EU reveals new action plan to boost the social economy

The plan was welcomed by Social Economy Europe and Cooperatives Europe

The European Commission has launched a Social Economy Action Plan, running until 2030, to boost a sector that currently has 2.8 million organisations and employs 13.6 million people.

Revealed yesterday (9 December) by Nicolas Schmit, the commissioner for jobs and social rights, the plan was welcomed by Social Economy Europe, the lobbying body for the sector.

Mr Schmit said the social economy is an important sector in Europe with “a huge job-creating potential”, but it has often struggled to develop and scale up its activities because it is not sufficiently understood and recognised.

“They need more and better support to grow and thrive, so they can have an even bigger impact on society”, he added.

Social economy actors, including co-operatives, could provide “innovative bottom-up solutions to many of the global challenges of today, especially climate change, digitisation and social exclusion”, he said.

The plan is divided into three areas:

  • Creating the right conditions for the social economy to grow;
  • Opening opportunities for social economy organisations to start up and scale up;
  • Making sure the social economy and its potential are absolutely recognised.

To further explore issues such as state aid, public procurement and taxation, the Commission will propose a council recommendation on developing the social economy framework conditions in 2023.

Mr Schmit also revealed that the Commission will launch a new EU Social Economy Gateway in 2023 to ensure social economy actors can find all the information they need in one place on EU funding, policies, training and initiatives. It will launch new financial products in 2022 under the InvestEU programme and set up a new European Competence Centre for Social Innovation in 2022.

Social Economy Europe (SEE) said the plan was “an impressive EU public policy”, co-created with social economy stakeholders”, which should scale up the social economy – which currently represents 6.3% of employment in the EU.

SEE President Juan Antonio Pedreño said: “We warmly welcome and endorse the Social Economy Action Plan, for which we have been working and advocating since 2014. It will provide concrete instruments for social economy actors to scale-up all over Europe and beyond our borders.

“The plan is a federative initiative. It includes some of our main policy recommendations. The proposal of a council recommendation on developing social economy framework conditions, that the Council should adopt in 2023; the new Single EU Social Economy Gateway to be launched in 2030; and the importance of supporting representative social economy networks in every EU member state, are also fully aligned with the letter and spirit of our proposals.”

For the first time, the plan provides a clear and inclusive definition of the social economy in Europe as entities characterised by “the primacy of people as well as social and/or environmental purpose over profit, the reinvestment of most of the profits and surpluses to carry out activities in the interest of members/users (‘collective interest’) or society at large (‘general interest’) and democratic and/ or participatory governance”.

Furthermore, the definition mentions co-operatives, mutual benefit societies, associations (including charities), foundations, and social enterprises as types of social economy organisations.

SEE director Victor Meseguer said: “This is a very good EU public policy, a policy that inspires and supports a positive project for Europe, a policy that will kick start an entrepreneurial revolution. What excites us the most at Social Economy Europe is the way forward.

“All hands are needed now to implement the plan: social economy stakeholders, member states, EU institutions, local and regional authorities, researches, financial institutions, the philanthropy and investors, the GECES, etc. An adventure in which we look forward to cooperating with our amazing network.”

The plan includes 38 concrete actions to be between 2021 and 2030 in areas such as: state aid, legal and policy frameworks, socially responsible public procurement and access to markets, promoting social economy at local, regional and international levels; business support, skills, youth entrepreneurship, access to funding and finance; social economy contribution to the green and digital transitions, social innovation; recognition and more.

Cooperatives Europe also welcomed the Commission’s commitment to bring recognition to social economy enterprises within policy design and legal frameworks – taking into account the plurality of the movement and the Commission’s assistance to member states at national and local levels.

In terms of the definition of the social economy in the SEAP, Cooperatives Europe stressed “the importance of considering all types of co-operatives for a true level playing field between all enterprises in the market, from large international ones to locally rooted SMEs in the proximity economy.”

Cooperatives Europe also welcomed the proposal for a EU Social Economy Gateway and the actions aimed at fostering youth entrepreneurship and promoting alternative business models.

However, it was critical of the fact that the co-operation and development instruments do not include the entire European region. It said social economy enterprises – particularly co-ops – bring “substantial added value as development actors and must be better supported within EU external action”.

Going forward, Cooperatives Europe said it expects the Commission to provide “a set of concrete and practical measures to move forward”. It called for strategic objectives and benchmarks at the EU level as well as active coordination between member states.

Cooperatives Europe’s president Susanne Westhausen said: “Today’s Action Plan is a step forward to support social economy enterprises to start up, scale up, innovate and create jobs. It recognises their true value as actors contributing to economic growth and job creation while being drivers for fair, inclusive, and sustainable development. Cooperatives Europe looks forward to collaborating with the Commission and its partners in the next few months to bring this initiative to life.”

CECOP, the European confederation of industrial and service co-operatives, also welcomed the plan.

“We are very pleased to welcome the Action Plan. Many of the issues on which worker and social co-operatives have been engaged for years are identified and therefore we welcome the Commission’s commitment to set up an ecosystem capable of developing the social economy. We particularly welcome the announced initiatives willing to make the taxation, public procurement and state aid rules more consistent with the needs of the social economy,” said CECOP president, Giuseppe Guerini.

“In CECOP, we have been committed for long time toward youth involvement in cooperatives, so we welcome the establishment of the Youth Entrepreneurship Policy Academy. Our co-operatives will certainly be ready to collaborate for the success of this initiative and to contribute to the European competence centres for social innovation. We also greatly appreciate the introduction of innovative financial tools, together with adequate taxonomy,” he added.

However, the apex pointed out that “while the Action Plan announces measures for the 2021-2030 period, most of the key Commission presented initiatives are planned for 2022 and 2023”.

“We regret that despite the goodwill, a long-term vision with clearly established targets is missing,” it said in a statement.

CECOP also asked the Commission to make sure that representatives of social economy financial institutions are represented in the InvestEU Committee. Read its full statement here.