Co-ops included in report on future of the EU single market

The European confederation of industrial and service cooperatives welcomed some of the report’s recommendations

A report by former Italian prime minister and president of the Jacques Delors Institute, Enrico Letta, explores the future of the European single market, and includes calls to support the co-op and social enterprise sectors.

The Much More Than a Market report covers a range of topics of concern for co-operatives, including state aid, industrial strategy and public procurement.

Established in 1993, the single market allows the free movement of goods, services, people and capital between member states. Letta’s report suggests the addition of a fifth freedom, to enhance research, innovation and education. 

The report also mentions the EU’s 2.8 million social economy enterprises, highlighting that they employ 13.6 million people and provide solutions to key societal challenges.

“They cover a wide range of sectors, activities and organisational models, from care services to recycling, from co-operatives to social enterprises,” the report says. “They should be able to participate in the single market on an equal footing with other, more mainstream competitors. Creating the right environment for the social economy to thrive will not only lead to further job creation in the sector but will also contribute to strengthening the social dimension of the single market.”

The publication highlights the role of social economy businesses in “fostering proximity and the sustainable development of territories, embodying the essence of a people-centred economy that is deeply rooted in local communities”. It also argues that their close ties to the regions they serve “enable a unique understanding of local needs, driving innovation in social and environmental practices that resonate with territorial development goals”.

Being rooted in the local community, social economy enterprises promote resilient and sustainable territorial ecosystems, ensuring that the growth and progress fostered by the social economy are inclusive and beneficial to all, argues the report.

Responding to the report, the European confederation of industrial and service cooperatives (Cecop) said: “Research, innovation and education are crucial elements for cooperatives development and outreach.

“Enrico Letta’s report rightfully highlights the need to continue investing in training for the Single Market to rise to the challenges it faces. Co-operatives play an important role in the development of skills since in-work education and training is one of the co-operative principles upon which co-operative enterprises are founded.

“But again, for both green and digital transition to be achieved, especially for small and medium co-operatives, and those located in rural or remote areas, support for upskilling and re-skilling of the European workforce is essential.”

The report also calls for stricter enforcement of state aid at national level to allow an expansion of EU-level funding support. Cecop warns that “EU-level funding support cannot come at the cost of discriminating industrial actors based on their business model”.

“These EU-level funding supports should include and adapt to all forms of enterprises, such as co-operatives,” it adds. “Unlocking EU leveraging effects for national co-operative financial instruments would be one of the concrete and rapid steps towards the scale-up of the industrial capacities of co-operatives.

“Providing a favourable ecosystem for worker buyouts could be another concrete step to preserve European manufacturing leadership. The common conditionality discussed in the report should take into account the ownership nature as well as social and democratic dimensions, and recognise the particularities of the co-operative model to meet these conditions.”

Ceop also points out the need to support the contribution of co-ops via state aid, adding that many of the services provided by co-operatives are local, which means they do not interfere with competition in the internal market.

“Enrico Letta’s report discusses the question of state aid and the General Block Exemption Regulation (GBER),” says Cecop. “It calls for the streamlining of state aid processes which would lead to better access to support for SMEs. In terms of the GBER, we particularly welcome the report advocating for expanding its use specifically for the social economy, thus enhancing social economy enterprises’ access to finance.”

In terms of procurement, Letta’s report calls for strategies that are not only transparent and competitive but also sustainable. Public procurement is a key policy for the promotion of the social economy and social enterprises, it adds, urging further initiatives to “significantly increase the impact and market presence of the social economy and social enterprises, recognising their valuable contribution to social and economic wellbeing.”

“Currently, while the Public Procurement Directive suggests the use of social and environmental considerations as award criteria, in reality, the voluntary nature of these criteria leads to them being underused,” said Cecop. “The systematic use of these criteria, however, would enhance the participation of social economy enterprises, such as co-operatives, which have higher social standards and often are important providers of quality services.”

Social Economy Europe has also responded to the report, saying it welcomes efforts towards the further implementation of the Social Economy Action Plan (SEAP).

”To truly promote social cohesion and innovation,” it added, “it is necessary to include the social economy in all EU policies, to put it at the heart of every EU institution and to develop adapted policies at every level, from local to national.

“That is why we call upon the EU to maintain the SE Intergoup of the EU Parliament and to designate a commissioner in charge of social economy; these are prerogatives to deepen and continue the implementation of SEAP. Only in this way can the EU really move towards ‘more than market’, towards a strong social Europe which safeguards services of general interest and strengthens the support of member states (through state aid and public spending) towards social and environmental activities.”