of activities – beneficiaries – expected impact (or actual results) To transform vocational training at the Stredná priemyselná škola drevárska (Secondary Wood Industry Vocational School) focusing on current labour market requirements and subsequently to increase their employment mainly in a form of self-employment. To develop a system of permanent information for SPŠD students: - On the labour market applied to their field of study and major, - On the current situation in the field of professional preparation and

education, i.e. in the wood and furniture industry through a project activity coordination centre and information databases by means of a system of regularly updated topical plans.

To improve student practical knowledge and skills focusing on the labour environment through a method of training for current conditions in the wood-processing and furniture industry: - In terms of working procedures and relations between professions in

wood and furniture industry entities, - In terms of labour-legal relations - In terms of competition relations between business entities in the

market environment using modern digital technologies. To improve the ability to penetrate the labour market through verbal communication training, presentation skills, communication and marketing skills in the market environment and self-marketing of student skills. Students of the 1st to 4th year of education of the fields of study – 100

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Result: a developed system of permanent student information, improved practical knowledge and student skills focusing on a market environment through training as to current relationships between the wood-processing and furniture industry, improved ability to penetrate the labour market through training

Strategic Context:

Background information – link to challenge being addressed by operation /Policy Labour market needs and educational system outputs do not match

Operation / policy design/ implementation:

Design – management - monitoring – innovation or good practice elements Added value arises via cooperation between students in several fields of study, which usually cooperate in actual production practices and the training of personnel and technological connections arising from this cooperation.

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Example No. 2 An “Implementation of the Regional Market Requirements into Economic Education (focusing on the OA in the Slovak Republic)” project, ITMS code 11230100315

Country: Slovak Republic Region: Bratislava Operation, scheme, policy: Human Resources Sector Operational Programme Duration: 18 September 2006 – 30 November 2008 Objective: Convergence/ Competitiveness / ETC Funding: Total Cost : € 159 149.90

EÚ contribution : € 119 362.43 National € 31 829.98 Regional € 7 957.49 Private € 0.00

Contact : Name: prof. Ing. Rudolf Sivák, PhD. Organisation: Ekonomická univerzita v Bratislave (Economic University in Bratislava) Address: Dolnozemská cesta 1, 852 35 Bratislava Email: sivak@euba.sk Internet: –

Operation / policy description:

Overall objectives – description of activities – beneficiaries – expected impact (or actual results) The objectives of the project: Preparation of innovation proposals in the field of teaching documentation – syllabuses for technical economic subjects – with the participation of regional employers, Innovation of teaching texts, didactic and methodological aids for teachers and students – with the participation of regional employers, Providing innovated teaching texts, didactic and methodological aids for teachers and students through the Internet, Participation of regional employers in preparing content and completing teaching staff training, Innovation of the teaching process using information and communication technologies focused on team cooperation of students, solving economic issues and tasks, Innovation of the teaching process through cooperation between teachers and students with the university and regional enterprises, Inclusion of the self-study principles and methods into the teaching process in order to teach the students to learn, Implementation of a European dimension into the teaching of technical economic subjects, Cooperation between secondary and tertiary education institutions with emphasis on improvement of technical education and preparation – conferences, workshops and expert seminars, Create the preconditions for the development of a programme of two-level attestation of the teacher of technical economic subjects by providing the previous objectives Target groups: Teachers of technical economic subjects within the system of technical education and preparation of students at business colleges in the Slovak Republic (except the Bratislava Region) trained in the project - 167 Business colleges students in the Slovak Republic (except the Bratislava Region), who will be trained in the “Business College Graduate and Regional

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Labour Market” pilot project - 2708 Result: At the OA, there are 12 obligatory technical subjects (including practice) and 19 optional technical economic subjects – in total 31 subjects. Of this number syllabus innovation for 8 technical economic subjects was executed: corporate economics, accounting, management, marketing, trial company, applied informatics, tax system, insurance industry, i.e. (8/31) = 25.8%. Impact: The development of documentation for the transformation of long-term education syllabuses –technical economic subjects at business colleges

Strategic Context:

Background information – links to challenge being addressed by operations /Policy Labour market needs and educational system outputs do not match

Operation / policy design/ implementation:

Design – management - monitoring – innovation or good practice elements Selected and presented training topics at the Department of Education of the NHF EU in Bratislava were analysed, according to the questionnaire results, and prepared for immediate use within innovative education at the OA. Participants in the training obtained documentation and practical examples of how to activate students and to enrich the educational process. The sponsors of individual technical subjects tried to provide OA teachers with a sufficient quantity of material for implementing innovative education itself (notices, worksheets, CD – yearbooks of final works, websites, recommended literature, etc.). As is clear from the questionnaires, as used by all respondents, within the innovative training at the OA, more than a half of the respondents made use of at least 81% of all provided information and documentation. The following areas were assessed: Actual use of the information acquired during content training for a given subject (the latest news, new acts, changes) Actual use of practical examples to activate students within a given subject, Actual use of all documentation obtained at the department for a given subject (notices, worksheets, CD – yearbooks final works, recommended literature, etc.)

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Example No. 3 A “Development of New Educational Programmes within Professional Education for the Needs of the Automotive Industry” project, ITMS code 11230100481

Country: Slovak Republic Region: NUTS I – SR Operation, scheme, policy: Human Resources Sector Operational Programme Duration: 1 Aug. 2007 – 31 Dec. 2008 Objective: Convergence/ Competitiveness / ETC Funding: Total Cost: € 1 327 753.44

EÚ contribution: € 995 815.08 National: € 331 938.36 Regional € 0.00 Private € 0.00

Contact : Name: Ing. Ivan Stankovský, CSc. Organisation: Štátny inštitút odborného vzdelávania (The State Professional Training Institute) Address: Bellova 54/a, 837 63 Bratislava Email: siov@siov.sk Internet: –

Operation / policy description:

Overall objectives – description of activities – beneficiaries – expected impact (or actual results) The objectives of the project: To make use of and strengthen the advantages of the current system of professional training and preparation in the Slovak Republic; To adjust professional training to the requirements of a single European labour market; To provide a higher level of general and board profile professional training and preparation; To achieve labour force quality as a key factor in society's productivity; To perceive professional training as one of the priority instruments for employment and competitiveness; To continually provide tripartite as the determining form of the engagement of social partners into educational programmes; To permanently focus preparation on small and medium-sized enterprises. The project applies to an activity called “Adequate Adaptation of Teaching and Technical Skills of Teaching Staff through Specialized Training Programmes Based on Modernized Syllabuses”. The goal of the project is to form a group of training programmes for professional training at a level of ISCED 3C and ISCED 3A, which would make professional education and preparation of the elementary school graduates possible at currently selected vocational schools (SOU and SOŠ) in Žilina and in the Trnava Region Target groups: The teaching staff within the system of professional training and preparation; The secondary vocational schools students; The vocational schools students. Result: 7 schools participating in the monitoring and evaluation of the quality of professional training and preparation; 142 students participating in the monitoring and evaluation of the quality of professional training and

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education, 6 newly-built sample classrooms equipped with necessary didactic technology.

Strategic Context:

Background information – link to challenge being addressed by operation /Policy Labour market needs and educational system outputs do not match

Operation / policy design/ implementation:

Design – management - monitoring – innovation or good practice elements The educational programme was developed to contribute to the creation of jobs as early as possible during study and to develop features and competencies defined during the creation of the graduate's structured profile. The programme is based on the development of a system of skills and habits and we developed it directly on-site at the workplace. The implementation of the new educational programme also includes an important element: the development of a system of evaluation of its graduates. The proposed evaluation system is included in a material called “Methodology of Evaluation and Classification of Students within the Automotive Production Mechanic-Specialist Educational Programme”. The methodology stems from the definition of basic terms and gradually deals with the issue of measuring the effectiveness of the teaching process, the evaluation process and its types; it represents the evaluation phases and functions. It deals with the forms of measuring student performance, evaluation requirements and also management of documentation related to the evaluation of student classification. Effective application of new technologies within the teaching process was an important part of developing the new teaching programme.

