The Carpathian Euroregion Strategy 2020 & Beyond

The Carpathian Euroregion Strategy 2020 & Beyond Annex I Country profile Slovakia Authors: Martin Angelovič, Vladimír Benč, Katarína Sirá Note: Without English language proofreading Carpathian Euroregion & Authors

Table of contents REGIONAL ANALYSIS COUNTRY PROFILE SLOVAKIA... 4 GENERAL DESCRIPTION OF THE REGION... 4 DEMOGRAPHY... 6 ECONOMY, COMPETITIVENESS AND LABOUR MARKET... 11 TOURISM, CULTURE AND LEISURE... 22 ENVIRONMENT, CLIMATE CHANGE, ENERGY, RISK MANAGEMENT... 26 MIGRATION, BORDERS & SECURITY... 29 EDUCATION... 33 HEALTH AND SOCIAL AFFAIRS... 35

Table of maps, charts & figures Map 1 Location of region (Eastern Slovakia: Košice & Prešov) in Slovakia... 4 Tab 1: Inhabitants & Urbanisation (y. 2014)... 4 Tab 2: Level of urbanisation in Slovak regions (in %)... 5 Tab 3: Change in population and population density (2001, 2014)... 6 Chart 1: Population growth in the Eastern Slovakia regions in the last 45 years (number of inhabitants)... 6 Tab 4: Migration balance... 6 Tab 5: Population density (persons per square kilometre)... 7 Chart 2: Distribution of the population according to age groups (y. 2014)... 7 Tab 6: Ageing index and dependency ratio (y. 2014)... 7 Map 2: Per-centual share of Roma in municipalities (expert estimate)... 8 Tab 7: Roma population in Slovakia and its regions... 9 Tab 8: Nationalities living in Slovakia... 9 Tab 9: Population by nationality as at Dec. 31, 2013... 10 Chart 3: Regions share of national indicators (%)... 11 Tab 10: Gross domestic product (GDP) at current prices (2001, 2013)... 11 Tab 11: Comparison of GDP contribution per capita to EU 28 countries average in %, level NUTS 2... 11 Tab 12: Biggest companies in Košice and Prešov region in 2012 according to turnover... 13 Tab 13: Regional proportion in foreign direct investments, in % of the SR... 15 Tab 14: Legal business units by selected legal forms as at Dec. 31, 2013... 15 Map 3: Number of enterprises per 1000 inhabitants (2013)... 15 Tab 15: Number of active enterprises by staff categories (2013)... 16 Tab 16: Industrial parks in the Eastern Slovakia... 16 Tab 17: R&D indicators universities & companies (2013)... 18 Tab 18: Economically active population (2013)... 18 Chart 4: Labour market indicators (2013)... 18 Tab 19: Economic activity rate (2013)... 19 Tab 20: Rate of registered unemployment (in %)... 19 Map 4: Rate of registered unemployment in Slovak districts by the end of 2013... 20 Map 5: National parks and protected natural areas in the Slovak Republic... 22 Tab 21: Basic indicators of tourism in the region... 23 Chart 5: Number of accommodation establishments... 24 Chart 6: Number of visitors... 24 Chart 7: Number of overnight stays by visitors... 25 Map 6: Natura 2000 sites in the Eastern Slovakia (2015)... 26 Tab 22: Public utilities indicators (2013)... 27 Tab 23: Relative indicators of treatment with municipal waste... 27 Tab 24: Emissions indicators... 27 Tab 25: Number of persons and vehicles legally crossed Slovak-Ukrainian border in 2010 2014... 30 Tab 26: Dynamics of issued LBT permits for Ukrainian inhabitants of border areas (number)... 32 Tab 27: Dynamic of issued C Schengen visas by consulates of HU, PL and SK in Ukraine (number)... 32 Tab 28: Kindergartens and basic schools (2013)... 34 Tab 29: Grammar and secondary vocational schools... 34 Tab 30: Universities... 34 Tab 31: Selected age indicators of population by sex... 35 Tab 32: Health care indicators (2013)... 36 Tab 33: Social service facilities and their capacity... 36

Regional analysis country profile Slovakia General description of the region The Slovak part of the CE area consists of two regions in Slovakia: Prešovský samosprávny kraj (Prešov region - NUTS III) and Košický samosprávny kraj (Košice region NUTS III). These two regions form NUTS II region of the Eastern Slovakia. Area of the Eastern Slovakia is 15 729 km 2, representing 32% of Slovakia s territory. In DEC 2014, the region had 1 613 672 inhabitants, representing 29,8% of the country population. The region is located in the Eastern part of the country, bordering with Poland, Ukraine and Hungary. Map 1 Location of region (Eastern Slovakia: Košice & Prešov) in Slovakia Source: Adin, s.r.o., Prešov In the region of Eastern Slovakia there are 1 105 municipalities including 40 cities. The distribution of the municipalities is uneven and the high number of small villages is located esp. in the north-eastern part of region. These rural areas typically face complex economic, social and even administrative problems (poverty, outmigration, deficiencies in public & private services, etc.). Area / Indicator Tab 1: Inhabitants & Urbanisation (y. 2014) Population (person) Population density (person /km²) Total number of municipalitie s 0 199 200-499 500-999 1000-1999 2000-4999 5000-9999 10000-19999 20000-49999 Slovak Republic 5 415 949 110,5 2 890 394 744 762 575 280 63 33 29 10 Eastern Slovakia 1 613 672 102,7 1 105 202 338 289 166 76 16 8 7 3 Prešov region 818 916 91,3 665 167 199 150 85 45 7 6 4 2 Košice region 794 756 117,7 440 35 139 139 81 31 9 2 3 1 Source: Authors calculation based on data by the Statistical Office of the SR (2015. Regional capitals are the most populated in the region (city of Prešov 90 187 inhabitants and city of Košice - 239 464) and play central role within the region regarding economy and public services. The 50000 +

