social economy in ue

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Te Social Economy

in the European Union

Summary of the Report drawn up

for the European Economic and Social Committeeby the International Centre of Research and Information on the Public,

Social and Cooperative Economy (CIRIEC)



CONTENTS

Introduction 5

Evolution of the Social Economy concept 7

Main theoretical approaches related to the Social Economy concept 13

National concepts of the Social Economy 17

Te components of the Social Economy 21

Te platforms and networks of the Social Economy in Europe 23

Te Social Economy in the European Union in figures 25

Examples of enterprises and organisations in the Social Economy 27

Te Social Economy, pole of social utility 29

Legislation for the Social Economy actors in the European Union 33

Public policies towards the Social Economy in European Union countries 37

Public policies towards the Social Economy at European Union level 39

rends and challenges 41

Bibliography 47

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INTRODUCTION

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Standing Conference of Co-operatives,Mutual societies, Associations andFoundations (CEP-CMAF), the EuropeanFoundation Centre (EFC), ConfederazioneCooperative Italiana (Confcooperative),Lega Nazionale delle Cooperative e Mutue(LEGACOOP) and ConfederaciónEmpresarial Española de la Economía

Social (CEPES). CIRIEC's ScientificCommittee for the SE and the Europeansections of CIRIEC have been activelyinvolved in this work.

Te conceptual delimitation of the SE isbased on the European Commission'sManual on satellite accounts for co-operatives and mutual societies and on theformulations developed by theorganisations that represent the SE inEurope, with the aim of achieving wide

political and scientific consensus.

For the comparative analysis of thecurrent situation of the SE by countries,CIRIEC set up a network of correspondents which was initiallycomposed of 52 experts from 26 EUcountries (academics, sector experts andhighly-placed civil servants).

Tis is a summary of a Report, prepared byCIRIEC (International Centre of Researchand Information on the Public, Social andCooperative Economy) at the request of theEESC (European Economic and SocialCommittee), which consists of a conceptualand comparative study of the situation of the Social Economy (SE) in the European

Union (EU) and its 25 member states. TeReport was completed in 2006 andtherefore does not include Bulgaria orRumania, which joined the EuropeanUnion on 1 January 2007.

Te Report was directed and written byRafael Chaves and José Luis Monzón of CIRIEC, advised by a Committee of Experts composed of D. Demoustier(France), L. Frobel (Sweden) and R . Spear(United Kingdom).

Tey also received assistance from sectorexperts of recognised prestige from theorganisations that represent the differentfamilies within the SE: CooperativesEurope, the International Association of Mutual Societies (AIM), the InternationalAssociation of Mutual InsuranceCompanies (AISAM), the European

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As an activity, the Social Economy (SE) ishistorically linked to grass-rootsassociations and co-operatives, which makeup its backbone. Te system of values and

the principles of conduct of the popularassociations, synthesised by the historicalco-operative movement, are those whichhave served to formulate the modernconcept of the SE, which is structuredaround co-operatives, mutual societies,associations and foundations.

In the EU-25, over 240,000 co-operativeswere economically active in 2005. Tey arewell-established in every area of economicactivity and are particularly prominent inagriculture, financial intermediation,retailing and housing and as workers' co-operatives in the industrial, building andservice sectors. Tese co-operatives providedirect employment to 3.7 million peopleand have 143 million members.

Present-day scope and field of activity

of the Social Economy

1.2

Popular associations and co-opera-

tives at the historical origin of the

Social Economy

1.1 Health and social welfare mutuals provideassistance and cover to over 120 millionpeople. Insurance mutuals have a 23.7%market share.

In the EU-15, in 2002,associations employed7.13 million people and in the UE-25, in2005, they accounted for over 4% of GDP

and a membership of 50% of the citizens of the European Union. In the year 2000 theEU-15 had over 75,000 foundations, whichhave seen strong growth since 1980 in the 25member states, including the recent EUmembers in Central and Eastern Europe.Over 5 million full-time equivalent volunteersare working in the EU-25.

In conclusion, over and beyond itsquantitative importance, in recent decadesthe SE has not only asserted its ability to

make an effective contribution to solving thenew social problems, it has alsostrengthened its position as a necessaryinstitution for stable and sustainableeconomic growth, matching services toneeds, increasing the value of economicactivities serving social needs, fairer incomeand wealth distribution, correcting labourmarket imbalances and, in short, deepening and strengthening economic democracy.

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1EVOLUTION OF THE SOCIAL

ECONOMY CONCEPT



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rades, ourism and the Social Economy.In 1990, 1992, 1993 and 1995 theCommission promoted European SocialEconomy Conferences in Rome, Lisbon,Brussels and Seville. In 1997, theLuxembourg summit recognised the role of social economy enterprises in localdevelopment and job creation and launchedthe "Tird System and Employment" pilot

action, taking the field of the socialeconomy as its area of reference.

In the European Parliament too, theEuropean Parliament Social EconomyIntergroup has been in operation since1990. In 2006 the European Parliamentcalled on the Commission "to respect thesocial economy and to present a com-munication on this cornerstone of theEuropean social model".

Te European Economic and SocialCommittee (EESC), for its part, haspublished numerous reports and opinionson the social economy enterprises' contri-bution to achieving different public policyobjectives.