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Example No. 4 A “Progressive Technologies in the Engineering Industry – a Second Chance on the Labour Market” project – a pilot verification, ITMS code 11230220307

Country: Slovak Republic Region: Banská Bystrica Region Operation, scheme, policy:

Human Resources Sector Operational Program

Duration: 8 March 2006 – 31 Aug. 2008 Objective: Convergence/ Competitiveness / ETC Convergence Funding: Total Cost : € 75 174.27

EÚ contribution : € 56 380.70 National € 15 034.85 Regional € 3 758.71 Private € 0.00

Contact : Name: Ing. Ján Melich, Director Organisation: Spojená škola (United School) Address: Štúrova 848, 962 12 Detva Email: sekretariat@sssdetva.edu.sk Internet: www.sssdetva.edu.sk

Operation / policy description:

Overall objectives – description of activities – beneficiaries – expected impact (or actual results) The objectives of the project: The goal of the “Progressive Technologies in the Engineering Industry – a Second Chance on the Labour Market” educational course – pilot verification is as follows: In Group A), prepare graduates who completed at least secondary education for the labour market so that they can find work in modern engineering companies – with CNC machines and CNC centres using the latest information technologies in the production process and also within constructing and technological preparation. Participants will acquire “CNC Machine Tool and Centre Operator” qualification. In Group B), motivate persons with insufficient qualification to acquire elementary knowledge and skills in the field of manual processing and welding of metals to help them find a job. Simultaneously, we will open a road for them to further education in the study with vocational certificate, which also includes passing a welding course. Participants will acquire “Metal Working – Tack Welding” qualification. Project implementation is to help graduates and persons with insufficient qualification to re-enter the labour market. Description of activity: The educational programme was implemented in a form of an eight-week course for a target group of graduates, and a four-week course for a target group of persons with insufficient qualification. The programme should provide a second chance to the target group of graduates to enter regional or the national labour market as they were trained for the latest metal cutting technologies as currently used by engineering companies and offers an educational programme module, which will consist of work with special engineering software and also in the completion of practical exercises on modern CNC machines, which use elements of electronic communication. The programme should have helped the target group of persons with insufficient qualification to acquire professional knowledge and manual skills mainly in the metal working and tack welding professions, to motivate them through the

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educational programme to complete secondary education and to give them a second chance they did not have before. The programme was opened on the basis of experience and needs of the labour market in Banská Bystrica region. Successful course graduates were given course certificates. Target group: persons with insufficient qualification and graduates The reached measurable output indicators: The number of newly created programmes and forms of further education implemented by the applicant: 1 The number of participants who completed the programme focused on the acquisition of skills in the field of ICT: 17. Output: The building of technical classroom that prefers the development of information and communication technologies in the field of engineering through CAD and CAM software, The acquisition of Ministry of the Education accreditation for an educational programme: CNC Machine Operator The establishment of cooperation with surrounding engineering companies, Deepening of the interest in engineering study focused on the operation of CNC machines.

Strategic Context:

Background information – link to challenge being addressed by operation /Policy Labour market needs and educational system outputs do not match

Operation / policy design/ implementation:

Design – management - monitoring – innovation or good practice elements The programme was opened on the basis of experience and regional labour market needs in order to provide graduates with the latest technical information from the engineering industry and also with practical skills that will help them to quickly integrate into developing engineering production processes. The course focused on the interconnection of acquired technical engineering and information technologies knowledge with practical skills within CAD and CAM and the operation of CNC machines, which opened possibilities for improvement and effectiveness of the teaching process and created larger room for the resolution of practical tasks. The goal was to connect theory with practice so that graduates, after completion of the course, are ready to quickly adapt to the production process.

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Example No. 5 Project name: Parks and Economy – The development of initiatives to make use of the natural heritage potential within the regional land use planning. Project duration: 04/2006 - 03/2008 Programme: INTERREG III B CADSEC Priority: 1: Supporting sustainable development and social and economic cohesion Budget (in EUR): Total project budget: 1 433 965.00 Budget of the Slovak project partner: 119 975.00 European Regional Development Fund contribution: 59 987.50 National resources (state budget contribution): 53 988.75 Own resources: 5 998.75 Contact information: Name: Ing. Vladimír Hudek, CSc. Organization: Regionálne environmentálne centrum Slovensko Regional Environmental Centre Slovakia Address: Vysoká 18, 811 06 Bratislava E-mail: rec@changenet.sk Internet: www.rec.sk Main goal: To create natural and landscape parks in rural environments in order to protect sensitive ecosystems and also to provide better market instruments to promote sustainable tourism and environmentally friendly products. Description of activities: To prepare an access arising from the framework of SWOT analysis, to establish a natural park in each project area, to develop a mutual management strategy in order to register an official trademark for the marketing purposes, to prepare conceptual recommendations based on project outputs, to cooperate with partners and to mutually exchange experiences and know-how through the International Expert Group for Rural Development and to establish relations with research institutions. Target groups: The participating project partners are direct users and beneficiaries. Outputs of the project were further designed for public entities, communities and private entities from the areas in question (small and medium-sized enterprises in the field of traditional crafts and typical domestic products, eco-agricultural products and products promoting sustainable tourism) and local population in these areas. Impact/Outputs: Specific outputs in the parks themselves: 7 SWOT analyses carried out, 7 management plans developed (supplemented by feasibility studies), 6 registered trademarks (together with the quality management system), 8 local pilot projects implemented and at least 18 events for locally interested entities (working meetings). Communication materials were developed and distributed and 5 meetings with partners were organized (including final conference).

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Example No. 6 Project name: DANewBE Data – New, more beneficial digital cross-border exchange of waterway information Project duration: 01/2005 - 12/2007 Programme: INTERREG III B CADSEC Priority: 2: Effective and sustainable transport systems, access to information society Budget (in EUR): Total project budget: 2 091 000.00 Budget of the Slovak project partner: 668 300.00 European Regional Development Fund contribution: 501 225.00 National resources (the state budget contribution): 133 660.00 Own resources: 33 415.00 Contact information: Name: Ing. Štefan Polhorský Organization: Slovenský vodohospodársky podnik, š.p. (OZ

BA) - Slovak Water Management Company Address: Karloveská 2, 842 17 Bratislava E-mail: stefan.polhorsky@svp.sk Internet: www.svp.sk Main goal: To provide internationally compatible, high-quality services to support the transport sector using inland waterways and to prepare the final implementation of modern IT systems according to the EU guidelines. Description of activities: Cooperation between organizations responsible for the waterway; to define the quality of standards for services; to prepare feasibility studies for the implementation of international standardized systems; to provide for the compatibility of maps for cross-border sections, more intensive exchange of information between the countries in question and measurements using the mutually set standards for high data quality Target groups: The project outputs were directly designed for seamen along the Danube Waterway: sailors on passenger ships, ships transporting waste, goods, and private persons on their personal vessels. These groups rely on accurate and credible information on the inland waterway in accordance with valid standards. Impact/Outputs: To prepare the electronic navigation map sections that will be regularly updated; to develop an object catalogue that will be expanded by other attribute features related to ecology, tourism and natural threats

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Example No. 7

A good practice example:

Country: Slovakia Region: Prešov Operation, scheme, policy:

The completion of the Poprad- Matejovce WWTP ISPA/CF 2003/SK/16/P/PE/019

Duration: 23 Dec. 2003 – 31 Dec. 2008 Goal: Convergence Financing Total costs: € 21 367 647.66

The EU contribution: € 13 163 088.71 EC Decision No. DL/2003/3654/ National contribution: € 4 874 995.83 Regional contribution: - Private resources: € 3 329 563.12

Contact: Name: Mr. Radoslav Lipták Organization: the MŽP SR Address: Nám. Ľ. Štúra 1. 812 35 Bratislava, Slovakia E-mail: radoslav.liptak@enviro.gov.sk Internet: www.enviro.gov.sk

Operation/policy Final beneficiary: Podtatranská vodárenská spoločnosť, a.s. (Tatra Water Management Company), Hraničná 662/17, Poprad, 058 89

Overall project objectives: � To provide for environmental protection in the Poprad region. � To improve environmental conditions next to the Tatra National

Park (TANAP) � To support economic development in the region.

Specific project objectives: � The completion and reconstruction of the public sewage system in

Poprad and Svit. � The completion and reconstruction of existing public sewage

system and the building of a new sewer network for the Smokovec micro-region consisting of Dolný Smokovec, Horný Smokovec, Nový Smokovec, Starý Smokovec, Pekná Vyhliadka and Pod Lesom, further for Nová Lesná and Mlynica, Spišská Teplica, Spišská Sobota, Veľká, Stráže pod Tatrami, Matejovce, Lučivná, Štrba, Tatranská Štrba and Veľká Lomnica.

� The completion of the Poprad – Matejovce WWTP with capacity for sewage-connected communities listed above with waste water treatment in accordance with recipient impact according to the emission principle.

� The reduction of discharged waste into the Poprad River through the treatment of all captured wastewaters in the Poprad-Matejovce central WWTP (including the removal of nutrients).

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The above specific objectives were expanded by further objectives and related activities based on European Commission Decision /K(2003)6984/: dated 15 December 2006:

� Expansion of the completion of public sewage system in Štrba. � Connection of existing public sewage systems of Štôla and

Mengusovce communities to the Poprad-Matejovce WWTP. � Completion and connection of public sewage system of city

districts of Kvetnica, the Juh and Západ housing development in Poprad to the Poprad-Matejovce WWTP.