largest city in the region is Košice, forming an important economic centre in the Eastern Slovakia. Košice is the second largest city in Slovakia. Other big cities in the region are Poprad (54,3 ths. inhabitants), Michalovce (39,3 ths.), Spišská Nová Ves (37,9 ths.), Humenné (34,6 ths.) and Bardejov (33,3 ths.). The level of urbanisation is different in Košice and Prešov region. Prešov region is below the Slovak average, not more than 49% of inhabitants are living in the cities. The paradox of the last 10 years in the Slovakia is, that the level of urbanization is decreasing, which in contrary to previous hundreds of years. A lot of people from towns are now moving to near-by villages to enjoy more comfortable living in houses rather than living at blocks of flats. Tab 2: Level of urbanisation in Slovak regions (in %) Region (NUTS III) / year 2004 2007 2010 Bratislava 83,36 82,62 81,71 Trnava 49,57 48,79 48,13 Trenčín 57,36 56,99 56,41 Nitra 47,47 47,02 46,47 Žilina 50,84 50,47 49,90 Banská Bystrica 53,97 53,64 53,21 Prešov 49,25 49,40 48,76 Košice 56,27 55,89 55,39 Slovak Republic 55,55 55,21 54,68 Source: Statistical Office of the SR (2013) Main needs and challenges The location of the region within the country and EU is very peripheral (Eastern border of the EU), which emphasize the importance of cross-border cooperation. The area can be characterized as mainly rural with a few important large cities accompanied by a number of smaller cities. The majority of the population centres in and around the capitals esp. in case of Košice region and bigger cities in case of Prešov. Area is characterised by existence of plenty small villages (with max 500 inhabitants) that face development problems related to lack of own money and investment. Rural areas face complex development, economic and social problems (poverty, outmigration, deficiencies in services and access to public infrastructure, etc.). Large development problem in the region is the high concentration of Roma settlements with non-existent technical infrastructure and concentration of social problems that requires huge effort to solve. Main potentials Development of agglomerations such as Košice-Prešov, Humenné-Michalovce, Poprad-Svit and other. The competitive regional seats and bigger cities such as Poprad, Humenné, Spišská Nová Ves and Michalovce can function as engines of the development in the whole area. The extensive network of small- and medium-sized towns offers a wide range of (public) services for their catchment area, and they can stimulate cross-border cooperation in various sectors. Rural areas can preserve the natural values and the traditional way of life. They can be revaluated as potential residence for various groups, e.g. qualified urban youth, elderly people. Their attractiveness can be used as a basis for development of tourism and traditional industries like forestry, agriculture.

Demography The Eastern Slovakia is inhabited by slightly more than 1,6 million people representing 29,8 % of country inhabitants. Concerning the population change, positive tendency is experienced in the region. Between 2001 and 2014 the population increased by 3,8 %, because of positive birth rate (natural increase) and despite the outmigration. Tab 3: Change in population and population density (2001, 2014) Population density Population (person) (person/km²) Change (%) 2001 2014 2001 2014 Slovak Republic 5 402 547 5 415 949 109,7 110,5 0,72% Eastern Slovakia 1 554 739 1 613 672 98,9 102,7 3,84% Prešov region 787 483 818 916 88,0 91,3 3,75% Košice region 767 256 794 756 113,5 117,7 3,70% Source: Statistical Office of the SR (2015 Chart 1: Population growth in the Eastern Slovakia regions in the last 45 years (number of inhabitants) 850 000 800 000 750 000 700 000 650 000 600 000 550 000 1970 1980 1991 2001 2011 2014 Prešov region Košice region Source: Author, Statistical Office of the SR (2015) Outmigration is quite a big problem of the region. Through the last 14 years, region is losing a lot of inhabitants, esp. young people. Outmigration is connected to brain-drain phenomenon. In total, the Eastern Slovakia lost more than 21 ths. people in the last 14 years via outmigration. Tab 4: Migration balance 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Slovak Republic 1012 901 1409 2874 3403 3854 6793 7060 4367 3383 2966 3416 2379 1713 Eastern Slovakia -714-1475 -1209-1538 -1393-1408 -1676-1881 -1224-1714 -1914-1443 -1569-2128 Prešov region -626-1144 -1123-1292 -1124-876 -1149-1246 -1066-1241 -1421-1062 -1106-1568 Košice region -88-331 -86-246 -269-532 -527-635 -158-473 -493-381 -463-560 Source: Statistical Office of the SR (2015)

The population density of the Prešov region is much lower than the national and the EU28 average (cc. 116 people/km²), which justifies the rural character of the region. On-the-other-side, Košice region is above the average, mostly thanks to the city of Košice. Population density with growing number of inhabitants is slowly growing the whole Eastern Slovakia and is closing gap to national and EU average. Tab 5: Population density (persons per square kilometre) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Slovak Republic 109,7 109,7 109,7 109,8 109,9 110,0 110,1 110,3 110,5 110,8 110,1 110,3 110,4 110,5 Eastern Slovakia 98,9 99,1 99,3 99,6 99,8 100,0 100,2 100,3 100,6 101,0 102,2 102,4 102,5 102,7 Prešov region 88,0 88,2 88,4 88,7 88,9 89,1 89,3 89,5 89,8 90,1 90,8 91,0 91,2 91,3 Košice region 113,5 113,6 113,8 114,1 114,2 114,4 114,6 114,7 115,0 115,4 117,2 117,5 117,6 117,7 Source: Statistical Office of the SR (2015) Regarding distribution of population according to age groups, the region is much more younger than the Slovakia and EU average. Region has currently very favourable age structure with a high share of children (below 15 years old) and economic active population. Chart 2: Distribution of the population according to age groups (y. 2014) Košice region Prešov region Eastern Slovakia Slovak Republic 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0-14 15-64 65 + Source: Statistical Office of the SR (2015). The value of ageing index shows the ratio of population between 0-14 years and the population of over 65-year-old people. The dependency rate is the number the child and the old-age population as a percentage of population aged 15-64. Regarding these data, the intraregional dissimilarities are very significant when compared to national level. Ageing index is in the whole region much distant from the national average, which is good for the region. The positive is very high youth dependency rate, and on the other hand, region is currently not having big troubles with ageing, while this problem will come to region in a next decade. Tab 6: Ageing index and dependency ratio (y. 2014) Youth Aging index dependency rate Old-age dependency rate Total dependency rate Slovak Republic 91,17 21,65 19,74 41,38 Eastern Slovakia 70,86 25,13 17,81 42,94 Prešov region 67,47 25,69 17,33 43,02

Košice region 74,51 24,56 18,30 42,86 Source: Authors calculation, Statistical Office of the SR (2015) One of the biggest development problems of the Eastern Slovakia is the integration and social development of the Roma population. Most of Roma people live in the countryside, in a rural environment, generally in segregated residential areas, in poor housing conditions. But also in cities are large and crowded segregated districts with high ratio of Roma. Their employment rate is well below the national average and very high and long-term unemployment is registered among Roma for last 2 decades. It is coupled with an extremely poor state of health, a low educational level, and high risk of poverty. Segregation and discrimination are simultaneously the cause and consequence of these processes. In other words, it is a cyclically regenerated phenomenon that is passed down from one generation to the next. Map 2: Per-centual share of Roma in municipalities (expert estimate) Source: Matlovičová, K., Atlas of Roma Communities in the Slovak Republic (2013). The Atlas of Roma Communities in Slovakia 2013 1 estimates Roma population of 402 840, (those who are generally considered as being Roma) in Slovakia. According to the census by the Statistical Office SR by 31.12.2011, the total population of Slovakia was 5 404 322 inhabitants thus the share of Roma is 7,45 %. 187 285 Roma lives mixed among majority (46,5 %), 51 998 Roma live in settlements inside the municipality (12,9%), 95 971 Roma live in settlements on the edge of the municipality (23,8 %) and 68 540 Roma live in segregated settlements (17,0 %). 1 070 municipalities were identified in Slovakia where the Roma lives. 1 UNDP (2014): ATLAS rómskych komunít na Slovensku 2013. Bratislava. ISBN: 978-80-89263-18-9. Electronic version available at: http://www.minv.sk/?atlas_2013