Te companies and organisations that formpart of the SE concept are not recognisedas a different institutional sector in thenational accounts systems. Co-operatives,mutual societies, associations and founda-tions are dispersed in the national accounts,making them difficult to perceive.

Recently, the European Commission hasdeveloped a Manual for drawing up the

Towards recognition of the Social

Economy in national accounts systems

1.4

Te most recent conceptual delimitation of the SE, by its own organisations, is that of the Charter of Principles of the SocialEconomy promoted by the EuropeanStanding Conference of Co-operatives,Mutual Societies, Associations andFoundations (CEP-CMAF). Te principlesin question are:

• Te primacy of the individual and thesocial objective over capital

• Voluntary and open membership

• Democratic control by the membership(does not concern foundations as theyhave no members)

• Te combination of the interests of members/users and/or the general

interest• Te defence and application of the

principle of solidarity and responsibility

• Autonomous management and indepen-dence from public authorities

• Most of the surpluses are used in pursuitof sustainable development objectives,services of interest to members or thegeneral interest.

Te rise of the SE has also been recognised

in political and legal circles, both nationaland European. At European level, in 1989the European Commission published aCommunication entitled "Businesses inthe 'Économie sociale' sector: Europe’sfrontier-free market". In that same year theCommission sponsored the 1st EuropeanSocial Economy Conference (Paris) andcreated a Social Economy Unit withinDG XXIII Enterprise Policy, Distributive

Present-day identification and

institutional recognition of the Social

Economy

1.3

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and any distribution of profits or surplusesamong the members are not directly linked tothe capital or fees contributed by each member,each of whom has one vote. Te SocialEconomy also includes private, formally-organised organisations with autonomy of decision and freedom of membership that

produce non-market services for householdsand whose surpluses, if any, cannot be

appropriated by the economic agents thatcreate, control or finance them.

Tis definition is absolutely consistent withthe conceptual delimitation of the SEreflected in the CEP-CMAF's Charter of Principles of the Social Economy. In nationalaccounts terms, it comprises two major sub-sectors of the SE: a) the market or businesssub-sector and b) the non-market producersub-sector. Tis classification is very useful

for drawing up reliable statistics andanalysing economic activities in accordancewith the national accounts systemscurrently in force. Nonetheless, from asocio-economic point of view there isobviously a permeability between the twosub-sectors and close ties between marketand non-market in the SE, as a result of acharacteristic that all SE organisationsshare: they are organisations of people whoconduct an activity with the main purpose of meeting the needs of persons rather than

remunerating capitalist investors.

According to the above definition, theshared features of these two sub-sectors of the SE are:

1) Tey are private, in other words, they arenot part of or controlled by the publicsector;

2) Tey are formally organised, that is tosay that they usually have legal identity;

Satellite Accounts of Companies in the SocialEconomy (co-operatives and mutual societies)which will make it possible to obtainconsistent, accurate and reliable data on avery significant part of the SE, that of co-operatives, mutual societies and othersimilar companies.

As the SE enterprise satellite accounts

manual says, the methods used by today'snational accounts systems, rooted in themid 20th century, have developed tools forcollecting the major national economicaggregates in a mixed economy context witha strong private capitalist sector and acomplementary and frequently inter-ventionist public sector. Logically, in anational accounts system which revolvesaround a bipolar institutional reality thereis little room for a third pole which is

neither public nor capitalist, while the lattercan be identified with practically theentirety of the private sector. Tis has beenone important factor explaining theinstitutional invisibility of the social economyin present-day societies and, as theCommission's Manual recognises, it lies atodds with the increasing importance of theorganisations that form part of the SE.

Te working definition of the SE proposedin this report is as follows:

Te set of private, formally-organisedenterprises, with autonomy of decision and

freedom of membership, created to meet their members’ needs through the market by

producing goods and providing services,insurance and finance, where decision-making

A definition of the SE that fits in with

the national accounts systems

1.5



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of voluntary non-profit organisations thatare producers of non-market services for households, even if they do not possess ademocratic structure, as this allows veryprominent social action Tird Sector organisations that produce social or merit

goods of unquestionable social utility to beincluded in the Social Economy.

The market or business sub-sector ofthe SE

Te market sub-sector of the SE is madeup, in essence, of co-operatives and mutualsocieties, business groups controlled by co-operatives, mutual societies and other SEorganisations, other similar companies suchas Spain's labour companies (sociedadeslaborales) and certain non-profit institutionsserving SE companies.

The non-market sub-sector of the

Social Economy

Te great majority of this sub-sector iscomposed of associations and foundations,although organisations with other legalforms may also be found. It is made up of all the SE organisations that the nationalaccounts criteria consider non-marketproducers, i.e. those that supply themajority of their output free of charge or atprices that are not economically significant.

Te SE has positioned itself in Europeansociety as a pole of social utility between thecapitalist sector and the public sector. It iscertainly composed of a great plurality of actors. Old and new social needs allconstitute the sphere of action of the SE.

The Social Economy: pluralism and

shared core identity

1.6

3) Tey have autonomy of decision,meaning that they have full capacity tochoose and dismiss their governing bodies and to control and organise alltheir activities;

4) Tey have freedom of membership, inother words, it is not obligatory to jointhem;

5) Any distribution of profits or surpluses

among the user members, should it arise,is not proportional to the capital or tothe fees contributed by the members butto their activities or transactions with theorganisation.