� Decommissioning and demolition of existing WWTPs in Štôla, in Tatranská Štrba and double-storied septic tank in Tatranská Štrba.

The overall objectives of the projects together with specific objectives of the projects stated above have been met by implementing these measures.

Sewage system completion in Poprad and Svit, and the building of new waste water drainage in communities of Lučivná, Štrba, Tatranská Štrba and the completion of the Poprad-Matejovce WWTP have provided for the collection, discharge and treatment of communal waste waters within the project area. The original waste water collection system in cesspools and septic tanks in areas without sewage systems, the technical condition of the waste water disposal equipment and also the uncontrolled export of collected waste waters represented a risk of surface and underground water contamination for this region. Completion of the measure resulted in the specific goal of decreased surface and underground water contamination in order to provide compliance with national legislation and with the thorough application of EC guidelines. These objectives were reached by completing the following activities: Expansion and completion of the public sewage system:

� Connection of the A and O collectors to the Poprad Matejovce WWTP (DN 1200)

� Connection of a collector from Nová Lesná with an O collector into the Poprad-Matejovce WWTP (DN 600)

� Construction of a sewage pumping station in Veľká Lomnica and effluent conduit from Veľká Lomnica into the Poprad-Matejovce WWTP (DN 250)

� Construction of a new sewage network for communities of Tatranská Štrba, Štrba and Lučivná and their connection to the Poprad-Matejovce WWTP (DN 300 – DN 500)

� Connection of Lučivná –Svit collector to Svit town's public sewage system (DN 400).

The identified sections of collectors in Svit and in Smokovec towns, which were in bad technical condition (infiltration of foreign water), were reconstructed either through the exchange of tubes or through a trenchless

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method reaching a total length of 4.12 km of sewage system piping. Activities carried out on the basis of European Commission Decision /K(2003)6984/: dated 15 December 2006 were focused on the following:

� Connection of Štôla community through an “R” collector and Mengusovce community through an “M” collector of a total length of 5.765 km to an “O” interceptor and subsequently to the Poprad-Matejovce WWTP

� Connection of Kvetnica city district of Poprad to the existing public sewage in Poprad consisting of the K1 and K2 line 2.331 km from pumping station and effluent conduit totalling 549 m

� Completion of public sewage system in the Západ housing development connecting existing residential units to the sewage system, including the construction of a pumping station and an effluent conduit of 78 m.

� Increasing “D” collector's capacity through a change in the profile to DN 600, which diverts waste waters from the Juh housing development of a total length of 204 m

� Completion and expansion of public sewage system in Štrba, which includes 901 m of DN 300 tubes.

Waste water treatment:

- Obsolete and dilapidated WWTPs in Smokovce, Nová Lesná and Poprad were decommissioned and liquidated - Poprad-Matejovce WWTP was completed to the necessary capacity as a mechanical-biological WWTP with the removal of nutrients - Decommissioning and demolition of small WWTPs in Štôla, in Tatranská Štrba and the double-storied septic tank in Tatranská Štrba The expansion, completion and reconstruction of sewage networks was an important measure for the problem-free collection, discharge and subsequent treatment of wastewater from the project area in order to reduce contamination of recipients in Mlynica and Poprad under valid legislation, to improve social conditions of the connected population and to create better conditions for the development of housing, tourism and businesses. This is public utilization. Based on an ISPA/Cohesion Fund application, preconditions for the wastewater discharge for 33,701 citizens (projected year 2025) were to be prepared. With regard to the fact that communities of Štôla, Mengusovce and Kvetnica were additionally connected within the project, it can be said that preconditions for the connection of the above number of citizens to the sewage system have been met.

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Example No. 8 Country Slovak republic NUTS III Banská Bystrica Autonomous Region Operation number

Zvolenská Slatina elementary school - replacement of windows and building thermal insulation – call ROP-1.1-2008/01 Measure 1.1 Educational Infrastructure Priority Axis 1 Educational Infrastructure Regional Operational Programme

Operation duration

1 Dec. 2007 – 30 Nov. 2008

Goal Convergence Budget (EUR) Maximum total eligible

expenditures 431 144.68

The European Regional Development Fund contribution

366 472.98

National resources 43 144.47 Regional resources 21 557.23 Private resources 0.00

Contact information

Name RNDr. Juraj Bódi Organization Address Záhradná 11/13, 96212 Detva E-mail bodi@juvit.sk Internet

Description of the operation

Renovation of a sub-region elementary school with kindergarten resulting in better conditions for carrying out educational process and a pilot educational process. Execution of projected works: replacement of windows with plastic windows, thermal insulation of external cladding, roof truss replacement, replacement of floors, replacement of school desks and chairs for pupils and teachers will result in: 1. Elimination of the state of despair of wooden windows 2. Lower building energy consumption by 66% 3. Higher security for pupils, teachers, parents and visitors 4. Higher overall standard of the school object Overall, educational conditions will improve and simultaneously decrease the community's costs for annual repairs of the school.

Strategic context of the operation

The elementary school and the kindergarten in Zvolenská Slatina is a rural type school. It was built during World War II in 1942 - 43 and in 1975 a workshop was added to the building. The elementary school is located in a built-up part of the community. It is a three-storey brick building with low external thermal resistance. The roof truss and windows are made of wood. Despite annual investments on the part of the founder – the community, the masonry of the building is damaged, flat parts of the roof have insufficient thermal insulation and wooden windows are in a state of despair, which has an impact on the buildings' energy efficiency. The plumbing is damaged after 60 years in operation. Stairway and classroom floors are damaged. Classroom fittings are obsolete and worn.

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Method of the operation implementation

The project goal – improving conditions for carrying out educational process and preparing educational process – will be reached by completing the following activities:: Main activities: 1.SO-01-A1 – Renovation of the school's main building: - Replacement of wooden windows totalling 145 or 584.53 m2, - Thermal insulation of the external cladding totalling 1 350.65 m2, - Replacement of the roof truss area totalling 1 137.46 m2, of the total area of 3 069.38 m2 2.SO-01-A2 – Floor replacement: 911 m2 3.SO-01-A3 – The procurement of fittings – for pupils (school desks + 2 chairs per each school desk) totalling 48 units and the sets for teachers (teacher's desk + chair) totalling 4 units Supporting activities: 1. Project and engineering works for and during project implementation 2. Completion of a tender for a supplier of the construction work under Act No. 25/2006 Coll. 3. Project preparation and management In terms of organization, the project will be provided for by a working team consisting of people with years of experience with projects and who have implemented several projects financed from pre- and post-accession EFs and Structural Funds. From the technical point of view, the project will be provided for by technical capacities of Zv. Slatina community and supplier capacities. Despite annual investments on the part of the founder – the community, the masonry of the building is damaged, flat parts of the roof have insufficient thermal insulation and wooden windows are in a state of despair, which has an impact on the buildings' energy efficiency. The plumbing is damaged after 60 years in operation. Stairway and classroom floors are damaged. Classroom fittings are obsolete and worn. The proposed comprehensive solution – to reconstruct the building through the activities proposed in paragraph c) – to eliminate the above shortcomings and cut the school's operating costs. Request for the funding of the project was submitted in the previous planning period. The project was approved; however due to insufficient funds it was included among the Ministry of the Construction and Regional Development's pending projects. The currently submitted project is more complex due to the additional replacement of the roof covering, replacement of floors and replacement of fittings. Therefore, the budget for this application has been modified.

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Example No. 9 Country Slovak Republic NUTS III Nitra Autonomous Region Operation number

Revitalization of the Heroes‘ Square, Levice Call ROP-4.1a-2009/01 Measure 4.1 Community revitalization Support area 4.1a Separate demand-oriented projects Priority Axis 4 Community regeneration Regional Operational Programme

Operation duration

1 April 2010 – 31 Dec. 2011

Goal Convergence Budget (EUR) Maximum total operating

expenditures 1 659 725.27

The European Regional Development Fund contribution

1 410 766.47

National resources 165 972.53 Regional resources 82 986.27 Private resources 0.00

Contact information

Name Ing. Andrea Bellušová Organization Address Námestie hrdinov 1, 943 32 Levice E-mail manager@levice.sk Internet

Description of the operation

After the project is completed there will be a cultural-resting zone in the downtown of the city. The gathering area will serve for a daily life of citizens and city visitors and for organizing regular cultural and social events. The completion of the project will result in a harmonized and cultivated public area. Paved and green areas with small architectural elements (benches, waste baskets, etc.) will be used as a place for citizens and visitors to the city to visit. The reconstruction of sidewalks will contribute to the safety of pedestrians. Information boards will better inform visitors on the city and the region.