Tab 7: Roma population in Slovakia and its regions Region Number of municipalities Number of municipalities with Roma % share of Roma settlements in the number of municipalities in the region % share of total municipalities with Roma in Slovakia Number of Roma in region (expert estimate) Slovak Republic 2 890 1 070-37,0 402 840 Bratislava 73 27 37,0 2,5 14 142 Trenčín 276 41 14,9 3,8 8 598 Trnava 251 76 30,3 7,1 20 936 Nitra 354 134 37,9 12,5 30 552 Žilina 315 27 8,6 2,5 8 811 Banská Bystrica 516 266 51,6 24,9 78 919 Prešov 665 243 36,5 22,7 126 675 Košice 440 256 58,2 23,9 114 207 Source: Authors calculation, Atlas of Roma Communities in the Slovak Republic (2013). High share of Roma has poor connection to public utilities. In Roma settlements, there are 21 168 dwellings, of which 1 531 apartment houses with 10 411 apartments (most of them in very bad technical conditions), 986 unfinished bricked houses, 3 679 bricked houses and 400 wooden houses are not registered in cadastre, 4 134 shacks, and 528 prefabricated cabins. Only 8 722 bricked houses and 196 wooden houses are registered in cadastre. Out of all Roma dwellings water pipeline can be used by 73 % households, but only 59 % households in practice use it, since needed payments for that. 11 % Roma households are without access to running water or use non-standard sources (springs, brooks, etc.). 45 % dwellings in Roma settlements are not connected at all to sewage, cesspool or domestic wastewater treatment equipment and 451 settlements in 363 municipalities are not equipped with public sewage. The worst situation is in the 14 Roma settlements that are without any access to public infrastructure, without electricity, water, sewage systems or gas. All these 14 settlements are located more than 1,3 km from the village. Access to social and health services is also bad, however situation is in the last years getting better. In 125 municipalities, there are community centres, in 66 municipalities are hygienic centres. In 81 municipalities are church parishes and in 279 municipalities is a regular field social work with Roma. When speaking about other nationalities living in Slovakia, the highest share has the Hungarian minority, which lives mostly in the south of Slovakia. However, share of Hungarians living in Slovakia is falling down, from almost 11 % in 1991 to 8,5 % in 2011. Tab 8: Nationalities living in Slovakia Ethnic census 1991 census 2001 census 2011 group Number % Number % Number % Slovaks 4 519 328 85,7 4 614 854 85,8 4 352 775 80,7 Hungarians 567 296 10,8 520 528 9,7 458 467 8,5 Roma* 75 802 1,4 89 920 1,7 105 738 2,0 Czechs 59 326 1,1 44 620 0,8 30 367 0,6

Ruthenians 17 197 0,3 24 201 0,4 33 482 0,6 Ukrainians 13 281 0,3 10 814 0,2 7 430 0,1 Others/undeclared** 22 105 0,4 74 518 1,4 408 777 7,5 Total 5 274 335 5 379 455 5 397 036 Source: Authors calculation, Statistical Office of the SR (2015). Note: * - Roma usually declares themselves in census as Slovaks or Hungarians, so there is big discrepancy between the census data and real situation e.g. provided in Atlas of Roma Communities. ** - A lot of people refused to provide data in the last census, therefore there is high share of undeclared people in the census 2011. And many young people declared very strange nationality, e.g. Indian, Eskimo, Jedi etc. Eastern Slovakia is very multinational region. And even within its territory, there are big differences of minority s settlements. Only few Hungarian minority lives in the Prešov region, while almost 75 ths. lives in Košice region. Most of Ruthenians and Ukrainians live in north-east of the Prešov region, while only few in Košice region. Region is also specific by German nationality, while several towns and villages were in 12-14 century inhabited by Germans. And German communities live in smaller numbers in some towns (esp. in Spiš region) till these days. In the north part of the Prešov region, there is also strong Polish community, however, not as big as e.g. Ruthenian and Ukrainian community. Tab 9: Population by nationality as at Dec. 31, 2013 Total Slovak Hungarian Roma Czech Ruthenian Ukrainian German Polish Slovakia 5 415 949 4 388 234 458 038 107 915 37 702 32 344 8 576 6 925 5 644 Eastern Slovakia 1 613 672 1 264 023 74 952 82 257 7 194 30 764 5 869 2 293 1 718 Prešov region 818 916 677 042 722 43 767 3 308 27 754 3 887 683 1 072 Košice region 794 756 586 981 74 230 38 490 3 886 3 010 1 982 1 610 646 Source: Authors calculation, Statistical Office of the SR (2015). Main needs and challenges Selective outmigration and ageing of society slowly reduces the labour force in the region causing competitive disadvantages for the future. The high number of early school leavers erodes long-term the labour market potential of the region. This is esp. in case of Roma people. The proportion of Roma population is significant in the entire area, with some internal differences. Given that the majority of Roma families live under the poverty threshold, this is a major and long-term development and social risk not only for the Eastern Slovakia area. Main potentials The area has a major contribution to the whole population of Slovakia, representing 29,8 % of the total number of inhabitants. The natural growth of population is very high compared to EU and Slovakia average, which creates positive situation also for next decades, while the high share of working-age population can make region very competitive. Region is multinational that can be very positive factor for CBC development.

Economy, competitiveness and labour market The GDP shows low economic performance of the region: the proportion of the population in the total area of Slovakia (29,8 %) exceeds the share of the region regarding GDP (20,5 %). The difference is particularly large in case of Prešov region, while it represents 15,1 % of Slovakia s population, but GDP share is only 9 %. Chart 3: Regions share of national indicators (%) 35,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 Eastern Slovakia Prešov region Košice region GDP/PPS Population Area Source: Authors calculation, Statistical Office of the SR (2015) Tab 10: Gross domestic product (GDP) at current prices (2001, 2013) Regional GDP per capita (PPS) Regional GDP in meur (PPS) 2001 2013 Change % 2001 2013 Change % Slovak Republic 10 498,83 20 008,98 90,6 56 478,76 108 308,69 91,77 Eastern Slovakia 8 049,84 13 752,97 70,8 12 529,26 22 175,60 76,99 Prešov region 6 408,91 11 917,29 85,9 5 064,86 9 749,41 92,49 Košice region 9 742,40 15 643,54 60,6 7 464,40 12 426,18 66,47 Source: Statistical Office of the SR (2015). Regarding the GDP per capita values, the region is well under the EU28 (26,500 euro PPS source: Eurostat, 2012) and the national average as well. GDP contribution of an inhabitant of Eastern Slovakia is 51% compared to EU average of 28. This indicator is the worst even in comparison to other Slovak regions. The last fifteen years have brought positive changes and economic growth across all Slovak regions, making Slovakia converge upon the EU countries average. However, the ratio of growth is influenced by north-eastern gradient, whilst Bratislava region belongs to the most progressively developing EU regions, Eastern Slovakia shows the slowest growth of all Slovak regions. Being compared to many other European regions, Eastern Slovakia growth is nevertheless positive. Tab 11: Comparison of GDP contribution per capita to EU 28 countries average in %, level NUTS 2 Region NUT 2 / year 1996 2000 2004 2007 2008 2009 2010 2011 Growth Prague (CZ) 128 139 163 177 175 176 173 171 +43 Middle Moravia (CZ) 65 58 62 64 64 67 66 67 +2 Chemnitz (GE) 81 77 81 83 81 80 84 86 +5 Stuttgart (GE) n.a. 143 139 141 142 133 145 152 +9

