European Trade Union Institute, ETUI.

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Slovakia

21 February 2018

Slovakia: how to tackle regional disparities?

With a recovering labour market and thousands of new jobs created, it is often overlooked that an active labour market relies on more than economic growth. Meanwhile, long-term unemployment in certain regions stays high and the regional disparities ask for a more intensive use of development strategies and flanking reform of regional policy.

Slovakia is going through a strong recovery. In recent years, notably in 2016 and 2017, thousands of new jobs were created and the unemployment rate dropped to its lowest level since 2008. For 2018, economic experts expect another 40,000 new jobs, to be created, with the market services sector providing more than half of them.

The number of Slovaks working abroad will probably decline, while the number of foreign workers in the labour market will grow. The economy’s growth is drawn to an important extent by the improved domestic demand. Retail revenues supported by the strong labour market continued to deliver growth, and supported the relatively stable reviving of household consumption. However, several challenges remain on the labour market. The long term unemployment is still significantly high and remains among the highest levels in the EU. A related problem is the incidence of low-skilled jobseekers; low qualification represents a significant barrier.

It has been signalled that several regions and industries are now confronted with a shortage of qualified workers. With falling unemployment the number of vacancies published by labour offices is reaching historically high levels. However, the country remains in the list of  countries with the largest regional disparities in the EU, mainly due to the income and employment gap between the capital of Bratislava and the rest of the country. This is one of the reasons why the government wants to come in 2018 with a draft bill of an integrated labour market policy of regional development and of the regional development strategy up to 2030.

Another measure is the intensification of the regional support aimed at encouraging investments and creating new jobs. Besides, a consideration will be given to the adoption of an amendment to the regional development support act. Moreover, in the framework of the Catching up initiative, a regional policy program, the European Commission and World Bank will provide tailored support to a low-income region in North-East Slovakia, in partnership with the national authorities. 

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