6) Tey pursue an economic activity in itsown right, to meet the needs of persons,households or families. For this reason,SE organisations are said to beorganisations of people, not of capital. Teywork with capital and other non-monetary resources, but not for capital.

7) Tey are democratic organisations.Except for some voluntary organisationsthat provide non-market services tohouseholds, SE primary level or first-tierorganisations apply the principle of “oneperson, one vote” in their decision-making processes, irrespective of thecapital or fees contributed by themembers. Organisations at other levelsare also organised democratically. Temembers have majority or exclusivecontrol of the decision-making power inthe organisation.

A very important feature of SE orga-nisations that is deeply rooted in theirhistory is democratic control, with equalvoting rights (“one person, one vote”) in thedecision-making process.

However, the working definition of the SEestablished above also accepts the inclusion

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a wide diversity of resources (monetaryfrom the market, public subsidies andvoluntary work) and of agents within theorganisation (members, employees,volunteers, companies and public bodies).

Tis plural SE which is asserting andconsolidating its place in a plural societydoes not signify a hotchpotch with no

identity or interpretative value. On thecontrary, the shared core identity of the SEis fortified by a large and diverse group of free, voluntary microeconomic entitiescreated by civil society to meet and solvethe needs of individuals, households andfamilies rather than to remunerate orprovide cover for investors or capitalistcompanies, in other words, by not-for-profit organisations. Over the past 200years, this varied spectrum (market andnon-market, of mutual interest or of general interest) has shaped the TirdSector, as identified here through the SocialEconomy approach.

Tese needs can be met by the personsaffected through a business operating on themarket, where almost all the co-operativesand mutual societies obtain the majority of their resources, or by associations andfoundations, almost all of which supplynon-market services to individuals,households or families and usually obtainmost of their resources from donations,

membership fees, subsidies, etc.

It cannot be ignored that the diversity of the SE organisations' resources and agentsleads to differences in the dynamics of theirbehaviour and of their relations with theirsurroundings. For instance, volunteers aremainly found in the organisations of thenon-market sub-sector (mostly associa-tions and foundations), while the marketsub-sector of the SE (co-operatives, mutualsocieties and similar companies) haspractically no volunteers except in socialenterprises, which are an evident exampleof a hybrid of market and non-market with



2MAIN THEORETICAL APPROACHES

RELATED TO THE SOCIAL

ECONOMY CONCEPT

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b) Private, i.e. institutionally separate fromgovernment, although they may receivepublic funding and may have publicofficials on their governing bodies.

c) Self-governing , i.e. able to control theirown activities and free to select anddismiss their governing bodies.

d) Non-profit distributing , i.e. non-profitorganisations may make profits but these

must be ploughed back into theorganisation's main mission and not distri-buted to the owners, founder members orgoverning bodies of the organisation.

e) Voluntary, which means two things:firstly,that membership is not compulsory orlegally imposed and secondly, that theymust have volunteers participating intheir activities or management.

Tis approach developed in France andcertain Latin American countries during the last quarter of the 20th century,associated to a large degree with the majorgrowth that the S has experienced inrelation to the new social needs of numerous groups at risk of social exclusion.Te concept of the solidarity economyrevolves around three poles: the market, the

The Solidarity Economy approach

2.3

Te Tird Sector (S) has become ameeting point for different concepts,fundamentally the 'non-profit sector' andthe 'social economy' which, despitedescribing spheres with large overlapping areas, do not coincide exactly.Moreover, thetheoretical approaches that have beendeveloped from these concepts assigndifferent functions to the S in theeconomies of today.

Te main theoretical approach thataddresses the S, apart from the SEapproach, is of English-speaking origin:literature on the Non-Profit Sector or Non-

profit Organizations (NPO) first appeared

30 years ago in the United States. Inessence, this approach only covers privateorganisations which have articles of association forbidding them to distributesurpluses to those who founded them orwho control or fund them.

Tese organisations are:

a) Organisations, i.e. they have an institu-tional structure and presence. Tey areusually legal persons.

The Non-Profit Organisation approach

2.2

The Third Sector as a meeting point

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However, there are three S delimitationcriteria where the NPO and SE approachesclearly differ:

a) The non-profit criterion

In the NPO approach, all the organisationsthat in any way distribute profits to thepersons or organisations that founded themor that control or fund them are excluded

from the S. In other words, Sorganisations must apply the non-distribution constraint strictly. As well asnot distributing profits, the NPO approachdemands that S organisations be not-for-profit, in other words, they may not becreated primarily to generate profits orobtain financial returns.

In the SE approach, the non-profit criterionin this sense is not an essential requirementfor S organisations. Naturally, the SEapproach considers that many organisationswhich apply the non-profit criterion strictlybelong in the S: a broad sector of associations, foundations, social enterprisesand other non-profit organisations serving persons and families that meet the NPOnon-profit criterion and all the SEorganisation criteria established in thisreport. However, whereas co-operatives andmutual societies form a decisive nucleus of the SE, they are excluded from the S by the

NPO approach because most of themdistribute part of their surpluses among theirmembers.

b) The democracy criterion

A second difference between the NPOapproach and the SE approach is theapplication of the democracy criterion. TeNPO approach's requirements forconsidering that an organisation belongs to

State and reciprocity. Te latter refers to anon-monetary exchange in the sphere of primary sociability, identified above all withmembership of associations. Te solidarityeconomy approach is an attempt to hook upthe three poles of the system, so the specificexperiences organised within it formhybrids between the market, non-marketand non-monetary economies and their

resources are also plural in origin: market(sales of goods and services), non-market(government subsidies and donations) andnon-monetary (volunteers).