Észak-Magyarország (HU) 36 35 41 39 40 40 40 40 +4 Wien (AT) n.a. 182 170 161 162 164 165 165-17 Mazowiecke (PL) n.a. 74 78 87 89 97 103 107 +33 Podkarpackie (PL) 34 34 35 37 39 41 42 44 +10 Malopolskie (PL) n.a. 42 43 47 49 52 54 56 +14 Slaskie (PL) n.a. 52 57 58 61 66 68 70 +18 Bratislava region 104 109 129 160 167 178 179 186 +84 Western Slovakia 48 47 54 66 69 68 69 72 +24 Central Slovakia 41 41 47 54 59 58 61 59 +18 Eastern Slovakia 38 38 42 46 51 49 50 51 +13 Source: Authors calculation based on EUROSTAT (2014) statistics. Seeing Eastern Slovakia as an entity, internal differences must be concerned. On the one hand, urban areas such as Košice, Prešov, Poprad or Humenné possess considerable growth potential, on the other hand there are remote or almost empty territories, predominantly in the border region, without developed infrastructure and job opportunities for young people. Several smaller settlements (e.g. Kechnec, Stará Ľubovňa, Lipany) represent examples of creating good conditions for investments, resulting in an employment growth and economic efficiency. Reasons why Eastern Slovakia lags behind vary. The first one reflects the territory character and location influencing the territory development for a long time. Until socialistic industrialisation, Eastern Slovakia used to be predominantly agricultural country without large or important industrial plants. Later the differences disappeared, but time showed that establishing large industrial plants to create employment for entire districts was a big disadvantage after transition to market economy. Moreover, Eastern Slovakia is typical of low density of large urban areas and disintegrated settlement structure created by a large number of small villages. Another influential development element arises from melancholy character of the neighbouring countries border regions. Those ones are the least developed regions of Hungary, Poland and Ukraine so their economic power, potential and cooperation have a very little capacity to be economic development stimuli. The existence of Schengen border as a considerable barrier, an eccentric, remote location and lack of transport infrastructure (logistic market connection) make Eastern Slovakia non-competitive and lagging behind. The region s economic structure transformation in process and low domestic or foreign investments flow-in cause problems, too. Eastern Slovakia takes only 19,8 % share in Gross Added Value of the SR (the year of 2011). Košice region is more industrial. Its share in regional economy accounts for 28, 5%, the share in Prešov region accounts for 21,3 %; 26,5 % is the Slovak republic s average. This time, wholesale, retail, transport, accommodation and catering services with the share of 22,1 % of regional economy represent the most outstanding economic branches in Prešov region. Construction industry takes 14,1 % share. Compared to the Slovakia s average, the share of administration, social services, defence and education in regional gross added value is above the average, namely 16,4 %. Agriculture also takes above-average share of 4,2 % (the SR 2,6 %). However, Košice region with better agricultural production conditions accounts for the regional economy share of 2,6 %. Taking into account the economy of Košice region, it is not only above-average compared to national standard, but also considerably growing ICT sector with a 5,9 % of the regional economy in 2011 and being high above the national average. Construction industry accounts for 9,4 % of the economy in Košice region, being close to Slovak average of 9,1 %. Financial and insurance business takes lower share in

economy of both regions (2,3 % in Prešov region and 2,1 % in Košice region) than is the national average: 3,6%. The main sectors in Prešov region include the food processing, chemical, mechanical engineering and textile industries. With the exception of the chemical industry, all the other industries are evenly spread throughout the region. The chemical industry is represented by few big companies in the Humenné and Poprad districts (esp. Town Svit). The electro technical industry once played a major role in the past with a share that exceeded the national average, but this has changed since several foreign companies have now invested into electrotechnics in other regions of Slovakia. The main sectors in Košice region include metallurgy and the chemical, mechanical engineering and electrotechnical industries. The most dominant industry is metallurgy, which accounts for 60% of the region's industrial production and 50% of its exports. U.S. Steel Košice is the biggest company in the region in the metallurgy sector. The three other mentioned sectors are export-oriented as well. ICT sector is currently being on a strong growth. Tab 12: Biggest companies in Košice and Prešov region in 2012 according to turnover Company Name Country of Turnover Number of Origin (mil ) Employees Sector District Košice region U. S. Steel Košice USA 2 350 10 500 steel sheets Košice Getrag Ford Transmissions Germany 316,7 950 gear boxes Košice Embraco Slovakia Brazil 223,5 2 040 Spišská Nová compressors Ves U-Shin Slovakia Netherland / 137,7 1 818 Košice automotive parts Germany Panasonic AVC Networks Japan 125,5 650 digital electronics Krompachy Magneti Marelli Slovakia Italy 105,8 700 instrument clusters Košice for car T-Systems Slovakia Germany 96,0 2 892 IT service Košice Syráreň BEL Slovensko France 77,7 486 cheese Michalovce Inžinierske stavby France / Slovakia 76,6 950 construction Košice Eurovia France / Slovakia 70,6 550 construction Košice Unomedical Denmark 45,4 800 medical products Košice IEE Sensing Slovakia Luxembourg 32,9 530 sensing systems Košice Jobelsa Slovensko Spain 27,2 230 seats Košice /automotive Eurocast Košice Germany 21,7 230 precision metal Košice casting Yazaki Wiring Technologies Japan 19,6 3 266 cable beams Michalovce Kosit Italy / Slovakia 15,5 390 waste management Košice SEZ Krompachy Slovakia 13,3 330 electrical engineering Krompachy Howe Slovensko Australia 7,5 631 seats /automotive Košice Prešov region Whirlpool USA 245,0 1 329 Mechanical Poprad engineering Tatravagónka Slovakia 173,3 2 170 Railway vehicles Poprad MECOM Humenné Slovakia 152,4 1 288 Food processing Humenné Lear Corporation Seating United Kingdom 144,6 1 100 Prešov Automotive Slovakia / Luxembourg Milk-Agro Slovakia 109,1 1 300 Dairy products Prešov Pivovary Topvar Austria 107,6 645 Production of drinks Veľký Šariš Chemosvit Fólie Slovakia 96,7 947 Foil production Svit BUKÓZA Export-Import Slovakia 96,5 47 Wholesale Vranov nad

