Promoting regional development
Vision for regional development
In line with the primary objective of the Slovenian Development Strategy 2030 to provide a high quality of life for all, Slovenia's vision for regional development is to have dynamic and creative regions with their own identity. They should seek to become recognisable, specialised, effectively managed and capable of detecting and exploiting global development opportunities. Their development will be based on economic efficiency, social justice and social responsibility, while maintaining a healthy natural environment. The achievement of balanced economic, social and environmental dimensions will take account of the planet’s limitations and will create conditions and opportunities for present and future generations. With the state-led measures of developmental support, regional unemployment hotspots will be restructured and eliminated and border areas will maintain population and development viability.
The four overarching objectives of regional policy for 2030 are aimed at improving the development strength of regions based on their own development potential and global opportunities.
Objective 1: To raise the quality of life in all regions through balanced economic, social and environmental development based on the principles of sustainable development;
Objective 2: To converge with the development level of other European regions;
Objective 3: To reduce regional development disparities;
Objective 4: To realise development potentials and exploit global opportunities through international interregional integration and cooperation.
Regional policy principles
Regional development is promoted through the following regional policy principles of:
- the multi-level nature of regional policy is represented by local communities, regional development partnerships, development regions, cohesion regions, the national level and the EU level;
- sustainable development;
- territorial focus, but also tailor-made measures to the specific characteristics of individual areas;
- adaptability and responsiveness to development problems;
- coordination between decision-makers;
- cooperation between local communities, business associations and NGOs, and between the public and private sectors;
- programme-oriented development incentives based on national policies and priorities and regional development programmes, achieving synergies;
- regional autonomy in the decision-making on projects and their financing;
- integration within and outside the region, in particular with neighbouring regions and in the wider European area;
- responsibility for implementation at national and regional level: the division of functions and emphasis on the steering and coordination role of the national level, and the devolution of planning and implementation functions to the lower territorial levels;
- the monitoring and evaluation of policies, programmes and projects.
Instruments, programmes and resources of endogenous regional policy
Endogenous regional policy is a part of regional policy focused on the achievement of territorial development objectives. It is implemented through the integration of internal development initiatives of development regions following the bottom-up principle.
Instruments based on a coordination approach between national and regional initiatives
In the following, the three instruments, with which this approach is implemented, are presented.
Regional development agreements
Regional development agreements, which implement regional development programmes, are an established instrument of regional policy. Over the 2021–2027 period, they will contribute to the achievement of all four general objectives, and in particular to Objective 1: Raising the quality of life in all regions. They are also a key instrument implementing the principle of regional policy: Territorial focus, tailor-made measures to the specific characteristics of individual development regions. In the following, the 3 instruments with which this approach is implemented are presented.
The funding of the regional development agreements will come from the integral budget, EU Cohesion Policy funds and other sources.
Programme of measures for disadvantaged border areas
In the next programming period, disadvantaged border areas (DBA) will be a key instrument for achieving Objective 3: To reduce regional development disparities.
Measures for disadvantaged border areas will be co-financed from the state budget.
Disadvantaged border areas are mostly located away from the main transport corridors. They are facing a strong process of socio-economic transformation, leading to predominantly negative effects on regional development. They can be defined as disadvantaged (rural) regions. The measures targeting disadvantaged border areas are intended to preserve the vitality of these areas and strengthen the border zone with new investments and employment opportunities, thus also creating the conditions for improving the demographic picture of this zone. The aim is also to reduce the current daily labour migration to neighbouring countries and to the central part of the country, thereby contributing to environmental protection objectives.
Temporary measures of developmental support for disadvantaged areas with a high unemployment rate
Such measures are a flexible mechanism that is triggered should a development problem arise in a specific narrow area in a region, which results in an increase in the unemployment rate exceeding a critical threshold. The threshold is set at the level of the administrative unit and stands at 17 %. Once the first phase of identifying development issues has been carried out, the development institutions in the region are eligible for funds to strengthen the development management of the area in difficulty. The second phase is the identification of a problem area and the preparation of development support measures. A competitiveness programme is drawn up for such an area, which is financed from the state budget.
In the 2014–2020 programming period, such development support programmes and measures were implemented in the Pokolpje area, Maribor and its wider surroundings, and in the area of the municipalities of Hrastnik, Radeče and Trbovlje. The Pomurje region was also included among the problem areas with a high unemployment rate, where a special development law was adopted to address structural problems. All these development support measures were temporary and expired by the end of the programming period.
Bottom-up regional policy instruments
In the following, the three instruments, with which this initiative is implemented, are presented.
Community-led local development
Community-led local development (CLLD), as a framework for implementing bottom-up territorial approaches, both in terms of the definition of (functional) territorial units and in terms of governance, will be defined in the context of the programming of the EU Common Agricultural Policy for Rural Development and Fisheries and the EU Cohesion Policy for the next programming period. The CLLD instrument, which is already being implemented in the current programming period, will continue in the future.
Programmes to promote the economic base and accelerate the development of areas belonging to the Italian and Hungarian indigenous national communities and the Roma community
The Programme to Promote the Economic Base of the Hungarian National Community 2021–2024 was adopted in November 2020 and the Programme to Promote the Economic Base of the Italian National Community 2021–2024 in January 2021.
The two programmes target the areas (at the level of settlements) where the two indigenous national communities live. Their aim is to promote the development of the area by encouraging investment, preserving and creating new jobs, promoting tourism activities and products and promoting the area. The programmes are designed and mostly implemented according to the bottom-up principle by the indigenous national communities and are financed from the integral budget.
