Germany offers aid to Slovak firms

BUSINESS cooperation between Germany and Slovakia is not restricted just to large business projects. Germany also helps Germans living outside their original homeland so as to encourage them not to leave for jobs abroad. Based on a 1990 German-Czechoslovak agreement on good neighbourliness, friendship and cooperation, Germany carries out various support programmes for the German minority which remains in Slovakia.

BUSINESS cooperation between Germany and Slovakia is not restricted just to large business projects. Germany also helps Germans living outside their original homeland so as to encourage them not to leave for jobs abroad. Based on a 1990 German-Czechoslovak agreement on good neighbourliness, friendship and cooperation, Germany carries out various support programmes for the German minority which remains in Slovakia.

“The support of small and medium-sized private entrepreneurs in regions where the Carpathian German minority lives, and their vicinities, has been found to be one of the most effective measures [in terms of] assistance provided by Germany,” Ján König, the chairman of the Carpathian-German Association (KDA), told The Slovak Spectator, adding that the German Interior Ministry, in line with the slogan ‘Our help for your business’, has allocated funds to support these activities.

The aim was to provide funds relatively quickly and in a non-bureaucratic way to Carpathian Germans or those associated with the minority when launching, consolidating and extending businesses. The assistance has been provided via KDA, a civic association.

The German minority in Slovakia traditionally lives in regions with a history of mining and metallurgical industries. These regions, after the fall of the communist regime, lagged behind the rest of Slovakia because such industries almost completely ceased operating. The aim of the support was to revive crafts in these regions and also deter the departure of the German minority to Germany, König explained.

KDA processed the first 13 applications and paid out the first money to businesses in 1992. By the end of 2009, KDA supported 445 business entities within Slovakia and aggregate financial assistance amounted to €6.56 million. Based on the number of entities employing at least five to 20 people König estimates that the programme has secured or created 2,000-3,500 jobs.

“This total covers everything and the aggregate amount of funds provided from Germany is not negligible across the whole of Slovakia,” he said.

The purposes for which such financial assistance can be used is in general limited to obtaining production equipment and the funds cannot be used to acquire real estate, obtain certificates or cover operating costs. Affinity with the region and the German minority is also taken into consideration, but assistance is not limited to the German minority alone.

“Profitability and returns on investment which will be used again for future projects remain the main criteria,” said König. “The maximum support for one project is limited to €35,000.”



At first the scheme required recipients to return 70 percent of the funds provided; the remaining 30 percent was treated as an investment in the business in Slovakia. This portion was gradually lowered and now supported businesses have to return 100 percent of the funds. As of 2007, support is provided in the form of a soft loan.

“The interest in this form of support is satisfactory and the annual budget for this assistance is also used up every year,” said König. “During the first years the highest number of [payments] was provided in the five regions where the German minority lives, i.e. Lower and Upper Spiš, Hauerland (Prievidza and its vicinity), the valley of the Bodva river (Medzev and its vicinity) and Bratislava. Gradually, our activity has also become known outside these regions. Businessmen appreciate in particular our openness, personal contact, non-bureaucratic attitude and significant speed when dealing with applications.”


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