Strategic context of the operation

Levice is the most eastern city of the Nitra Region. It is both an innovation centre for growth and an economic and cultural centre of the region. The overall revitalization of the central urban area is the subject matter of the project. The overwhelming part of its current status consists of historic stone paving, sidewalks and green areas with poor surface quality and deformation that show a low standard of aesthetic value. Current areas cannot perform the social function of a public area (missing small architectural elements); they do not meet the city's citizens' and visitors' needs (the function of the square as a priority in relation to supporting parking places in the downtown part of the city zone).

Method of the operation implementation

The technical solution takes into account the layout area in the central zone of the town and the settled ownership relations. Proposed technical solution: reconstruction of paved surfaces designed for gathering, reconstruction of sidewalks, building of a new stopping area, new public

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lighting, and public green and new small architectural elements. The project will result in harmony in the area, the elimination of visual shortcomings and harmonization of the architectonical elements used. The new space with its rich civil and commercial amenities will offer citizens and tourist a resting and relaxation area and services for tourists which have been missing so far upon its completion. The intention of Levice town is to completely finish the central zone in accordance with the project goal, which consists of increasing both the competitiveness and attraction of Levice. The current area of the central town zone is architectonically non-homogenous and spatially under-dimensioned. The project follows the development activities of the town focused on infrastructure modernization, town residential areas and civil amenities. Implementation of the project will create preconditions for social activities in this area. The pedestrian zone will be extended and improved, pedestrian security will be higher, and the green in the centre and the installation of various small architectural elements will increase the aesthetic value of the downtown. The project will result in higher quality of services rendered, which will increase the citizens' satisfaction and will improve the quality of life in the town

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Example No. 10 Country Slovak Republic NUTS III Banská Bystrica Autonomous Region Operation number

Reconstruction, modernization and additional building of a fire station for the Fire and Rescue Brigade Directorate (OR HaZZ) in Lučenec Call ROP-4.2-2009/01 Measure 4.2 Infrastructure for non-commercial rescue services Priority Axis 4 Community regeneration Regional Operational programme

Operation duration

1 Aug.2010 – 31 May 2011

Goal Convergence Budget (EUR) Maximum total eligible

expenditures 1 402 440.87

The European Regional Development Fund contribution

1 192 074.74

National resources 210 366.13 Regional resources 0.00 Private resources 0.00 Contact information

Name Ing. Miroslav Podhradský

Organization Address Komenského 27, 97401 Banská Bystrica E-mail miroslav.podhradsky@hazz.minv.sk Internet Description of the operation

Project completion will result in spatially and hygienically suitable conditions for the work of all members of the OR HaZZ through the creation of premises for administration, training and drills, physical preparation, night duty, boarding, technical premises, treatment and garaging of technical equipment. Implementation will result in a reduced impact on the environment (the capture of oil from wastewater), increased building energy efficiency and also will remove barriers to the building. This project will make it possible to improve conditions for technical assistance and professional cooperation with communal fire brigades within the relevant district. Similar project can be implemented in relation to other fire stations within the region.

Strategic context of the operation

The OR HaZZ fire station in Lučenec is an III-type station responsible for a district containing 43 communities with 51,828 citizens. Public administration is provided by 8 members and emergency activities are provided by 29 members of the OR HaZZ, who make about 507 responses to fires and other emergencies a year. The relevant district constitutes the border with Hungary and in case of emergency activity it is possible to provide a cross-border help. Public administration and shift service are provided for in the premises of the fire station with insufficient, unsuitable and energy inefficient premises for professional training, physical preparation, rest and hygiene. Also, conditions for the treatment and maintenance of the fire technology and material means are unsuitable. With regard to this situation, it is suggested to carry out reconstruction, to

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build an additional building and to procure internal furniture. Method of the operation implementation

The project will be implemented in a supplier way based on a tender for selection of the supplier of the building. Building inspection will also be provided for on the basis of a tender. During the implementation, the members of the District and Regional Fire and Rescue Brigade Directorates (OR HaZZ and KR HaZZ respectively) will carry out monitoring and will provide cooperation. The applicant's economic department will provide inspection and completed accounting and invoicing activities. Building construction works will be carried out in accordance with the project for completing the building in a logical and timed sequence. Respect for the project requirements and eventual justified changes will be controlled and approved by the chief designer or sub-designers. The project is to be implemented due to the unsuitable condition of the building and requirements for this type of fire station and also due to the tasks that the station is to perform in this region. Achieving project objectives will result in a more effective and higher quality activities performed by the HaZZ for relevant districts or when helping the wider region. The completion of the project will result in modernization of the fund for constructing buildings for fire stations, which will contribute to an eventually possible personnel and technical expansion and through this to higher quality and territorial security. The KR HaZZ is a budgetary organization financed from the state budget. It performs tasks arising from Act No. 315/2001 Coll. especially public administration tasks in the field of fire protection, fire fighting, and rescue work during accidents, natural disasters, help in cases of a threat to life and health of persons and property and also the environment. The KR HaZZ manages the performance of fire units, state administration, keeps payroll and personnel records and secures the economic and operational functioning of subordinated units. The KR HaZZ has experience with renovation and construction work and with projects funded from the EU funds (Phare, Visegrad).

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Example No. 11 Country: Slovakia Region: Prešov Operation, scheme, policy:

The completion of the Poprad- Matejovce WWTP ISPA/CF 2003/SK/16/P/PE/019

Duration: 23 Dec. 2003 – 31 Dec. 2008 Goal: Convergence Financing Total costs: € 21 367 647.66

The EU contribution: € 13 163 088.71 EC Decision No. DL/2003/3654/ National contribution: € 4 874 995.83 Regional contribution: - Private resources: € 3 329 563.12

Contact: Name: Mr. Radoslav Lipták Organization: Slovak Environmental Ministry Address: Nám. Ľ. Štúra 1. 812 35 Bratislava, Slovakia E-mail: radoslav.liptak@enviro.gov.sk Internet: www.enviro.gov.sk

Operation / Policy

Final beneficiary: Podtatranská vodárenská spoločnosť, a.s. (Tatra Water Management Company), Hraničná 662/17, Poprad, 058 89

Overall project objectives: To provide for environmental protection in the Poprad region. To improve environmental conditions next to the Tatra National Park (TANAP) To support economic development in the region. Specific project objectives: The completion and reconstruction of the public sewage system in Poprad and Svit. The completion and reconstruction of existing public sewage system and the building of a new sewer network for the Smokovec micro-region consisting of Dolný Smokovec, Horný Smokovec, Nový Smokovec, Starý Smokovec, Pekná Vyhliadka and Pod Lesom, further for Nová Lesná and Mlynica, Spišská Teplica, Spišská Sobota, Veľká, Stráže pod Tatrami, Matejovce, Lučivná, Štrba, Tatranská Štrba and Veľká Lomnica. The completion of the Poprad – Matejovce WWTP with capacity for sewage-connected communities listed above with waste water treatment in accordance with recipient impact according to the emission principle. The reduction of discharged waste into the Poprad River through the treatment of all captured wastewaters in the Poprad-Matejovce central WWTP (including the removal of nutrients). The above specific objectives were expanded by further objectives and related activities based on European Commission Decision /K(2003)6984/: dated 15 December 2006: Expansion of the completion of public sewage system in Štrba. Connection of existing public sewage systems of Štôla and Mengusovce communities to the Poprad-Matejovce WWTP. Completion and connection of public sewage system of city districts of Kvetnica, the Juh and Západ housing development in Poprad to the Poprad-Matejovce WWTP.

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Decommissioning and demolition of existing WWTPs in Štôla, in Tatranská Štrba and double-storied septic tank in Tatranská Štrba The overall objectives of the projects together with specific objectives of the projects stated above have been met by implementing these measures.

