Social Ecomomy and Social enterprises: The EU vision and experience Patrick KLEIN DG GROWTH – European Commission
02 June 2016
Social economy in the European Union (1) •
What they are : 2 million social economy enterprises in Europe (10% of all businesses in the EU). More than 11 million people – about 6% of the EU’s employees – work for social economy enterprises;
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Main objectives: to serve the members and not to obtain a return on investment as the traditional mainstream capital companies do. The members act in accordance with the principle of solidarity and mutuality, and manage their enterprise on the basis of 'one man, one vote' principle. 2
Social economy in the European Union (2) â—? Social economy is a key element of the European social model. Closely linked to the EU2020 strategy and makes a significant contribution to society; â—?
Resilience to the crisis and figures on the rise;
â—? Involvement of EU policy-makers to support social enterprises of high importance: added value of a European strategy & policies (ie: circular economy, collaborative economy).
Social economy: a crucial sector to tackle different horizontal challenges •
Ensuring better quality job creation;
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Involving local and regional authorities in public policy making;
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Stimulating gender equality;
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Tackling the refugees crisis.
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What have we done ? What have we achieved ?
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The legislative approach: promotion of European statutes for social economy enterprises (1) The Commission submitted the following proposals to the Council of the European Union: * Proposal for a Council Regulation on the Statute for a European Cooperative Society (1992) * Proposal for a Council Regulation on the Statute for a European Mutual (social security and insurance society) (1992) * Proposal for a Council Regulation on the Statute for a European Association (1992) * Proposal for a Council Regulation on the Statute for a European Foundation (2012).
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The legislative approach: promotion of European statutes for social economy enterprises (2) On Cooperatives: in 2003, the Statute for a European Cooperative was adopted. The Commission carried out a public consultation in order to simplify the existing statute and make it more user-friendly. No new legislative proposal to be expected but recommendations to support cooperatives proposed in a working group in 2015; On Mutuals: the proposal of 1992 was withdrawn in 2006 by the Commission due to lack of legislative progress. Commission refrained from proposing a new text (= poor chance to be adopted in the Council); On Foundations: a proposal was made by the Commission in 2012 and withdrawn in December 2014 (= poor chance to be adopted in the Council).
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The political approach: The Social Business Initiative (SBI) The Social Business Initiative (SBI), launched in 2011, aims to: 1. Introduce a short-term action plan to support the development of social enterprises, key stakeholders in the social economy and social innovation sector. Definition of a social enterprise ? 2. Prompt a debate on the avenues to be explored in the medium/long term. The initiative is implemented in close partnership with stakeholders in the sector and EU countries. The plan contains 11 priority measures, organised around three themes Making it easier for social enterprises to obtain funding (1), increasing visibility (2) and making the legal environment more friendly for social enterprises (3). 8
I. Improve the access to funding (4 key actions) 1. European Social Entrepreneurship Funds: in place since July 2013 – 6 EuSef so far (DE + FR). 2. Development of microcredit in Europe: Code of Conduct published in October 2013. 3. A European financial instrument to improve social businesses' access to funding. Guarantee scheme via EaSI – EIF. Available since July 2015. 4. Investment priority for social enterprises in the regulations ERDF (European Regional Development Fund) and ESF (European Social Fund) Available via ESIF for 2014-2020. 9
II. Improve the visibility (4 key actions) 1. Mapping social enterprises in Europe to identify good practices and collect reliable data on the social economy. = published in October 2014.
2. A public database of labels and certifications applicable to social businesses in Europe to improve the visibility and comparison between them. = published in October 2014.
3. Promote mutual learning and capacity-building of national and regional administrations and help them to put in place integrated strategies to support social enterprises.= guide + seminars by EC 4. A single, multilingual information and exchange platform for social enterprises and their partners. = Social 10 Innovation Europe
III. Improve legal environment (3 key actions) 1. European foundation Statute (February 2012) and simplification of the European Co-operative Society in 2012. Study on the situation of mutual societies (February 2012) (BLOCKAGE at Council level !!) 2. Public procurement reform: streamlined regime for social services; stronger focus on the element of quality in awarding contracts; possibility to take into account the working conditions for people involved in the production process and extended possibility of reserved contracts for social enterprises. (Transposition in MS: April 2016). 3. Simplify the implementation of rules concerning state aid to social and local services. (Guide published: 11 February 2013.
Groupe d'Experts de la Commission sur l'Entrepreneuriat Social (GECES) ("Expert group of the Commission on social entrepreneurship")
Communication on Social Business Initiative (SBI): "The Commission … shall … set up a consultative multistakeholder group on social business to examine the progress of the measures envisaged in this Communication … this group could be made up of representatives of the Member States, local authorities, social entrepreneurs' organisations, the banking and finance sector and the academic and university sector." COM(2011)682 12
GECES Informal group set up for 6 years (2012 – 2017), which will: Examine the progress of the measures envisaged in the SBI Be consulted by the Commission, on the development, setting up and implementation of the 11 actions listed in SBI Be consulted by the Commission, on the opportunity, development, setting up and implementation of the other actions mentioned in the SBI Meets twice a year (at least, additional meetings in subgroups or working groups if decided/needed) Partial renewal in Spring 2015. 13
GECES 70 members
Member States (28 + 28 substitutes) Regional and local authorities & their representatives (7) Organisations representing social entrepreneurs (up to 16) Social business support organisations (up to 8) Banking and finance sector (up to 8) Academic and research sector (up to 8)
16 observers (+ 16 substitutes)
Acceding, candidate, potential candidate, EFTA countries EP, EESC and C of R EIB, EBRD and EIF 14
What is on the agenda for the coming months ?
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A bottom up approach to stimulate the development of social economy • Launch in September 2015 of a new cycle of discussion within 4 working groups: finance, visibility, legal framework, external dimension; • Adoption of a bottom-up approach to work on a new roadmap; Recommandations expected for Fall 2016. Towards a new Action Plan ?
GECES discussion on creating a legal framework for social enterprises. (Working Group III)
Why : - Request from some MS to help design an adequate legal framework/ecosystem; - Lack of legal framework may create a variety of obstacles to the development of social enterprises; - Recommendation could inspire third countries to set up specific schemes. How : - Propose a Commission recommendation that recognizes the specific contribution of SE to economic development, recalls their guiding principles/values and the role of different levels of governance in policy-making; Good practices to be included in the recommendation. - Recommendation to highlight different legal forms a SE can take (mutuals, cooperatives, associations, new forms of business‌); - Recommendation to propose policy measures and instruments to structure a favorable and coherent institutional context for the development of SE. 17
Social economy: high on the EU Agenda • Priority of the LU Presidency of the Council of the EU during the 2nd semester of 2015: Luxembourg Declaration + Council Conclusions (December 2015) = to be implemented; • European Parliament + European Economic and Social Committee strongly committed to push the agenda ahead;