With the European Commission looking to develop an Action Plan for Social Economy, co-operatives and social enterprises are hoping this will bring concrete measures for the sector.
On 2 June the Social Economy Intergroup of the European Parliament, which was renewed in January 2020, hosted an online hearing on how to leverage the economic and social recovery of Europe. The event was organised with the support of Social Economy Europe, which represents the 2.8 million social economy enterprises and organisations in Europe.
The webinar featured 24 high-level speakers including MEPs Patrizia Toia (S&D) and Sven Giegold (Greens), co-chairs of the Social Economy Intergroup of the European Parliament, and Nicolas Schmit – European Commissioner for jobs and social rights, who is in charge of developing the Action Plan.
Ms Toia talked about the role of the sector in providing essential services during the Covid-19 crisis and said she expected it to make a substantial contribution to the post-Covid recovery.
Europe needs the social innovation that the social and solidarity economy brings, she added. She said the sector can help to address the gap between member states in different regions of the EU – which has been widened by the crisis.
The Commission needs to support SMEs and the social economy by investing in the sector through its post Covid-19 recovery plan, she said.
Mr Giegold also wants Europe to move towards a more social and environmental economy after Covid-19. He thinks the Action Plan could build on the Social Business Initiative, launched in 2011 to improve access to finance, give more visibility and optimise the legal environment for social enterprises.
He wants to make it easier for employees to buyout their companies; and he warns that Europe’s state aid and competition law often stands in the way of support for the social and solidarity economy.
“The same applies to Fairtrade,” he added. “It must be possible that a group of supermarkets can get together to set a minimum of social and environmental standards for sourcing. This is not dangerous to European competition, it is the basis for fair competition.”
State aid rules have already been loosened to support businesses in some of the most affected EU member states, he said.
Mr Giegold added that it should be made easier to include regional, social and environmental provisions within public procurement rules.
He thinks EU market regulation is designed for traditional companies and fails to address the specificity of other actors, including co-operatives, non-profits, social enterprises and associations.
“It is very important that the Commission, in the run-up to the action plan, collects all the evidence for an unequal treatment – as we see for instance between co-operative banks and non co-operative banks,” he added.
The sector is also hampered by a lack of available statistics, he warned.
“Only what is being measured counts,” he said, arguing Eurostat should collect more viable statistics about the sector in line with its mandate.
He is also concerned about the legal form for associations, mutuals or foundations wishing to register as a European entity. Similar legislation is already in place for co-operative enterprises. EU law allows members from different EU states to form a European Cooperative Society, an optional legal form designed to facilitate co-operatives’ cross-border and trans-national activities.
“It is key beyond traditional financing tools that we really confront these issues and use the opportunity of that Action Plan to bring about real change and that means we are not only talking about symbolic activity but real changes to budget and to regulation,” said Mr Giegold.
When he was a member of the European Parliament, Nicolas Schmit sat on the Social Economy intergroup. A former minister of labour, employment and immigration in Luxembourg, he worked with other EU member states to lobby the Commission for a stronger commitment to promoting the social economy.
Covid-19 has opened new opportunities for the social economy, he said – but it has also posed extra burdens on SMEs and social economy entities. The Commission is working to ensure that social economy enterprises are not excluded from EU support measures: these include State Aid; the two Coronavirus Response Investment Initiatives; extending the scope of the EU Solidarity Fund to health crises; the European Investment Fund; and the proposal for a European instrument for temporary support to mitigate unemployment risks in an emergency (SURE).
Mr Schmit agreed that the Commission needs to be more flexible on state aid and said it was exploring ways to provide additional flexibility for investments in social economy projects and microfinance under the Employment and Social Innovation (EaSI) programme.
With negotiations on the EU budget after 2020 under way, Mr Schmit thinks there is an opportunity to further use EU funds and financial instruments to invest in social economy projects – especially through the ESF Plus, InvestEU and hopefully through an ambitious EU Recovery Plan.
He added the Commission will explore how to: better support capacity building efforts within the social economy sector; provide better financial instruments; loosen administrative burdens; and provide a transnational tool to help multi-state initiatives flourish.
Mr Schmit is also keen to copoperate further with the Social Economy Intergroup and social economy stakeholders on the Action Plan, which will be presented in the second half of 2021.
Yolanda Díaz, Spains’s minister for labour and social economy, talked about the role of the Monitoring Committee of Luxembourg Declaration, a high-level group of member states engaged in the promotion of the social economy, currently chaired by the Spanish government. She also announced the development of an online platform to share experiences, policies and good practices related to the social economy among member states, institutions and other relevant stakeholders.
Francesca Puglisi, Italian under-state secretary of the Ministry of Labour and Social Policy, said the social economy sector in her country accounts for 5% of the GDP. The Italian government has taken several steps to support third sector entities throughout the crisis, she said, and called on the EU to support these actions through its long-term budget alongside immediate measures for the urgent economic and social recovery.
Juan Antonio Pedreño, president of Social Economy Europe, talked about the major qualities of the social economy, such as its resilience. He thinks the sector could be a driver for the reindustrialisation of Europe.
He also argued that European legislation could support employee takeovers, particularly in the context of a new recession looming.
While this already happening in Spain, Italy, and France, it is less common in other EU countries, he said.
He talked about the need to encourage new co-ops in sectors such as housing, retail, agriculture, public transport and healthcare, and called on the Commission to further support and invest in the social economy as a driver of the green transition. While he believes the future will be digital, he warns that digitisation needs to be fair, democratic, and characterised by quality work conditions and access to social protection.
He concluded by calling for the mobilisation of all relevant EU funds, instruments and institutional support to help the social economy flourish and to operate in the single market. He thinks the Commission can help by accompanying public authorities develop adequate policy and legal frameworks; investing in the capacity building of social economy representatives; continuing to boost socially responsible public procurement; and promoting the participation of the 2.8 million social economy enterprises and organisations in EU cross-sectoral social dialogue.
Social Economy Europe will continue to engage with the Commission to represent stakeholder views while the Action Plan is defined.
Next year will see the launch of Europe’s recovery Plan #NextGenerationEU, a new European budget for 2021-2027 and the European Action Plan for the Social Economy.