Topľou Merkury Market Slovakia Poland 95,7 916 Wholesale Prešov Coop Laterod Slovakia 87,1 - Administrative and Prešov support services GGP Slovakia Italy 84,9 529 Manufacture of Poprad garden equipment Nexis Fibers Switzerland 79,6 348 Automotive Humenné SYNOT TIP Czech Rep. 77,6 50 Arts, entertainment Poprad and recreation MECOM GROUP Slovakia, Czech 75,8 740 Humenné Food processing Rep. and Cyprus STD DONIVO Slovakia 75,0 815 International road Vranov nad transport Topľou Tatranská mliekareň Slovakia 73,9 196 Food processing Kežmarok OKTAN Slovakia 66,7 54 Wholesale Kežmarok BUKOCEL Slovakia 65,8 406 Vranov nad Paper making Topľov TERICHEM Slovakia, Finland 57,9 280 Rubber processing Poprad Tatramat Germany 57,0 247 Electrotechnical Poprad engineering Source: SARIO (2013). Regional economy productivity is also looked upon via two important industrial indicators: incomes for own labour and products, and labour productivity coming out of them. Total incomes in Slovak industry in the year of 2012 constituted the sum of 82 billion. According to statistics, 36,5 % of Žilina region taking 14 % share of entire Slovakia industrial income. The sum of 7,6 billion, and 9,3 % share in the SR represented the industrial income in Košice region in 2012. Prešov region produced only 3,3 billion of industrial income, thus accounting for less than 4 % of entire Slovakia income. As for labour productivity, the situation is even worse. In 2012, the labour productivity of Bratislava region industry was 5,5 times higher than in Prešov region, and 2,9 times higher than in Košice region. Average labour productivity reached 168,3 thousand per person in the SR industry in 2012. However, in Bratislava region, it reached up to 399,1 thousand, in Žilina region 194,4 thousand, in Košice 135,7 thousand, but in Prešov region only 72,5 thousand. The very Žilina region accomplished the most dynamic labour productivity growth in past 5 years, namely 61,3% in total for 5 years. In 2008, the labour productivity level in Košice and Žilina regions was the same. In spite of the productivity growth in Košice region by 16 % in 5 years, the index of 1,43 represents Žilina and Košice regions labour productivity these days is still growing evenly. To complete the survey, labour productivity must be stated as increasing by as many as 17,9% in Prešov region during past 5 years, so Prešov region is approaching the standard of the last but one region, namely Banská Bystrica region (74,0 thousand ). The total volume of direct foreign investments (FDI) in the SR reached the sum of 39,6 billion as per 31 December 2011. As many as 28,8 billion of it, i.e. 67,6 % was directed to Bratislava region. Košice region with the volume of 2,6 billion by FDI took 6,6 % proportion, but it is considerably winding down. Prešov region with the 0,9 % proportion and the volume of 0,4 billion by FDI in the SR is even worse. Such a low proportion of investments is limiting to the regional economy infrastructure modernisation and is one of the factors for lagging behind.

Tab 13: Regional proportion in foreign direct investments, in % of the SR Region 1997 2011 Bratislava 66,8 67,6 Trnava 5,4 7,0 Trenčín 4,1 4,7 Nitra 3,1 4,0 Žilina 4,7 6,6 Banská Bystrica 2,9 2,5 Prešov 2,1 0,9 Košice 10,8 6,6 Source: Authors calculation based on National Bank of Slovakia data (2013). The number of active enterprises has been growing, while the number of natural person doing business has been decreasing as a consequence of the last (2012-2013) changes in tax, deduction and accounting reporting system. Many of self-employed persons established companies (mostly limited liability companies). The number of the enterprises in the area is 34,5 ths., self-employed persons 95,3 ths. Tab 14: Legal business units by selected legal forms as at Dec. 31, 2013 Slovak Republic Eastern Slovakia Prešov region Košice region 2009 2013 2009 2013 2009 2013 2009 2013 Enterprises 127 409 181 914 25 373 34 508 12 077 16 299 13 296 18 209 Natural persons (selfemployed persons, farmers and freelancers) 413 867 382 213 102 925 95 297 60 066 55 453 42 859 39 844 Source: Authors calculation, Statistical Office of the SR (2015). The number of enterprises per thousand inhabitants is far below the national averages and the values show certain intraregional disparities, esp. at the district level. If not counting Košice, all districts in Košice region have maximum 15 enterprises per 1000 inhabitants. Little bit better situation is in Prešov region, where 4 districts have maximum 30 enterprises per 1000 inhabitants. Map 3: Number of enterprises per 1000 inhabitants (2013) Source: Statistical Office of the SR (2015).

Most of the enterprises located in the area are small and medium enterprises. There 111 enterprises in the area that employing more than 250 employees. Support of the SMEs cooperation is therefore very essential for the development of the regional economy of the Eastern Slovakia. Local businesses are characterized by limited competitiveness, lack of own capital, weak or none R&D and difficult access to international markets. Tab 15: Number of active enterprises by staff categories (2013) Enterprises with the number of employees Region 250 and 0 19 20 49 50 249 more Slovak Republic 174 340 4 290 2 660 624 Eastern Slovakia 33 048 858 491 111 Prešov 15 545 435 262 57 Košice 17 503 423 229 54 Source: Statistical Office of the SR (2015). The business infrastructure of the region primarily consists of industrial parks and business incubators. In the region there are 28 registered industrial parks. Most of them received governmental or EU funds support to develop infrastructure within the park. However, when looking at the business infrastructure, it is essential to investigate the occupancy rate of these facilities. While there are numerous industrial parks in the area that operates with a high occupancy rate (some of them are actually full); most of them, however, are characterized by low utilization rate the main reasons include poor location and connection to highway or railway, low levels or absence of services that assist industrial operation and attract businesses. The location, the accessibility as well as the availability of quality workforce are clearly all essential preconditions for companies that intend to settle in an area. But in case of Eastern Slovakia, also other factors play a crucial role for attracting investors. Such case is e.g. industrial park in small village Kechnec, which is at the same time the largest park in the eastern Slovakia. Prešov region (if not counting city of Poprad located under High Tatras and with access to highway) has big troubles to get investors into its industrial parks. Košice region is more successful, if not counting some towns like Rožňava or Strážske. Tab 16: Industrial parks in the Eastern Slovakia Industrial park city/town IP Area (in ha) Available area (in ha) type of IP Region Prešov Poprad - Matejovce Poprad 14 0,0 GF Vihorlat Snina Snina 80 30,0 BF Industrial Park Lipany Za traťou Lipany 8,5 1,8 GF Industrial Zone Kežmarok Kežmarok 27 10,0 GF Industrial Zone Chemes Humenné Humenné 64 8,7 BF Prešov - Záborské Prešov 26 18,0 GF Industrial Park Ferovo Vranov nad Topľou 16,9 16,9 GF Industrial Park Levoča Levoča 12 8,5 BF/GF Industrial Park Bardejov Bardejov 72,3 30,0 BF/GF Industrial Park Medzilaborce Medzilaborce 4,75 4,75 GF Region Košice Industrial Park Trebišov Trebišov 10 2,2 BF Industrial Park Michalovce I. Michalovce 14,2 0,0 BF Industrial Park Michalovce II. Michalovce 7,6 7,6 GF