Sewage system completion in Poprad and Svit, and the building of new waste water drainage in communities of Lučivná, Štrba, Tatranská Štrba and the completion of the Poprad-Matejovce WWTP have provided for the collection, discharge and treatment of communal waste waters within the project area. The original waste water collection system in cesspools and septic tanks in areas without sewage systems, the technical condition of the waste water disposal equipment and also the uncontrolled export of collected waste waters represented a risk of surface and underground water contamination for this region. Implementation of the measure resulted in the specific goal of decreased surface and underground water contamination in order to provide compliance with national legislation and with the thorough application of EC guidelines. These objectives were reached be completing the following activities: Expansion and completion of the public sewage system: Connection of the A and O collectors to the Poprad Matejovce WWTP (DN 1200) Connection of a collector from Nová Lesná with an O collector into the Poprad-Matejovce WWTP (DN 600) Construction of a sewage pumping station in Veľká Lomnica and effluent conduit from Veľká Lomnica into the Poprad-Matejovce WWTP (DN 250) Construction of a new sewage network for communities of Tatranská Štrba, Štrba and Lučivná and their connection to the Poprad-Matejovce WWTP (DN 300 – DN 500) Connection of Lučivná –Svit collector to Svit town's public sewage system (DN 400). The identified sections of collectors in Svit and in Smokovec towns, which were in bad technical condition (infiltration of foreign water), were reconstructed either through the exchange of tubes or through a trenchless method reaching a total length of 4.12 km of sewage system piping. Activities carried out on the basis of European Commission Decision /K(2003)6984/: dated 15 December 2006 were focused on the following: Connection of Štôla community through an “R” collector and Mengusovce community through an “M” collector of a total length of 5.765 km to an “O” interceptor and subsequently to the Poprad-Matejovce WWTP Connection of Kvetnica city district of Poprad to the existing public sewage in Poprad consisting of the K1 and K2 line 2.331 km from pumping station and effluent conduit totalling 549 m Completion of public sewage system in the Západ housing development connecting existing residential units to the sewage system, including the construction of a pumping station and an effluent conduit of 78 m. Increasing “D” collector's capacity through a change in the profile to DN 600, which diverts waste waters from the Juh housing development of a total length of 204 m

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Completion and expansion of public sewage system in Štrba, which includes 901 m of DN 300 tubes.. Waste water treatment: - Obsolete and dilapidated WWTPs in Smokovce, Nová Lesná and Poprad were decommissioned and liquidated - Poprad-Matejovce WWTP was completed to the necessary capacity as a mechanical-biological WWTP with the removal of nutrients - Decommissioning and demolition of small WWTPs in Štôla, in Tatranská Štrba and the double-storied septic tank in Tatranská Štrba The expansion, completion and reconstruction of sewage networks was an important measure for the problem-free collection, discharge and subsequent treatment of wastewater from the project area in order to reduce contamination of recipients in Mlynica and Poprad under valid legislation, to improve social conditions of the connected population and to create better conditions for the development of housing, tourism and businesses. This is public utilization. Based on an ISPA/Cohesion Fund application, preconditions for the wastewater discharge for 33,701 citizens (projected year 2025) were to be prepared. With regard to the fact that communities of Štôla, Mengusovce and Kvetnica were additionally connected within the project, it can be said that preconditions for the connection of the above number of citizens to the sewage system have been met.

Strategic context:

Additional information – connected to the actions taken to resolve the activity/policy Activities that Member States implemented within the ISPA/Cohesion Fund overcame many challenges during the project cycle. The ability to meet preconditions that lead to goal specification is the most important and key challenge. The ability to anticipate the scope of the project and the future impact of project implementation so that all participating entities (including the public) are satisfied was a key ability that remains emphasised by Member State bodies and final beneficiaries. In many cases the original estimates showed to be inaccurate during the implementation. The high quality of expertise included into the preparation of activities was to improve the implementation and completion process. However, taking into account the lack of expertise and experience in new Member States as well as constantly changing conditions and continued developments in the physical and legal environment, it was impossible to fully eliminate all inaccurate estimates. The flexibility of systems should be considered one of the key premises competent bodies should deal with within project preparation and implementation. Member State experience shows that rule flexibility is the main issue that should be solved and effectively incorporated into systems.

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Projects that include construction will always face conflicts between the planned proposals and reality. These conflicts should not be considered illegal or suspicious as such. The challenge of implementing such projects means fulfilling basic objectives (e.g. reduction of water contamination) under conditions that develop over time. Private sector engagement in systems primarily managed by the state or self-administering bodies during the implementation process is one of the key aspects of such evolution. The resolution of such unexpected circumstances is a key matter and the most challenging part of project proposal. Defining strict and overly demanding conditions could threaten otherwise fully

justified expenditures and subsequently the project itself and therefore EU assistance.

Activity/policy proposal/ implementation:

Design – management – monitoring – innovation or elements of good practice The completion of the Poprad –Matejovce WWTP was a project that started many years ago before Slovakia could benefit from Cohesion Fund assistance. Thus obsoleteness of the proposal had to be resolved. It was urgent to update the proposal and it has to be resolved in the first part of project implementation. However, this proposal proved to be inaccurate in many cases leading to variations (88) Management: Project management was provided by project managers acting on behalf of the final beneficiary in accordance with an agreement with an intermediary body under a managing authority (the Ministry of the Environment). The project manager is responsible for making payments and manages variations on behalf of the final beneficiary (including negotiations with various bodies affected and included in the construction process, not excluding the public). An independent constructor (“FIDIC Engineer”) is employed in order to provide for supervision over and administration of the contracted work. Monitoring: There are several levels of monitoring within project implementation. They include reporting and on-site inspection. Standardized contracts are used for partner/consultant reporting at the lowest level. The final beneficiary monitors activities on a quarterly basis and submits IBMA monitoring reports. The IBMA monitors activities at the national level and submits reports to the European Commission. The IBMA representatives carried out on-site inspections. Based on activity results several changes were made to the projects. Changes were submitted to the European Commission and it was asked to issue decisions as to project changes.

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The European Commission approved 2 project changes within the “Poprad” project.. Five supplements to the contract were concluded. The main reasons for project changes are expansions of the scope of the project due to the inclusion of new project areas in order to improve the objectives of the project while adhering to the financial budget and the shift in the deadline base on a European Commission decision Good practice: Despite many changes and modifications the waste water treatment plant and sewage system have been built and they fall into the scope of the activity. Many improvements made within the scope of the project could be made thanks to a flexible system between the European Commission, the IBMA, final beneficiary and contracting partner. Despite demanding administration, including many approved changes and variations made by the “constructor”, the WWTP itself was awarded the “Infrastructure Structure of 2007” award from the Slovak Association of Civil Constructors. Dealing with conflicts between strict formal and administrative requirements and efforts to improve project results in order to satisfy current needs were the main preconditions for successful achievement of project objectives. For the Poprad project, this was done in a way that enabled all parties to mobilize their resources and to achieve project objectives in accordance with the European Commission’s decision. Lesson learned: Too ambitious efforts of authorities to establish systems that would prevent bodies from slightly adjusting the scope of the project or project objectives would effectively lead to centralization that could cause the activities of all agents at the contracting partner and final beneficiary level to become ineffective. Too ambitious bureaucratic requirements will cause EU assistance to only be used in a formal manner and not in a technically relevant way.

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Example No. 12

Country: Slovak Republic Region: Prešov Implementation through:

Project implemented through Measure 1.1 Support for the development of new and existing enterprises and services The Scheme for state aid to support small and medium-sized enterprises

Duration of the project:

20 May 2005 – 31 Dec. 2006

Goal: Goal 1 Project costs: Total costs: € 6 617 758.04

The EÚ contribution: € 2 316 215.30 National resources: € 1 985 327.44 Private resources: € 2 316 215.30

Contacts: Beneficiary: Name: SPINEA, s. r. o., Prešov Address: Okrajová 33, 080 01 Prešov The managing authority for the SOP PS Name: Ing. Katarína Kurucová Organization: Ministry of the Economics Address: Mierová 19, 827 15 Bratislava E-mail: kurucova@mhsr.sk Internet: www.mhsr.sk

The project goal, description of activities, impact:

SPINEA, s.r.o. Prešov, completion of production premises and the introduction of new technologies focused on expanding bearing reducer production. The project indicators and their performance as of 30 June 2009: Indicator name Type Projected

value Measured value

The number of innovated products

Output 1 1

Sales (total for the company) in EUR

Result 53 807 342.49

37 984 868.78

Export growth (as a part of sales) in EUR

Result 53 641 372.90

37 367 681.96

The number of new or retained jobs (total for the company)

Impact 249 224

Value added (total for the company) in EUR

Impact 28 181 637.12

18 598 888.33

Strategic objectives:

The support for the development of existing and new production capacities of the company by implementing new technologies and providing an increase of high value added production, The creation of new jobs and an increase of labour productivity, effectiveness and production quality through the application of a management system, The development of cooperation in connection to large supplier enterprises, Increased competitiveness of the company's products on European and world markets Last but not least, the project goal was to contribute to the development of the Prešov Region, which, within the Slovak Republic, reports the least satisfying

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economic and social indicators. Operations used for implementation:

The project was implemented by the National Agency for the Development of Small and Medium-Sized Enterprises as a private sector project. Project implementation monitoring was performed on the basis of monthly reports or and continues on a semi-annual basis according to the list of submitted indicators. Verification of measured values was carried out by the agency on the aid beneficiary’s premises. The project was implemented without any complications.

