Slovakia’s government agreed to grant state aid to Samsung Electronics, Mondi Ltd. and eight other companies after they pledged new investment to create or maintain jobs.
Samsung will receive 19.8 million euros ($25.6 million) in tax breaks in exchange for a 70 million-euro upgrade of its Slovak factory, which shall preserve 760 jobs, according to a document posted on the government’s website after today’s Cabinet meeting. The Slovak unit of Mondi, a paper and packaging company, will get aid worth 25.4 million euros tied to a 95 million-euro investment project preserving 766 jobs.
The administration of Premier Robert Fico is trying to balance a need to stimulate the economy and prevent job losses with efforts to cut fiscal deficit to prevent contagion from the euro-region debt crisis.
The Cabinet approved the aid mainly in form of tax breaks, which will be granted after 2013 not to threaten the country’s commitment to squeeze the fiscal gap below the European Union’s limit as early as next year.
The remaining eight investors receiving a total of 76 million euros in aid are car-part makers Continental AG, Magneti Marelli SpA, Zizala Litchsysteme GMBH, Bekaert NV, Spain’s metal maker Fagor Ederlan, Delta Electronics Thailand PCL, Muehlbauer Holding AG, a maker of smart cards and Ekoltech SRO, a local supplier of Ikea AB.