Industrial Park Kechnec Kechnec 332 160,0 GF Industrial Zone Strážske Strážske 75 11,9 BF/GF Industrial Park Rožňava Rožňava 15,9 1,3 GF Industrial Park Sobrance - Bunkovce Bunkovce 104 104,0 GF Industrial Zone SNV - Podskala Spišská Nová Ves 5,6 5,0 GF Industrial Park Gelnica Gelnica 0,32 0,18 BF Industrial Zone Kráľovský Chlmec - Cerovo Kráľovský Chlmec 37 37,0 GF Industrial Park Moldava nad Bodvou Moldava nad Bodvou 65 63,0 BF/GF Industrial Park Cestice Cestice 105 105,0 GF Industrial Park Veľká Ida Veľká Ida 29,4 9,7 GF Industrial Park Veľké Kapušany Veľké Kapušany 20,9 20,9 GF Industrial Park Švedlár Švedlár 2,8 2,8 BF Industrial Park Kojšov Kojšov 0,9 0,9 BF Industrial Park Jaklovce Jaklovce 2,1 1,2 BF Industrial Park Krompachy Krompachy 2,1 2,1 BF Industrial Park Pereš - Košice Košice 180 80,0 GF Source: SARIO (2013). Business incubators serve to strengthen the local businesses, to help SMEs. The first incubators were established in the early 1990s (mainly with the support of the European Union s PHARE programme and government subsidies). There are a small number of positive examples business incubators that became self-sustaining. The actual number of business incubators in the region is about 10 to 15. The currently operating incubators mainly attract start-up enterprises; on the other hand, there is a lack of business incubators that could support technology transfer processes and help the technology development of SMEs. The other intermediaries that are helping businesses in several ways are the Slovak Chamber of Commerce and Industry with its regional offices, Regional Advisory and Information Centres, Business Innovation Centres and Innovation Partnership Centre. Also Regional Development Agencies that are supported by the Ministry of transport, construction and regional development of the SR are implementing several projects aimed at development of the economic development of the region. Few touristic clusters are established in the region, but they are not very active. Among the clusters, there are 3 very active clusters: Cluster for automation technology and robotics (Cluster AT+R) active in both Košice and Prešov regions, ICT cluster (IT Valley) active in Košice region and energy cluster active in Prešov region. Generally, their (intermediaries and incubators) competences, capacities and esp. available resources are very limited, so impact of their existence and activities on the economy of the area is rather limited, yet. Research, technological development and innovation (RTDI) are key segments of any region s development. Despite its distance from the country centre the area has a vivid academic life. Four major universities can be found in the area (University of Prešov in Prešov, Technical University in Košice, University P.J. Šafárik in Košice, and University of Veterinary Medicine and Pharmacy in Košice) accompanied by another private universities and colleges of universities managed from other Slovak regions (e.g. Faculty of business administration in Košice of the Economic University in Bratislava). Teachers of universities and colleges play an important role in RTDI. Number of R&D units, personnel and expenditure shows an increase in the last years, but also huge intraregional disparities esp. at national level with huge dominance of Bratislava region.

Tab 17: R&D indicators universities & companies (2013) Of which: R&D employee Supporting Researchers Technicians s total staff Expendit ures on R&D in total (ths. EUR) Capital expenditures in total (ths. EUR) Of which: Current expenditure s in total (ths. EUR) Of which financed by the state budget Slovak Republic 27 823 24 441 2 425 957 610 876 97 300 513 576 237 616 Eastern Slovakia 5 123 4 569 374 180 88 233 18 980 69 253 41 073 Prešov 1 196 1 048 95 53 19 813 3 323 16 490 9 445 Košice 3 927 3 521 279 127 68 420 15 657 52 763 31 628 Source: Authors calculation, Statistical Office of the SR (2015). Labour market The total number of active population in the Eastern Slovakia reached 767 ths. in 2013. However, the labour market data show very unfavourable picture, in general. More than 140 ths. of the economically active population of the region were unemployed at the end of 2013. The women has worse access to the labour market then the men. Tab 18: Economically active population (2013) Economically active population Employed of which Unemployed Total Men Women Total Men Women Total Men Women Slovak Republic 2 715,3 1 505,8 1 209,5 2 329,3 1 295,3 1 034,0 386,0 210,4 175,6 Eastern Slovakia 766,9 433,2 333,6 625,4 354,0 271,4 141,5 79,3 62,2 Prešov region 391,8 223,9 167,9 320,3 183,5 136,9 71,5 40,5 31,0 Košice region 375,1 209,3 165,7 305,1 170,5 134,5 70,0 38,8 31,2 Source: Statistical Office of the SR (2015) The activity rate of population aged 15-64 shows a much lower number (57,9 %) than the EU average (71,9 %). The same is true in terms of the employment rate: in the region reaches 55 %, while the EU28 value is 64 %. The gap is very high in case of unemployment rate: 18,4 % compared to 10,8 % in the EU28. Chart 4: Labour market indicators (2013) 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 Slovak Republic Eastern Slovakia Prešov Košice Economic activity rate Employment rate 15-64 Unemployment rate

Source: Authors calculation, Statistical Office of the SR (2015). Tab 19: Economic activity rate (2013) Economic activity rate Employment rate 15-64 Unemployment rate Total Men Women Total Men Women Total Men Women Slovak Republic 59,3 68,1 51,0 59,9 66,4 53,3 14,2 14,0 14,5 Eastern Slovakia 57,9 67,3 49,0 55,0 61,7 48,1 18,4 18,3 18,6 Prešov 58,7 68,5 49,2 55,6 62,8 48,2 18,2 18,1 18,5 Košice 57,2 66,2 48,9 54,3 60,6 48,1 18,7 18,6 18,8 Source: Statistical Office of the SR (2015). The highest unemployment rate in Slovak Republic has been for last 2 decades in Banská Bystrica region, Prešov and Košice. In recent years, unemployment rate has been ranging from 17 % to 22 % on average in these regions. Unemployment rate in Prešov region reached 19,35 % in December 2013, the highest of all Slovak regions. Banská Bystrica region reached the rate of 18,26% and Košice region 17,23%. They are the only three regions exceeding the entire Slovakia average of 13,50% in December 2013. The situation positively changed in 2014, while both regions Košice and Prešov experienced decrease of unemployment, mostly caused by positive economic development, new investment into the region and also by public works and employment measured taken by the government. Tab 20: Rate of registered unemployment (in %) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Slovak Republic 18,63 17,45 15,56 13,07 11,36 9,40 7,99 8,39 12,66 12,46 13,59 14,44 13,5 12,29 Eastern Slovakia 24,74 23,62 20,84 18,19 16,62 14,41 12,52 13,17 17,81 17,28 18,85 20,14 18,32 16,72 Prešov region 23,96 23,00 19,57 17,50 15,77 13,68 12,05 12,86 18,29 17,75 18,95 20,66 19,35 17,45 Košice region 25,55 24,26 22,16 18,89 17,5 15,18 13,02 13,50 17,30 16,78 18,76 19,58 17,23 15,92 Source: Statistical Office of the SR (2015). However, unemployment rate varies within single districts at the same time. From entire Eastern Slovakia point of view, the worst situation occurred in Kežmarok district with the unemployment rate of 27,81 % in December 2013, in Rožnava district (24,83%), Sabinov (23,68%), Vranov nad Topľou (23,25%), Trebišov (22.40%) or Svidník (21,92%). On the contrary, the best situation occurred in Košice districts with unemployment rate ranging from 10,28% to 11,47%, followed by Poprad (13,90%), Stará Ľubovňa (14,36%), Spišská Nová Ves (15,91%). Prešov district and the regional seat of Prešov as well, reached unemployment of 16,88% at the end of 2013.