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Example No. 13 – European territorial cooperation Project No. 1 Project name: Parks and Economy –Development of initiatives to utilise natural heritage potential within regional spatial planning. Project duration: 04/2006 - 03/2008 Programme: INTERREG III B CADSEC Priority: 1: Support for sustainable development and social and economic cohesion Budget (in EUR): Total project budget: 1 433 965.00 The budget of the Slovak project partner: 119 975.00 European Regional Development Fund contribution: 59 987.50 National resources (state budget contribution): 53 988.75 Own resources: 5 998.75 Contact information: Name: Ing. Vladimír Hudek, CSc. Organization: Regionálne environmentálne centrum Slovensko (Regional Environmental Centre Slovakia) Address: Vysoká 18, 811 06 Bratislava E-mail: rec@changenet.sk Internet: www.rec.sk Main goal: To create natural and landscape parks in rural environment in order to protect sensitive ecosystems and to provide better market instruments to promote sustainable tourism and environmentally friendly products. Description of activities: To prepare access arising from the framework of the SWOT analysis, to establish a natural park in each project area, to develop a mutual management strategy in order to register an official trademark for the marketing purposes, to prepare conceptual recommendations based on project outputs, to cooperate with partners and to mutually exchange experience and know-how through the International Expert Group for the Rural Development and to establish relations with research institutions. Target groups: Participating project partners are direct users and beneficiaries. Project outputs were further designed for public entities, communities and private entities from the areas in question (small and medium-sized enterprises in the field of traditional crafts and typical domestic products, eco-agricultural products and products promoting sustainable tourism) and the local population in these areas. Impact/Outputs: Specific outputs in the parks themselves: 7 completed SWOT analyses, 7 management plans developed (supplemented by feasibility studies), 6 registered trademarks (together with a quality management system), 8 local pilot projects implemented and at least 18 events for locally interested entities (working meetings). Communication materials were developed and distributed and 5 meetings with partners were organized (including a final conference).

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Example No. 14 – European territorial cooperation Project No. 2 Project name: DANewBE Data – New, more beneficial digital cross-border exchange of waterway information Project duration: 01/2005 - 12/2007 Programme: INTERREG III B CADSEC Priority: 2: Effective and sustainable transport systems, access to information society Budget (in EUR): Total project budget: 2 091 000.00 Budget of the Slovak project partner: 668 300.00 European Regional Development Fund contribution: 501 225.00 National resources (the state budget contribution): 133 660.00 Own resources: 33 415.00 Contact information: Name: Ing. Štefan Polhorský Organization: Slovenský vodohospodársky podnik, š.p. (OZ

BA) - Slovak Water Management Company Address: Karloveská 2, 842 17 Bratislava E-mail: stefan.polhorsky@svp.sk Internet: www.svp.sk Main goal: To provide internationally compatible, high-quality services to support the transport sector using inland waterways and to prepare the final implementation of modern IT systems according to the EU guidelines. Description of activities: Cooperation between organizations responsible for the waterway; to define the quality of standards for services; to prepare feasibility studies for the implementation of international standardized systems; to provide for the compatibility of maps for cross-border sections, more intensive exchange of information between the countries in question and measurements using the mutually set standards for high data quality Target groups: The project outputs were directly designed for seamen along the Danube Waterway: sailors on passenger ships, ships transporting waste, goods, and private persons on their personal vessels. These groups rely on accurate and credible information on the inland waterway in accordance with valid standards. Impact/Outputs: To prepare the electronic navigation map sections that will be regularly updated; to develop an object catalogue that will be expanded by other attribute features related to ecology, tourism and natural threats.

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E. Conclusions Overall conclusions related to: a) Expected social-economic trends Existing trends economic development and overall social-economic trends are significantly disturbed by the global economic crisis. Therefore, it is difficult to predict expected development. The Slovak economy belonged among the fastest growing economies in the EU. However, an estimated GDP drop is questionable. At the same time, Eurostat predictions suggest that economic recovery can be quick. Positive growth rates in 2010 (1.9 %) and 2011 (2.6 %) should be higher than the EU average (0.7 % and 1.6 % respectively). The high degree of openness in the Slovak economy is accompanied by a high level of vulnerability during such a global crisis as well as the by ability to recover faster. The adoption of Euro and low levels of state debt were advantages during the crisis. Problems can occur in achieving priority objectives due to lower expenditure financing resources, which itself is the result of constraints on the expenditure side of the state budget (on-going consolidation), when considering the need to co-finance projects implemented with Structural Fund, the Cohesion Fund and Slovak Republic state budget resources. In future years we can expect an ongoing process of convergence towards EU average for these performance indicators. Stronger employment growth and lower unemployment changed in 2009: unemployment increased. Unemployment growth was regionally concentrated in the west of Slovakia mainly due to the loss of industrial jobs. In the east of the country, higher unemployment was connected to a great extent to job losses from jobs abroad. Also, higher long-term unemployment rate in central and east Slovakia suggests that the impact of crisis will persist longer in these regions. The dynamics of foreign investment inflows in the coming years will probably be lower due to the lower level of confidence in the global economy and, overall, the quality of business environment in Slovakia is decreasing. Critically low economic capacity will significantly restrict the long-term performance of the economy. On the contrary, however, the reduced gap in the field of an information society will be a driver of development. In spite of this periphery areas may not sufficiently benefit from this trend due to insufficient digital literacy. Although regional differences in key indicators are increasing, or remain the same, perception is a problem, especially in connection with the decreasing growth of real wages in regions that lag behind. Increasing specialization of the regional economy in the west of Slovakia brings positive effects towards improving income and social status during economic growth, but in the time of crisis its effects are negative. One can expect further increases in the concentration of industry in this part of the country.

b) Actual and expected benefits of Cohesion Policy The total allocation of EC funds for the implementation of Cohesion Policy in the Slovak Republic for the 2007 - 2013 programming period totals € 11.36 billion. The strategic goal and strategic priorities of the NSRF are being implemented through 11 OPs that contribute to achievement of the Convergence Goal and the Regional Competitiveness and Employment Goal. Cohesion Policy implementation started in connection with the approval of the NSRF and the OPs by the European Commission in the second half of 2007. In 2006 and 2007, public administration bodies responsible for managing and implementing the Structural Fund and the Cohesion Fund concentrated on creating a basic implementation framework (the Management System, the Structural Fund and the Cohesion Fund Financing

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Strategy, the Structural Fund and the Cohesion Fund Financial Management System) and at the Managing Authority level they concentrated on preparing to implement the OPs. By the end of 2007 only 2 calls for submission of applications for non-returnable financial aid were announced. Therefore, we can consider 2008 as the year in which actual implementation of the NSRF and Ops took place. With regard to time it took to prepare management documents, calls for the submission of applications for non-returnable financial aid and the need to completely fill out internal capacities we can say that the Slovak Republic is now in the last phase of the “start-up” phase of Cohesion Policy implementation. This phase is characterized by obvious progress in the number and volume of approved projects or contracts for non-returnable financial aid, which so far, with regard to their implementation progress, have shown minimal drawing of such funds. Restricted progress within implementation at the project level with weak drawing of financial assistance is the reasons that such interventions haven’t brought about the desired results as they haven't had a chance to show themselves. Due to this reason, we recorded only minimal contributions from supported interventions towards meeting established objectives in the monitored period. We expect that progress taking the form of Cohesion Policy implementation results will appear after 2010 and that real change from the impact of these projects will come even later. As of 30 September 2009, 2,463 applications for granting non-returnable financial aid were approved within 11 OPs and contracts to grant non-returnable financial aid were concluded to co-finance 1,787 projects. The total volume of EC funds represented in these contracts total € 2.106 billion as of this date, accounting for 18.54 % of the total allocation within the NSRF. The overall rate of EC financial allocations as represented by concluded contracts can be considered, in principle, to be acceptable, especially with regard to adherence to the n+3 rule. All OPs were able to conclude contracts for the implementation of commitments for 2008 with the exception of the Information Society OP and the Bratislava Region OP. The biggest volume of funds in absolute terms was contracted within the Transport OP and the Employment and Social Inclusion OP. When considering the share of the volume of EC funds represented by concluded contracts in terms of total programme allocation, the best progress was achieved by programmes with the lowest total allocation, i.e. the Technical Assistance OP and the Education OP. On the contrary, the Information Society OP reports a very low rate of concluded contracts due to the selected implementation strategy. At the end of the third year of the programming period , or at the end of the second year of OP implementation, the volume of expenditures declared to the European Commission by the Certification Body reached almost € 31.39 mil. This amount accounts for only 0.28 % of the total allocation for the Slovak Republic for the 2007 - 2013 programming period . Only three of the 11 OPs of the NSRF declared expenditures as of 30 September 2009: the Employment and Social Inclusion OP, the Transport OP and the Technical Assistance OP. This points to the fact that implementation has only just commenced for significant parts of projects where a concluded contract for non-returnable financial aid yet drawing of funds is at a low level or eligible expenditures for individual OPs have not yet been included into expenditures declared by the Certification Body to the European Commission. The restricted number of major projects in the implementation phase is one of the reasons for the relatively low use of Structural Fund and Cohesion Fund money. As to the priority topics relevant for the NSRF, the largest volume of funds within concluded contracts granting non-returnable financial aid concluded was within the framework of Priority Topic 75: Educational Infrastructure, followed by Priority Topic 21: TEN-T Highways, where concluded contracts for non-returnable financial aid totalled more