Te solidarity economy approach presentsimportant elements of convergence with theSE approach, so much so that theexpression Social and Solidarity Economy isalso employed. Also, from the practicalpoint of view, all the organisations that areconsidered part of the solidarity economyare also unquestionably part of the SE.

Because of their importance, the mainresemblances and differences between theSE approach and the NPO approach areexamined here below.

As regards the resemblances between the SEand the NPO approaches, four of the fivecriteria that the NPO approach establishesto distinguish the S sphere are alsorequired by the SE approach: private, formallyorganised organisations with autonomy of decision (self-governing) and freedom of membership (voluntary participation).

Resemblances and differences

between the Social Economy concept

and the Non-Profit Organization

approach

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tier organisations, most of the beneficiariesof their activities are individuals,households or families, whether asconsumers or as individual entrepreneurs orproducers. Many of these organisationsonly accept individuals for membership. Onoccasion they may also allow legal personsof any type to become members, but inevery case the SE's concerns centre on

human beings, who are its reason for being and the goal of its activities.

Te NPO approach, on the other hand, hasno criterion that considers service to peoplea priority objective. Non-profitorganisations can be set up both to provideservices to persons and to provide them tocorporations that control or fund theseorganisations. Tere may even be first-tiernon-profit organisations composedexclusively of capital-based companies,whether financial or non-financial. As aresult, the field analysed by the NPOapproach is very heterogeneously defined.

In conclusion, the above resemblances anddifferences between the NPO and SEapproaches, together with the existence of a shared space composed of organisationsincluded by both, make it possible toappreciate important conceptual andmethodological divergences which do not

allow the S to be configured by simplyadding together the groups of organisationsconsidered by the two approaches.

Concerning the differences between the twoapproaches as regards the functions that theS can perform in developed economies, sofar as the NPO approach is concerned theS lies between the State and the market andthe mission of its most characteristic nucleus

the S do not include such a characteristicelement of the SE concept as democraticorganisation. Consequently, in the NPOapproach the S includes many, and veryimportant, non-profit organisations that donot meet the democracy criterion and areconsequently excluded from the S by theSE approach. Indeed, many non-profitinstitutions in the non-financial

corporations and financial corporationssectors that sell their services at marketprices do not meet the democraticorganisation principle. Tese non-profitorganisations which are considered part of the S by the NPO approach and not bythe SE approach include certain hospitals,universities, schools, cultural and art bodiesand other institutions which do not meetthe democracy criterion and sell theirservices on the market, while meeting all therequirements set by the NPO approach.

In the SE approach any non-profit entitiesthat do not operate democratically aregenerally excluded from the S, although itis accepted that voluntary non-profitorganisations which provide non-marketservices to persons or families free of chargeor at prices which are not economicallysignificant can be included in the SE. Tesenon-profit institutions justify their socialutility by providing merit goods or services

free to individuals or families.

c) The criterion of serving people

Finally, a third difference lies in the intendedrecipients of the services provided by theS organisations, as their scope andpriorities differ between the NPO and theSE approaches. In the SE approach, themain aim of all the organisations is to servepeople or other SE organisations. In first



Te social and economic reality which inthis work we refer to as the ‘SocialEconomy’ is widespread and in evidentexpansion throughout the European Union.However, this term as well as its scientificconcept, is not unambiguous across all thedifferent countries of the Union, and insome cases not even within a single country,but usually coexists with other terms andsimilar concepts.

In accordance with the methodology usedin the study of he enterprises andorganizations of the third system. A strategicchallenge for employment (CIRIEC 2000),this research1 aimed, firstly, to assess thelevel of recognition of the Social Economyin three important spheres, namely publicadministration, the academic andscientific world and the Social Economy

sector itself in each country, and, secondly,to identify and assess other similarconcepts.

1 Te primary information gathering was based on a semi-open questionnaire addressed to the team of correspondents, all of whom are privileged witnesses with an expert knowledge of the concept of theSocial Economy and similar terms and of the reality of this sector in their respective countries. Tedegree of recognition has been divided into three relative levels across the different countries: (•) scantor no acceptance of this concept; (• •) a medium level of acceptance; and (• • •) a high level of acceptance.

Te results allow three groups of countriesto be identified:

– Countries with the greatest acceptance of theconcept of the SE: France, Italy, Portugal,Spain, Belgium, Ireland and Sweden. Tefirst four countries (all of them Latin)stand out, especially France, thebirthplace of this concept. In France, as inSpain, the SE is recognised in law.