Map 4: Rate of registered unemployment in Slovak districts by the end of 2013 Source: Office of Labour, Family and Social Affairs (2014). Besides high unemployment rate, also a high proportion of long-term unemployed (more than a year) in the total number of unemployed is another negative fact. Long-term unemployed made up more than 53,6 % proportion of all registered unemployed in the SR in December 2013. Long-term unemployed proportion in Košice region is higher than the average in the SR, namely at the level of 60,8 %, in Prešov region as many as 61,1 %. From this point of view, higher attention to marginalised socially excluded population groups must be paid. Their inclusion in society (and mainly in labour market) is the most difficult long-term task especially in the regions of Košice, Prešov and Banská Bystrica where majority of them lives. Labour market situation also impacts the level of earnings and household incomes. 824 reflected the average monthly wage in the Slovak Republic in 2013. 1,110 monthly wage in Bratislava region was the highest one, 636 in Prešov region was the lowest one. It reached 758 in Košice region. Regarding the after-tax household financial income, households in Prešov region had the lowest income in 2012, namely 327,65 per person and month, and in Košice region, it was 333,77. On the contrary, Bratislava region household had the highest income of 468,54. As for households outgoings, they represented the sum of 285,31 per 1 household member a month in Prešov region, 289,27 in Košice region both being the lowest outgoings of all Slovak regions. In contrast, outgoings of Bratislava region population represented 409,28. The highest proportion of after-tax financial income in Prešov region was created by after-tax employment earnings (47,4%), followed by social benefits (29,5%), enterprise revenues (17,1%) and property revenues and other, accounting for 6 % of total household incomes. As for household outgoings, the largest proportion belongs to consumption (91,2%) spending on food and drinks is the greatest (22,5%), spending on housing, water, electricity and gas supply and fuel (19,4%) and

spending on transport (7,5%). The lowest money sums were expended on education (0,3%), alcoholic drinks and tobacco (2,7%) and healthcare (3,4 %). It is obvious from the aforesaid that current Eastern Slovakia, i. e. Prešov and Košice regions situation is unfavourable and is still getting worse in comparison to other Slovak regions. In spite of a certain growth, its dynamism is lagging behind the Slovak average. Eastern Slovakia is a sort of Slovakia s socio-economic margin. Prešov region lagging behind other Slovak regions is the most considerable for direct foreign investments, average monthly income and GDP per capita. Problem lies not only in being the most lagging region behind the other regions of Slovakia, but also in in the fact its position is deteriorating and the slump is continuing, when comparing it to the Slovak Republic average development. Main needs and challenges Even the economic growth in the last decade, the area is growing slower than the rest of Slovakia, so regional disparities are growing. Labour market indicators are very bad for the area, with high unemployment, high share of long-term unemployment, but there are some positive islands and some decrease of unemployment in the last year in the area. Continuous brain drain of skilled and young workforce. Although a number of industries are present in the area, the lack of sectorial focus makes the comprehensive and concentrated economic development of the whole region difficult. Area is lack of some huge investment and is dominated mostly by SMEs that depend on the export activities. FDI and other investment are motivated more by GOV incentives and low labour costs, rather than using innovation potential of the area. The technology transfer processes and the innovation potential of SMEs are weak. As a result of the low level of RTDI expenditure and the lack of sectorial focus of the research activities the innovation potential of the region is not used to its full extent. Business infrastructure is in place, but is used ineffectively and wasting its potential. Cooperation among companies is weak clustering is only in the early stages. Because of poor transport infrastructure, companies have difficult access to world markets. Main potentials The 1,6 million population of the area, including 3 larger cities (Košice, Prešov, Poprad) represent not only a potential market, but also a competitive labour force pool for SMEs and transnational companies. Diverse structure of economy is a good basis for further development. Local SMEs can benefit from mutual cooperation, incl. the wider (cross-border) region, which is essential for the better economic performance of the area. Better utilisation of the existing business infrastructure and if necessary building new ones at appropriate locations contribute to the stability and the interconnection of the economy in the region. The universities and research units of the area have a solid academic background and RTDI capacity providing a good foundation for better utilizing research results. Competitiveness of the Košice-Prešov agglomeration (distance 30 kms between these 2 big cities) can enhance the development of the whole region. Major strengths of the Košice region are the following: industrial character of the region including all sectors; utilization of natural resources (talc, magnesite, limestone, white salt); sufficiency of building capacities for industrial, transport buildings, housing construction and infrastructure; sufficiency of qualified work force with college education; high land and climatic

potential together with technical means for agriculture in the Eastern Slovakia plain; the international airport Košice; terminals of combined transport and wide track provide nontranshipment transport to eastern Europe and existing centres of education, science, research. Some strong aspects of the Prešov region are the following: favourable demographic progress with available labour force; main transport corridors provide connection with the entire Slovak transport system; the lowest wage rates in Slovakia; high forestation of the territory strong potential of the wood industry; development of traditional industrial sectors (esp. engineering); free production capacities for new production (area, human resources); international airport in Poprad; qualified work force; favourable conditions for development of tourism and additional services; sources of geothermal and mineral springs. Tourism, culture and leisure The tourism of the area has great importance in country, which could become one of the key sectors in the national GDP production and employment. Eastern Slovakia is rich in touristic attractions both in cultural and in natural heritage. There are 6 of 9 Slovak national parks on the territory of Košice and Prešov regions. You find here more than 300 preserved areas and nature attractions, and 107 habitats of the European importance such as the only cold water geyser in Europe in Herľany, the deepest canyon of Slovakia (almost 400 m) in Zádiel. Map 5: National parks and protected natural areas in the Slovak Republic Source: State Agency for Nature Protection of the Slovak Republic (2015). Note: red National Park, dark green - Protected Landscape Area, light green forest. The most prominent touristic attractions values in the Eastern Slovakia include the monuments on the UNESCO - World Cultural and Natural List as: (cultural-historical) Spiš Castle and surrougings 1993, Historical centre of town Bardejov 2000, 6 from 8 listed old wooden churches of Slovakia 2008, Historical centre of town Levoča 2009 (natural) The Slovak Karst Cave System enlarged by Ochtínska Aragonit Cave, Dobšinská Ice Cave and Stratenská Cave together with Aggtelek caves in Hungary 1995, Bukové pralesy Karpát 2007. On the territory of Eastern Slovakia we can find 8 from 18 Town Monument Reservations and in town Košice it is the largest one in Slovakia.