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than € 223 mil. The original relatively low allocation from the European Social Fund for taking active and preventative labour market measures (€ 6.87 mil.) was exceeded and now it reaches the a total of almost € 211 mil. in terms of contracts concluded within relevant priority topics. Despite the fact that NSRF implementation is still in the start-up phase at least with regards to the number and volume of approved projects/funds, more than € 107 mil. (more than 40 % of total allocation) has been contracted for the preparation, execution, monitoring and control of Cohesion Policy. Analysis of the actual use of funds allocated for individual priority topics shows that the drawing rate has exceeded the 85 % threshold in only 4 priority topics: No. 66 – Taking Active and Preventative Labour Market Measures (346.51 %), No. 18 - Mobile Railway Assets (99.60 %), No. 77 – Child Care Infrastructure (92.93 %) and No. 57: Other Aid to Improve Tourism (87.40 %). On the other hand, one can register 13 priority topics where no funds have been drawn and another 9 topics that report a lower than 1 % drawing of EC funds as of 30 September 2009. Of the total number of 66 priority topics relevant for the NSRF, a drawing rate exceeding 50 % was reported only within 7 priority topics, all of which, except for educational infrastructure, have a total allocation of lower than € 90 mil. When judging the benefits Cohesion Policy implementation, specifically in relation to supporting achievement of established objectives, it is necessary to emphasize that with regard to the current state of implementation the effects of drawn Structural Fund and the Cohesion Fund resources in the 2007–2013 programming period in Slovakia could not have shown themselves. Also with regard to the nature of selected objectives and relevant indicators (mostly output and impact indicators) the effects of supported interventions at the OP and NSRF level will appear after some time. Moreover, monitoring of physical progress through official statistical data (Eurostat, Statistical Office of the Slovak Republic) is conditioned by the accessibility of such data. At the NSRF strategic goal level there was positive progress and four out of five indicators showed target values to be exceeded. Exceeded target values can be primarily attributed to the high growth of the Slovak economy in recent years in the context of a positively developing global economy. In case of the summary innovativeness index, the Slovak Republic stays in 22nd place among EU Member States and it is among the states that lag behind in this field. A long-term problem is reflected in the low level of research and development expenditures, which, as measured as a share of GDP, have been decreasing since 1997. In 2007, Slovakia, with its share of total expenditures as a share of GDP at 0.46 %, had the worst position within the EU. This mainly applies to critically low value of corporate expenditures as a share of GDP at 0.18 %, which is ten times lower than the EU 27 average. Strategic Priority 1: Infrastructure and Regional Accessibility – Achievement of this goal is supported by meeting the objectives of four Specific Priorities, wherein each is connected to a specific OP. Environmental infrastructure and environmental protection areas recorded positive progress as there was progress towards meeting target values for all indicators. Also Education OP implementation showed slight progress, with 1 project supported in the monitoring period. However, this progress will intensify in the near future as the intensity of implementation is set to ramp up. Despite not having data available for indicators related to Specific Priority 1.1 - Regional Infrastructure (due to the modification of indicators and project values) we expect that in the near future there will be a significant increase mainly in the number of improved educational infrastructure facilities. At the level of Specific Priority 1.3 - Transportation Infrastructure and Public Passenger Transport through the Transport OP there was no change in the monitored period compared to 2007. However,

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as of 30 September 2009, 14 projects were approved, while 12 of them were already contracted. Strategic Priority 2: A Knowledge-Based Economy – Achievement of this goal is supported by meeting the objectives of four specific priorities through 3 OPs: the Information Society OP, the Research and Development OP and the Competitiveness and Economic Growth OP. Despite the fact that full-fledged implementation of the Information Society OP with regard to the selected strategy (preparation of feasibility studies precedes project implementation) has not yet started, there was, in the monitored period, slight progress towards achieving established objectives. It is expected that the effects of Information Society OP implementation will be clearer at the Specific Priority level after 2011. Research and development is one of the key areas for the fulfilment of Strategic Priority objectives. However, negative developments in this area in recent years, i.e. deterioration of all monitored indicators, points to the need to pay specific attention to this area and to mobilise resources. As of 30 September 2009, 130 projects were supported from the Research and Development OP. These projects are contributing to making improvements to the current situation. In most indicators we see moderate improvement when compared to baselines in terms of supporting company and service competitiveness, especially via innovation. On the contrary, the foreign tourism balance in 2008 dropped by almost 35 % compared to 2006. The decrease of the tourism balance was influenced by the stronger exchange rate of the Slovak Koruna against foreign currencies and simultaneously higher demand among Slovak Republic citizens for travel abroad36. At the level of the Competitiveness and Economic Growth OP, 219 projects were supported by the end of September 2009 – most of them within Priority Axis 1 - Innovations and the Growth of Competitiveness. Strategic Priority 3: Human Resources is implemented through OPs co-financed from the European Social Fund: the Employment and Social Inclusion OP and the Education OP. The share of public expenditures for human resources development (education) as a share of GDP and the share of citizens participating in the life-long learning aged 25 – 65 have dropped compared to the baseline. The opposite trend is visible in promoting employment growth and social inclusion. The poverty risk rate after social benefits expire and the long-term unemployment rate have dropped. However, one can expect worsening of this situation due to the global economic crisis. This should be alleviated through the implementation of projects within the Employment and Social Inclusion OP, specifically preventive and active labour market measures, in addition to governmental measures. This programme has the largest number of contracted projects of all NSRF Ops: a total of 589 projects totalling more than € 406 mil. (EU and national public resources). c) Appropriateness of NSRF strategy set-up, OP strategy and cohesion and synergy between established priorities Based on the indentified key disparities and development factors, a vision for the economic and social development of the Slovak Republic has been developed and a strategic goal for 2007–2013 has been set. The strategic goal for the use of Cohesion Policy support is higher competitiveness and performance in terms of the regions, the Slovak economy and employment while respecting the principles of sustainable development until 2013. This goal should be reached through the selected NSRF strategy, which is based on two fundamental principles: topical concentration and territorial concentration. Contributions will focus on

36 Source: http://www.rokovania.sk/appl/material.nsf/0/74356017B91DAE72C1257479002FE185?OpenDocument

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selected topical areas, i.e. infrastructure and regional accessibility, a knowledge-based economy and human resources. Despite marked change in the starting points of Cohesion Policy implementation due to the economic crisis, these topics, in principle, are considered relevant. However, as sustainable high growth of the Slovak economy was expected during NSRF preparation, the strategy was growth-oriented, focused on supporting the factors that help develop a knowledge-based economy. In the context of the economic crisis it will probably be necessary to focus, in a transitional period, on supporting such measures that can eliminate the social and economic impacts of the crisis in the most effective way. The current situation creates room for further topical concentration of Structural Fund and Cohesion Fund contributions and concentration on a smaller number of priority topics. These are mainly measures that only have limited effects with regard to their financial allocation and limited connection with further interventions. The current situation in areas that support the development of a knowledge-based economy, especially research, development and innovations, will have to focus on the mobilization of a sufficient volume of resources (including private capital) that then needs to be concentrated into a limited number of the key projects. Emphasis must be placed especially on connection to interventions supported within Cohesion Policy and within interventions supported from national resources. This field requires long-term attention and a systematic solution. Support itself from Structural Fund has no potential to fundamentally change the developments in this area. It would also be worth re-assessing the absorption capacity of the target groups for individual measures, i.e. both public and private sector entities. The economic crisis showed itself in a significant decrease of revenues for most regional governments, which has a negative impact on their development plans and absorption ability. Similarly, a large number of potential applicants for non-returnable financial aid from among entrepreneurs had to change their business plans due to lower demand and production. Implementation of projects supported from the Structural Fund based on the reimbursement of expenditures can be problematic for many companies. Modification of relevant regulations on the part of the European Commission and the inclusion of these measures within the Structural Fund and the Cohesion Fund Management System and within the Structural Fund and the Cohesion Fund Financial Management System gives the Managing Authority new possibilities to simplify project implementation.

The principle of territorial concentration of Structural Fund and Cohesion Fund contributions is still relevant. In this connection it is necessary to emphasize the need for effective and efficient coordination of interventions in target territories. When there is no regional development strategy that combines the sector and regional dimensions it is necessary to support functional connections between the innovative and cohesion poles of growth with other territories.