– Countries with a medium (relative) level of acceptance of the concept of the SE: Teseare Cyprus, Denmark, Finland, Greece,Luxembourg, Latvia, Malta, Poland andthe United Kingdom. In these countriesthe concept of the SE coexists alongsideother concepts, such as the Non-Profitsector, the Voluntary sector and that of Social Enterprises. In the UnitedKingdom, the low level of recognition of the SE concept contrasts with the

Government's policy of support for socialfirms. In Poland it is quite a new conceptbut is increasingly accepted, fostered

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(the social third sector) consists in satisfying a considerable quantity of social needs thatare not being met either by the market (dueto a lack of solvent demand with purchasing power) or by the public sector (as publicfunding is incapable of doing so), making itessential to turn to a third type of resourcesand motivations. Te Anglo-Saxon concept,based on volunteers, charities (in Britain) and

foundations (United States), insists on thevalues of philanthropy and the non-profitcriterion.

Te lack of profitability of the work carriedout demonstrates the purity and rectitudeof the motives that underlie it and confirmsmembership of the S, which therebyshows its charitable and welfare nature, itsmission being to palliate the shortcomingsof an ungenerous public social protectionsystem and the excesses of a market systemthat is more dynamic but also moreimplacable than any other system towardsless solvent social sectors.

For the SE approach, the S is not locatedbetween the market and the state butbetween the capitalist sector and the publicsector. From this point of view, in developedsocieties the S is positioned as a pole of social utility made up of a broad set of

private organisations that are created tomeet social needs rather than to remuneratecapitalist investors.

At all events, the concept of the Sdeveloped by the SE does not consider it aresidual sector but an institutional pole of the system which, together with the publicsector and the capitalist private sector, is a

key factor for consolidating welfare indeveloped societies by helping to solve someof their most prominent problems, such associal exclusion, large-scale long-termunemployment, geographical imbalances,local self-government and fairer income andwealth distribution, among others.

Unlike the NPO approach, which mainlysees the S as having a charitable andphilanthropic role and developing one-waysolidarity initiatives, the SE also promotesbusiness initiatives with reciprocal solidarityamong their initiators, based on a system of values where democratic decision making and the priority of people over capital in thedistribution of surpluses prevail.

Te SE does not just see people in need as the passive beneficiaries of social philanthropy, italso raises citizens to the status of active

protagonists of their own destiny.

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3NATIONAL CONCEPTS OF THE

SOCIAL ECONOMY



Belgium • • • • • • •

France • • • • • • • •

Ireland • • • • • • •

Italy • • • • • • • •

Portugal • • • • • • • • •

Spain • • • • • • • • •

Sweden • • • • • • •

Austria • • • • •

Denmark • • • • •

Finland • • • • • •

Germany • • • •

Greece • • • • • •

Luxembourg • • • • • •

Netherlands • • •

United Kingdom • • • •

Cyprus • • • • • •

Czech Republic • • • •

Estonia • • • •

Hungary • • •

Latvia • • • • • •

Lithuania • • • •

Malta • • • • • • •

Poland • • • • • •

Slovakia n/a n/a n/a

Slovenia • • • • •

particularly by the structuring effect of the European Union;

– Countries with little or no recognition of theconcept of the SE: In a group of countriescomposed of Austria, the Czech Republic,Estonia, Germany, Hungary, Lithuania,the Netherlands and Slovenia, a groupwhich mainly comprises countries that

joined the European Union in the latestenlargement and Germanic countries, theconcept of the SE is little known orincipient, while the related concepts of theNon-Profit Sector, Voluntary Sector andNon-Governmental Organizations sectorenjoy a greater level of relative recognition.

In addition to the concepts of the SocialEconomy, Non-profit Sector, Social

Enterprises and hird Sector, other widelyaccepted notions coexist in severalcountries of the Union. In the UnitedKingdom, Denmark, Malta and Slovenia,the concepts of Voluntary Sector andNon-Governmental Organizations, moreclosely related to the idea of Non-ProfitOrganizations, would appear to enjoywide scientific, social and political

recognition. Confined to the French-speaking European countries (France, theWalloon Region of Belgium andLuxembourg), the concepts of theSolidarity Economy and the Social andSolidarity Economy are also recognized,while the notion of Gemeinwirtschaft(General Interest Economy) is well-established in Germanic countries such asGermany and Austria.

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Table 1. Degree of national acceptance of the 'Social Economy' concept

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CountryBy the public

authorities

Bysocial economy

companies

By theacademic/scientific

world

New member states



4THE COMPONENTS OF THE

SOCIAL ECONOMY

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employment centres, joint organisations withworker participation, voluntary organisationsand pro-social associations.

In several countries certain components of the SE in the broad sense do not recognisethemselves as being integral parts of thissocial sector; on the contrary, they asserttheir idiosyncrasy and isolation. Tis is thecase of co-operatives in countries such asGermany, the United Kingdom or Latviaand, partially, in Portugal.

Less recognition that mutual societies(friendly societies) are part of the SE isfound in some of the new Member Statesof the European Union. Explanations forthis situation may be found in the low levelof recognition of the very concept of the SE,together with the absence of a legal status

for these institutional forms in thesecountries.

Concerning the institutional forms thatmake up the SE or the related term whicheach country deems most recognized, it hasbeen found that these vary significantlyfrom one country to another but that all of them share a nucleus of genuine nationalforms, comprising Co-operatives, MutualSocieties, Associations and Foundations,which the experts consider belong to the SEin their country.