The programmes implemented under the Promotion of Balanced Regional Development Act, the scope of which is determined by the state budget, include assistance to municipalities in solving utility infrastructure issues in Roma settlements. Again, the bottom-up principle is the initiative of the local authorities, while the Ministry of Economy, Tourism and Sport supports the efforts of municipalities that are actively addressing the Roma issue with budget funds. The budget funds are earmarked to help municipalities with the improvement of utility infrastructure in Roma settlements. The support includes the construction of roads, water supply, electrification and similar. Support for developing the utility infrastructure in Roma settlements is expected to continue in the next programming period.
Free transfer of state property to municipalities for development purposes
State property may be transferred free of charge into the ownership of municipalities and public funds established by the municipality in order to be used for development purposes. The procedure for the property transfer is conducted at the Ministry of Economy, Tourism and Sport, while the decision on the transfer is made by the Government of the Republic of Slovenia.
The procedure is initiated by an application from the municipality or at the proposal of the manager of the property. In the description of the development purpose, the municipality must indicate the purposes for which the property will be used. It must specify the activities and the amount of funds to be invested in the transferred property and the dynamics of the investment.
The objective of transferring state property to local communities is to improve the management of state assets. The transfer aims to contribute to the preservation or creation of new jobs, the improvement of the environment or development infrastructure.
State development tasks carried out in the public interest at the regional level
In the following, two measures are presented, which are implemented in the public interest at the regional level.
Regional scholarship scheme
The regional scholarship scheme is an established regional policy instrument. Regional scholarship schemes quickly established themselves as an effective instrument in all development regions. All Regional Development Agencies (RDAs) have implemented them with EU funds. Based on their experience, the RDAs have standardised their procedures and rules of operation, which has enabled the successful planning and implementation of the scheme. The primary purpose of the instrument is for the RDA to assist employers in finding suitable scholarship holders, calculate and pay the scholarships on the basis of harmonised procedures and rules, and to monitor them for the duration of their education and beyond.
Regional pillar promoting entrepreneurship
The regional pillar of promoting entrepreneurship is a regional policy instrument that pursues the first three general objectives of regional policy. It complements the instruments for promoting entrepreneurship and competitiveness at the national level and is part of a coherent concept. In the current programming period, they fall within the framework of regional schemes to promote the creation of new businesses and regional guarantee schemes.
The Public Fund of the Republic of Slovenia for Regional and Rural Development (public fund) implements the regional guarantee, micro loan and other business support schemes, which are implemented at the level of the entire region. Based on the agreement between the aforementioned fund and the provider of the regional financial scheme, which defines financing conditions, the fund may authorise an operator of the regional financial scheme selected by the fund through a public tender to manage its funds.
The regional pillar for promoting entrepreneurship aims to expand the range of instruments to promote entrepreneurship with a specific offer tailored to the development needs of the regions.
Public Fund of the Republic of Slovenia for Regional Development and Development of Rural Areas
The public fund pursues its vision through two main strategic orientations. The first aims to implement development plans by creating incentives that have a significant impact on coherent regional development. These incentives are substantively and financially linked to the implementation of national regional and rural development policies. The public fund allocates them using different combinations of financial instruments. The second strategic orientation of the public fund relates to the performance of the tasks of the Certifying Authority for three operational programmes of European territorial cooperation, i.e. Slovenia-Austria, Slovenia-Hungary and Slovenia-Croatia.
Regional aid map for the 2022–2027 period
Regional state aid for investments is an important instrument used by countries to strengthen regional development. The areas eligible for regional state aid are laid down in the regional aid map. The regional aid map includes “a” areas where the economic situation is extremely unfavourable compared to the EU as a whole, and “c” areas where the economic situation is unfavourable but less so than in “a” areas.
The entire territory of the cohesion region Vzhodna Slovenija is determined as area “a” on the regional aid map. The maximum investment aid intensity for large companies can be 30 %.
Part of the territory of the cohesion region Zahodna Slovenija is determined as area “c” on the regional aid map; this includes the following:
- the whole territory of Goriška statistical region
- the territory of Gorenjska statistical region excluding the Municipality of Kranj,
- the territory of Obalno-kraška statistical region excluding the Municipalities of Koper and Ankaran,
- in the territory of the Osrednjeslovenska statistical region, the map includes the municipalities of Borovnica, Dobrepolje, Ig, Šmartno pri Litiji and Velike Lašče.
The maximum aid intensity in areas “c” for investments for large companies can be 15 %, except in eligible areas of the Obalno-kraška region, where the aid intensity can be up to 25 %.
In all eligible areas on the regional aid map, aid intensity may be increased by a maximum of 20 percentage points for small enterprises and by a maximum of 10 percentage points for medium-sized enterprises.
The restrictions arising from the regional aid map apply only to regional state aid and do not affect the possibility of granting other permitted types of state aid and de minimis aid. Irrespective of the regional map, it will be possible to continue granting aid for research, development, innovation, small and medium-sized enterprises, environmental protection and energy, education and training, culture, local, sports and multifunctional infrastructure and other permitted aid in accordance with the EU rules in the entire territory of Slovenia.
European Territorial Cooperation
European Territorial Cooperation (ETC) has been recognised by EU Member States as a high added value programme and will therefore continue in the next programming period. It is a common approach by European regions to tackling issues that transcend national borders and to overcoming the most common obstacles to territorial cooperation, which arise from differences in legal systems, administrative arrangements, geographical location and language. The primary purpose of these programmes is to promote cooperation and strengthen the institutional capacity of partner institutions from different countries to reduce regional, economic and social disparities in functionally rounded territorial areas facing identified problems or development opportunities.