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Appendix No. 1 of the Slovak Republic 2009 Strategic Report

Table representing progress in financial implementation of operational programmes (as of 30 September 2009)

Progress in financial implementation according to operational programmes as of 30 September 2009

(1)

Operational programme

(2) Total volume of EU

resources 2007-2013

€

(3) Volume of approved

projects * –EÚ resources (€)

(4) Approved projects*/ Total

volume in % (3/2)

(5) Expenditures declared to the European Commission

(6) Declared expenditures/ total volume in

% (5/2)

Education and Social Inclusion OP (ESF) 881 801 578.00

364 232 002.01 41.31% 24 597 163.4

7 2.79 %

Convergence 864 000 000.00

353 625 539.71 40.93 24 325 329.0

3 2.82% Regional competitiveness and employment 17 801 578.00

10 606 462.30 59.58% 271 834.44 1.53%

Technical Assistance (ERDF) 97 601 421.00 43 561 411.16 44.63% 5 728 307.81 5.87 % Transport OP (KF) 2 329 495 498.00 330 748 280.40 14.20% 0.00 0.00 % Transport OP (ERDF) 877 409 097.00 224 928 663.35 25.64% 1 061 217.95 0.12 % Information Society OP (ERDF) 993 095 405.00

13 691 700.70 1.38% 0.00 0.00%

Environment OP (KF) 1 569 243 065.00 247 506 277.74 15.77% 0.00 0.00% Environment OP(ERDF) 230 756 935.00 44 036 954.22 19.08% 0.00 0.00% Regional operational programme (ERDF) 1 445 000 000.00

204 148 492.17 14.13% 0.00 0.00%

Competitiveness and Economic Growth OP (ERDF) 772 000 000.00

159 205 439.73 20.62% 0.00 0.00%

Health Service OP (ERDF) 250 000 000.00 104 160 009.05 41.66% 0.00 0.00% Education OP (ESF) 617 801 578.00 129 187 312.44 20.91% 0.00 0.00% Convergence 600 000 000.00 123 048 734.06 20.51% 0.00 0.00% Regional competitiveness and employment 17 801 578.00

6 138 578.38 34.48% 0.00 0.00%

Bratislava Region OP (ERDF) 87 000 000.00 3 774 323.37 4.34% 0.00 0.00% Research and Development OP (ERDF) 1 209 415 373.00

237 075 746.21 19.60% 0.00 0.00%

Convergence 883 000 000.00 191 488 425.11 21.69% 0.00 0.00% Regional competitiveness and employment 326 415 373.00

45 587 321.10 14.00% 0.00 0.00%

TOTAL 11 360 619 950 2 106 256 612 18.54 % 31 386 689 0.28 %

* Approved and contracted projects Source: columns 2, 5 and 6 the Ministry of Finance of the Slovak Republic columns 3 and 4 the Ministry of Construction and Regional Development of the Slovak Republic (ITMS)

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Code Priority Theme DescriptionCommunity amount - Allocated in OP - €

% of total allocated

Community amount - Allocated to selected

operations - €

% of total allocated

01 R&TD activities in research centres 88.470.487,00 19,70% 6.287.590,44 7,11%02 R&TD infrastructure and centres of competence in a specific technology 145.344.372,00 32,37% 15.546.909,49 10,70%03 Technology transfer and improvement of cooperation networks ... 34.108.506,00 7,60% 1.503.162,83 4,41%

04Assistance to R&TD, particularly in SMEs (including access to R&TD services in research centres) 0,00 0,00% 0,00 N/A

05 Advanced support services for firms and groups of firms 0,00 0,00% 0,00 N/A

06Assistance to SMEs for the promotion of environmentally-friendly products and production processes (...) 6.033.918,00 1,34%

170.000,002,82%

07 Investment in firms directly linked to research and innovation (...) 3.016.959,00 0,67% 0,00 0,00%08 Other investment in firms 0,00 0,00% 0,00 N/A09 Other measures to stimulate research and innovation and entrepreneurship in SMEs 3.016.959,00 0,67% 0,00 0,00%10 Telephone infrastructures (including broadband networks) 5.064.000,00 1,13% 8.284,35 0,16%11 Information and communication technologies (...) 63.713.883,00 14,19% 22.330.732,20 35,05%12 Information and communication technologies (TEN-ICT) 0,00 0,00% 0,00 N/A

13Services and applications for citizens (e-health, e-government, e-learning, e-inclusion, etc.) 0,00 0,00%

0,00N/A

14Services and applications for SMEs (e-commerce, education and training, networking, etc.) 5.570.400,00 1,24%

42.593,100,76%

17 Railways (TEN-T) 0,00 0,00% 0,00 N/A18 Mobile rail assets 0,00 0,00% 0,00 N/A20 Motorways 0,00 0,00% 0,00 N/A21 Motorways (TEN-T) 0,00 0,00% 0,00 N/A22 National roads 0,00 0,00% 0,00 N/A23 Regional/local roads 0,00 0,00% 0,00 N/A24 Cycle tracks 2.000.000,00 0,45% 397.514,54 19,88%25 Urban transport 0,00 0,00% 0,00 N/A27 Multimodal transport (TEN-T) 0,00 0,00% 0,00 N/A28 Intelligent transport systems 9.500.000,00 2,12% 0,00 0,00%40 Renewable energy: solar 0,00 0,00% 0,00 N/A41 Renewable energy: biomass 0,00 0,00% 0,00 N/A42 Renewable energy: hydroelectric, geothermal and other 0,00 0,00% 0,00 N/A43 Energy efficiency, co-generation, energy management 0,00 0,00% 0,00 N/A44 Management of household and industrial waste 0,00 0,00% 0,00 N/A45 Management and distribution of water (drink water) 0,00 0,00% 0,00 N/A46 Water treatment (waste water) 0,00 0,00% 0,00 N/A47 Air quality 0,00 0,00% 0,00 N/A49 Mitigation and adaption to climate change 0,00 0,00% 0,00 N/A50 Rehabilitation of industrial sites and contaminated land 0,00 0,00% 0,00 N/A51 Promotion of biodiversity and nature protection (including Natura 2000) 0,00 0,00% 0,00 N/A52 Promotion of clean urban transport 9.200.000,00 2,05% 0,00 0,00%53 Risk prevention (...) 0,00 0,00% 0,00 N/A54 Other measures to preserve the environment and prevent risks 0,00 0,00% 0,00 N/A56 Protection and development of natural heritage 2.107.740,00 0,47% 0,00 0,00%57 Other assistance to improve tourist services 0,00 0,00% 0,00 N/A58 Protection and preservation of the cultural heritage 0,00 0,00% 0,00 N/A59 Development of cultural infrastructure 0,00 0,00% 0,00 N/A61 Integrated projects for urban and rural regeneration 17.124.800,00 3,81% 1.719.757,64 10,04%

62Development of life-long learning systems and strategies in firms; training and services for employees ... 786.000,00 0,18% 0,00 0,00%

63 Design and dissemination of innovative and more productive ways of organising work 307.582,00 0,07% 1.098.696,03 357,20%

64Development of special services for employment, training and support in connection with restructuring of sectors ... 786.000,00 0,18% 0,00 0,00%

65 Modernisation and strengthening labour market institutions 643.658,00 0,14% 976.469,90 151,71%66 Implementing active and preventive measures on the labour market 1.399.051,00 0,31% 4.099.262,79 293,00%67 Measures encouraging active ageing and prolonging working lives 3.868.797,00 0,86% 0,00 0,00%68 Support for self-employment and business start-up 2.695.579,00 0,60% 79.022,22 2,93%

69Measures to improve access to employment and increase sustainable participation and progress of women ... 3.635.062,00 0,81%

2.895.704,3579,66%

70 Specific action to increase migrants' participation in employment ... 307.582,00 0,07% 0,00 0,00%71 Pathways to integration and re-entry into employment for disadvantaged people ... 2.482.215,00 0,55% 0,00 0,00%72 Design, introduction and implementing of reforms in education and training systems ... 5.931.000,00 1,32% 5.005.214,42 84,39%73 Measures to increase participation in education and training throughut the life-cycle ... 6.603.815,00 1,47% 895.196,07 13,56%

74Developing human potential in the field of research and innovation, in particular through post-graduate studies ... 3.142.515,00 0,70% 0,00 0,00%

75 Education infrastructure 0,00 0,00% 0,00 N/A76 Health infrastructure 0,00 0,00% 0,00 N/A77 Childcare infrastructure 0,00 0,00% 0,00 N/A78 Housing infrastructure 6.000.000,00 1,34% 0,00 0,00%79 Other social infrastructure 0,00 0,00% 0,00 N/A

81Mechanisms for improving good policy and programme design, monitoring and evaluation ... 804.174,00 0,18%

1.102.759,99137,13%

85 Preparation, implementation, monitoring and inspection 12.151.248,00 2,71% 2.563.777,46 21,10%86 Evaluation and studies; information and communication 3.202.227,00 0,71% 1.213.143,46 37,88%

449.018.529,00 100,00% 67.935.791,28 15,13%Total (Regional Competitiveness and Employment )

Regional Competitiveness and Employment