Alongside these four structural components,other specific forms are also mentioned, suchas social firms, misericordias (Portuguesecharitable associations), instituições

particulares de solidariedade social (Portugueseprivate social solidarity institutions),development agencies, communityfoundations, istituzioni di pubblica assistenza ebeneficenza (Italian charitable institutions),

sociedades laborales (Spanish labourcompanies), integration enterprises, special



5THE PLATFORMS AND NETWORKS

OF THE SOCIAL ECONOMY

IN EUROPE

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CEDAG (voluntary associations),EFC (foundations), European Platformof Social NGOs, CEFEC (social firms,employment initiatives and socialco-operatives).

Most of these European-level repre-sentation organisations are in turnmembers of CEP-CMAF, the EuropeanStanding Conference of Co-operatives,Mutual societies, Associations andFoundations, which is currently the topEuropean SE interlocutor for the Europeaninstitutions.

In some countries the representativeassociations have surpassed the sector leveland created intersectorial organisations thatexplicitly refer to the SE. Examples of theseare CEPES, the Spanish Business

Confederation of the Social Economy; itscounterpart in France, CEGES, the Councilof Social Economy Enterprises, Employersand Organisations in Belgium the FlemishVOSEC and the Walloon CONCERESorganisations; the Social and SolidarityEconomy Platform in Luxembourg and theSocial Economy Standing Conference inPoland.

Self-recognition as a differentiated socio-economic sphere can be seen when there aresolid organisations representing the sector.Trough these organisations, not only doesthe ES acquire visibility, it can also take partand defend its own specific interests in theprocess of drawing up and applying nationaland EU public policies.

In the different European countries, theassociations that represent SE companiesand organisations have mainly arisen from asector perspective, giving rise to 'family'groups of representative organisations:

– Co-operative family:EUROCOOP (retail), ACME(insurance), CECODHAS (housing),CECOP (production/workers),COGECA (farming), GEBC (banking),UEPS (pharmacies).

Tese, in turn, are members of a recentlyfounded umbrella organisation:Cooperatives Europe.

– Mutual society family:AIM (mutual societies), ACME(insurance), AISAM (mutualinsurance).

– Association and social action organisationfamily:



6THE SOCIAL ECONOMY IN THE

EUROPEAN UNION IN FIGURES2

2 Te statistical information on the SE in Europe is based on secondary data and mainly refers to 2002-2003. For some countries, essentially the new EU member states, no quantitative data existed prior tothis study and this information should be treated with caution.

25

member states (7.0%) and in countries suchas the Netherlands (10.7%), Ireland(10.6%) or France (8.7%).

Te family of associations, foundations andsimilar organisations (3rd column of figures), taken as a whole, is the majoritycomponent of the European SE. However,in the new member countries and in Italy,Spain, Finland and Sweden, the majorityfamily is that of co-operatives and similar.

From a macroeconomic perspective, thesocial economy in Europe is very importantin both human and economic terms. Itemploys over 11 million people, equivalentto 6.7% of the wage-earning population of the EU.

In the ten new EU member countries, thoseemployed in the SE account for 4.2% of thewage-earning population. Tis is a lowerpercentage than the average in the 'old' 15



Belgium 17,047 12,864 249,700 279,611France 439,720 110,100 1,435,330 1,985,150Ireland 35,992 650 118,664 155,306Italy 837,024 note* 499,389 1,336,413

Portugal 51,000 note* 159,950 210,950Spain 488,606 3,548 380,060 872,214Sweden 99,500 11,000 95,197 205,697Austria 62,145 8,000 190,000 260,145Denmark 39,107 1,000 120,657 160,764Finland 95,000 5,405 74,992 175,397Germany 466,900 150,000 1,414,937 2,031,837Greece 12,345 489 57,000 69,834Luxembourg 748 n/a 6,500 7,248Netherlands 110,710 n/a 661,400 772,110United Kingdom 190,458 47,818 1,473,000 1,711,276

Cyprus 4,491 n/a n/a 4,491Czech Republic 90,874 147 74,200 165,221Estonia 15,250 n/a 8,000 23,250Hungary 42,787 n/a 32,882 75,669Latvia 300 n/a n/a 300Lithuania 7,700 0 n/a 7,700Malta 238 n/a n/a 238Poland 469,179 n/a 60,000 529,179Slovakia 82,012 n/a 16,200 98,212Slovenia 4,401 270 n/a 4,671OAL 3,663,534 351,291 7,128,058 11,142,883

Table 2. Paid employment in co-operatives, mutual societies, associations and similar organisationsin the European Union (2002-2003)

Country Co-operativesMutualsocieties

Associations OAL

* Te data for mutual societies are aggregated with those for co-operatives in Italy and for associationsin Portugal.