The vast forest of northern Slovakia was a natural source of the construction industry in the past centuries. Log cabin houses and churches were built from the huge coniferous trees. Wooden churches of the Eastern rite represent a remarkable phenomenon, which was born out of the contact of two world cultural traditions the Russian-Byzantine culture on one hand, and the Latin culture on another.. That s while further typical types of tourism in the area are cultural tourism (medieval monuments, architectural buildings, religious tourism, museums of fine arts or modern art, etc.), rural (and ethnographic) tourism, active and sports tourism (e.g. water sports). In the region the balneary and health tourism is significant (numerous spa resorts with long tradition), based on the existence of mineral and thermal water. In certain counties hunting and fishing tourism is available, while the area of mountains is great for hiking trips and speleological tourism. Besides the above mentioned types of tourism, in some part of the area is favourable for business tourism or transit tourism. Altogether, besides the similarities in terms of attractions, there are also many complementary features. In addition to physical places, attractions, a rich offer of touristic events and festivals (gastro, music, theatre, dance, wine and other drinks, ethnography, religious, etc.) has developed in the area in recent years. In 2013, 1 million guests spent 2,9 million nights in the region. Although these figures seem high, but compared to the national numbers the region is under-represented and region is losing its tourism position, as High Tatras, Pieniny and Slovenský raj are top Slovak tourist areas. Tab 21: Basic indicators of tourism in the region Accommodation Beds in establishments accommodation establishments Visitors Overnight stays by visitors Average length of stay (days) Slovak Republic 3 485 197 747 4 048 505 11 486 571 2,84 Eastern Slovakia 1 047 60 270 1 014 899 2 906 706 2,86 Prešov region 701 34 131 700 248 2 256 759 3,22 Košice region 346 26 139 314 651 649 947 2,07 Source: Statistical Office of the SR (2015). Number and quality of the accommodation establishments is fast growing in the whole country, as well as in the area. A lot of supporting programs (incl. EU funds) helped this trend. Unfortunately, infrastructure building and new equipment of the hotels is not connected with improvement of human sources in the tourism sector and development of tourism attraction is also lagging behind.

Chart 5: Number of accommodation establishments 4000 3500 3000 2500 2000 1500 1000 500 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Slovak Republic Prešov region Eastern Slovakia Košice region Source: Statistical Office of the SR (2015). Lack of high quality services for reasonable price as well as other factors is causing that the number of visitors is stagnating, with dramatic fall during the years of financial crisis. The whole sector is just coming back these days to the numbers of tourists that visited Slovakia in 2007. Chart 6: Number of visitors 4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 2001200220032004200520062007200820092010201120122013 Slovak Republic Prešov region Eastern Slovakia Košice region Source: Statistical Office of the SR (2015). Number of overnight stays is following the trends of visitors number, while esp. Eastern Slovakia has problem with decreasing number of nights spent by visitors in the area.

Chart 7: Number of overnight stays by visitors 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 2001200220032004200520062007200820092010201120122013 Slovak Republic Prešov region Eastern Slovakia Košice region Source: Statistical Office of the SR (2015). Main needs and challenges Even the high investment into the sector, number of visitors and nights spent in the region are stagnating for several years. The region as tourist attraction has too low international recognition, visibility and presence on the European and World scene. Continuous degradation of the natural and cultural-artistic heritage, esp. conflict of interest between nature protection and development of tourism resorts (such example is new skiing slopes in the National Park High Tatras). Average length of stay is falling down, even the number of visitors is stagnating and number of accommodation possibilities is growing. Region is missing joint tourism products, high quality services, programme packages, tourism attractions that could hold the tourists in the region for longer time and tourism is very seasonal. Lack of active tourist clusters and weak cooperation of stakeholder providing services. Main potentials Existing natural and historical tourism centres (High Tatras, Pieniny, Košice, Spišská Nová Ves and Levoča historical area, Slovenský raj, Slovenský kras ) Natural, historical and cultural heritages of the region (thermal water and spas, natural protected areas, castles, churches, caves and other historical and archaeological sites a lot of them UNESCO protected) provide stable base for the higher level of inland and international tourism. With a stronger coordination, exchange of information and cross-promotion the touristic events of the area are also potentially strong attractions (even on international level) complementing and enhancing the physical attractions. The cooperation between cultural institutions, tourist enterprisers and other actors is the basis to create a common cultural region. This creates a huge space also for cross-border cooperation. There is high potential of the cycle-tourism, esp. in connection of CBC cycle-routes. A lot of small villages see and focus their development potential in tourism that could help in tourism infrastructure building, joint projects incl. CBC cooperation in the joint tourism products development.

Environment, climate change, energy, risk management The Area is very rich in the number and extent of NATURA 2000 sites that involve numerous sites partially overlapping with the protected natural areas of national importance. Map 6: Natura 2000 sites in the Eastern Slovakia (2015) Source: http://natura2000.eea.europa.eu/ There are 6 of 9 Slovak national parks on the territory of Košice and Prešov regions (TANAP, NAPANT, PIENAP, Slovenský raj, Slovenský kras, Národný park Poloniny). There are more than 300 preserved areas and nature attractions, and 107 habitats of the European importance such as the only cold water geyser in Europe in Herľany, the deepest canyon of Slovakia (almost 400 m) in Zádiel, the castellated rocks of Dreveník near Spišské Podhradie in the area. The territories covered by national parks and preserved landscape areas cover 22,3 % of the whole Slovak area. The National Park High Tatras, declared in 1949 is the largest and oldest one. The Slovak Karst National Park established in 2002 is the youngest one. There are more than 5000 caves registered in Slovakia. The most famous are listed as national natural monuments (44 caves and abysses), among those one half can be found in Eastern Slovakia. Some of them are opened as show caves. The protection and management of the unique flora and fauna of these vast, and partly connected and cross-border situated territories can only be effective when happens commonly, with the participation of all involved and affected parties. The area has two cross-border natural heritage site protected by UNESCO - The Slovak Karst Cave System enlarget by Ochtínska Aragonit Cave, Dobšinská Ice Cave and Stratenská Cave togehther with Aggtelek caves in Hungary, listed in 1995, Poloniny forest is the second one. A great diversity of endangered species are listed and protected also in the frame of protected areas. The threats and pressure on habitats, wild flora and fauna could come from close infrastructure development, extension of human settlements, over exploitation of natural forests conducing to ecological disproportions in the hydrographical basins. The reduction of the high diversity forests in the floodplain is significant. Slovakia has got rich sources of mineral springs (1 300), utilized in healing