7EXAMPLES OF ENTERPRISES

AND ORGANISATIONS IN THE

SOCIAL ECONOMY

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– Association of Lithuanian Credit Co-operatives, an organisation for financialinclusion (www.lku.lt)

– Dairygold Agricultural Co-operative Society:supporting farmers (www.dairygold.ie)

– Anecoop: a farming cooperative groupthat harmonises local and agricultural de-velopment with technological innovation(www.anecoop.com)

– Estonian Union of Co-operative Housing Associations, over 100,000 people living inco-operative housing (www.ekyl.ee)

– COFAC, the biggest Portuguese universityco-operative generating knowledge andhuman capital (www.ulusofona.pt)

– Cooperación y Desarrollo de Bonares:local-level public/private cooperation anddevelopment (www.bonares.es)

– Co-operative Society of Cyprus MarineServices (COMARINE)

(www.comarine.com.cy)– Consorzio Beni Culturali Italia: the first

service to culture is to create culture(www.consorziobeniculturali.it)

– Britannia building society: the second-largest building society in the UnitedKingdom (www.britannia.co.uk)

– Vzajemna, health and medical careinsurance (www.vzajemna.si)

o complement the macroeconomic data,the dynamism and socio-economic richnessof the SE in Europe is also apprehendedthrough specific cases that testify to theplurality of responses which the SE offersto the multiple needs and aspirations of European society, reveal the wealth of formsthat these organisations adopt and make itclear that despite the diversity of specific

dynamics it is possible to identify a sharedthread: that of their membership of a socio-economic sector located between thetraditional capitalist private economy andthe public economy.

Te following cases, selected with the helpof the study's correspondents in eachcountry, illustrate the heterogeneity of SEpractice in Europe:

– Cooperativa Sociale Prospettiva: labourintegration of the most disadvantagedthrough making artistic ceramics(www.prospettivacoop.it)

– Chèque Déjeuner Co-operative: job creationwith values (www.cheque-dejeuner.com)

– Irizar Group: the second-biggestEuropean luxury coach manufacturermanufacturer (www.irizar.com)

– Multipharma, a great pharmaceutical co-operative (www.multipharma.be)



8THE SOCIAL ECONOMY,

POLE OF SOCIAL UTILITY

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– Fondazione Cariplo: resources to help civicand social institutions provide a betterservice to the community(www.fondazionecariplo.it)

– rångsviksbolaget AB, a communitybusiness in the north of Sweden(www.once.es)

– ONCE, the Spanish organisation of theblind, integrates handicapped people into

the labour market and provides socialservices )

– Association for Mutual Help Flandria,access to complementary health services(www.flandria.pl)

– MACIF , the biggest mutual society inFrance (www.macif.fr)

– apiola Group, insurance, banking,savings and investments (www.tapiola.fi)

– Te Benenden Healthcare Society(www.benenden-healthcare.org.uk)

– Shelter, a great charity for the homeless(www.england.shelter.org.uk)

– Alte Feuerwache Köln, self-managedsocio-cultural centre(www.altefeuerwachekoeln.de)

– Artisans du Monde, the first associationfor fair trade with the third world(www.artisansdumonde.org)

– Motivacio, a foundation for socialintegration of the handicapped(www.motivacio.hu)

29

sector which brings a kind of developmentthat puts people first.

Te spheres with the highest scientific, socialand political consensus concerning recognition of the social value addedcontributions of the SE are social cohesion,employment, generating and maintaining the social and economic fabric, the

development of democracy, socialinnovation and local development.However,the SE also makes notable contributions toa fairer distribution of income and wealth,to creating and providing welfare services(such as social, health and social securityservices), to sustainable development, togreater democracy and involvement by thepublic and to increasing the efficiency of public policies.

Social cohesion: Complementing and, aboveall, paving the way for public action in thestruggle against social exclusion, the SE hasdemonstrated its capacity to increase thelevels of social cohesion on two ways. In thefirst place, it has contributed to the socialand work integration of clearlydisadvantaged people and geographicalareas; this has been particularly evident inthe case of associations, foundations, and

Te concept of the SE is closely linked tothe concepts of progress and social cohesion.Te contribution to European society madeby Cooperatives, Mutual Societies,Associations, Foundations and other socialenterprises far transcends the contributionwhichin strictly economic terms the GDP iscapable of reflecting, which is by no meanssmall. Te potential of this social sector to

generate social added value is great, as is itsmulti-dimensional and markedly qualitativerealisation, which is why it is not always easyto perceive and quantify.In fact, it continuesto defy methods for the evaluation of wealthand well-being.

Many studies have shown that the SEforms a space that regulates the system inthe interests of achieving a more balancedmodel of social and economic development.

Tis regulatory role shows itself on differentlevels, such as in the definition of socio-economic activities, in the accessibility of services (geographically, socially, financiallyand culturally), in its ability to fit services toneeds and in its ability to generate stabilityin a context of eminently cyclical economies.Te capacity of the SE to generate newopportunities for society has also beenshown, as has the fact that this is a social



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culture and a business fabric; d) it can hook up the generation and/or expansion of economic activity to local needs (e.g.community services) and/or the localproductive fabric; e) it can maintaineconomic activities at risk of disappearing owing to lack of profitability (e.g. crafts) orstrong competition (traditional industries);f) it can generate social capital as Putnam

understands it, as the fundamentalinstitutional foundation for fostering sustained economic development.

Equally, certain properties of the SE havebeen highlighted by the current context of globalisation, where relocations of pro-duction processes are constantly challenging the regions: the authentic SE form of control and decision-making, based ondemocratic principles and citizenparticipation, tends to keep the reins of the

economic process within the civil society of its own area (unlike capital investors),anchoring enterprises better within thecommunity and giving the local area greaterautonomy to define its own model of development.

Innovation: Te SE's capacity for inno-vation, in the different dimensionsidentified by Shumpeter (product, process,market and organisation), is no less

important, especially in the processes of change within European society. Te directcontact between this social sector andsociety endows it with a special capacity fordetecting new needs, channelling them intothe public administration and traditionalprofit-making private enterprises and,where appropriate, coming up with creativeinnovatory responses. In the nineteenthcentury, for example, mutual assistance

insertion and other social enterprises, whichhave reduced poverty and exclusion levels.In the second place, via the SE, society hasincreased its level of democratic culture, hasboosted its degree of social participationand has managed to give a voice andnegotiating capability to social groupspreviously excluded from the economicprocess and from the process of drafting

and applying public policies, especially thoseformulated at local and regional levels.

Local and regional development: Te SE alsoconstitutes a strategic motor for local andregional development. Indeed, it shows agreat potential for activating endogenousdevelopment processes in rural areas, forreactivating declining industrial areas andfor rehabilitating and revitalising run-downurban areas, in short, for contributing toendogenous economic development,

restoring competitiveness to extensive areasand facilitating their integration at nationaland international level, rectifying significantspatial imbalances. Tis capacity issupported by arguments that fit in with theconceptual parameters of the SwedishNobel prizewinner Gunnar Myrdal'seconomic development theory, as itpromotes spread effects (local-leveldevelopment and accumulation processes)and minimises the regression or backwash

effects: a) given its authentic profit andsurplus distribution logic, it shows a greaterpropensity to reinvest the profits in thegeographical area where they weregenerated; b) it is able to mobilise not onlythe agents with the best knowledge of theirmedium and in the best position to initiatesuitable initiatives, but also the resourcesthat exist at local level; c) it is capable of creating and spreading entrepreneurial

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ministries of work and social affairs thattend to be responsible for fostering the SE.Te European Union's Lisbon Strategyitself expressly recognizes the SE as the coreof its employment policy.

In particular, the SE has contributed tocreating new jobs, retaining jobs in sectorsand businesses in crisis and/or threatened

by closure, increasing job stability levels,bringing jobs out of the black economy intothe official one, keeping skills alive (e.g.crafts) and exploring new occupations (e.g.social educator) and developing routes intowork for groups that are especiallydisadvantaged and falling into socialexclusion. Over the last few decadesstatistical data have shown that it is apowerful job-creating sector in Europe,with greater sensitivity to employment thanthe other sectors of the economy (see

CIRIEC 2000).

Nonetheless, the SE, on its own, does notconstitute a panacea for Europe. Majorspecific problems limit its potential. Aserious problem, from a macroeconomicviewpoint, is the exaggerated atomization of the sector and its initiatives and itsstructural resistances to forming groups.Another big problem is the structuraltendency in the SE organisations to find

their specific features being watered down,or even to become traditional for-profitcompanies, in the case of the SE companiesthat are most involved in the market, or tobecome instrumentalised by governmentbodies, or even dependant (particularlyfinancially) on them, when their habitualrelations are with the authorities. Tisphenomenon is known as organisationalisomorphism. If it really wants to develop its

societies and friendly societies werepioneers in responding to the needs of thenew industrial society by covering healthrisks and were associated with sustaining the income of the working class, shaping momentous social and institutionalinnovations which were the forerunners tothe creation of public social security systemsin Europe. Te many ways in which these

SE organizations were linked to thisprocess is reflected in the variety of socialsecurity models.

In the sphere of technological innovation,too, especially in contexts where SEinnovation systems are developed, thegeneration and dissemination of new ideasand innovations has shown higher successrates. A key factor in these systems is thestable alliance between the different agentsof a region involved in fostering the SE,

such as the government agencies in chargeof these matters, the universities, thefederations and the business sector of theSocial Economy itself. Some examples areQuebec, the Mondragón CooperativeCorporation and the CEPES-Andalusiasystem in the South of Spain.

Innovation has not received balancedfunding from public authorities and privateinstitutions, however. Preference has been

given to financing technological innovationrather than other forms of innovationwhere the SE is a g reater leader.

Employment: It is in the regulation of thenumerous imbalances in the labour marketthat the social value added by the SEbecomes most visibly and explicitlyapparent.It is hardly surprising that among the European governments it is the

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9LEGISLATION FOR THE SOCIAL

ECONOMY ACTORS IN THE

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and evens out social and economicimbalances in a plural society and economy.

Te economies and societies of the newmember states are going through lengthyprocesses of transition from Communistplanning systems to regulated marketeconomies. Te adjustments they havemade in recent years have had serious

consequences for their respective SEs,particularly in the co-operative sector,which was instrumentalised for manydecades and even during the transition to amarket system. Nonetheless, contrary to thepredictions of some, this sector has notbeen dismantled on a large scale. Mutualsocieties, associations and foundations, fortheir part, after half a century when theyvirtually disappeared, are experiencing agradual rediscovery and expansion intandem with the development of civil

society, social movements and trade unionsin these countries.

Developing this 'third pillar' is of interest tothe new member states if they wish tofollow the European model of developmentand achieve fast, adequate integration intothe European social model.

full potential, the SE needs to createmechanisms to resist this dilution ordegeneration, organise self-sustaining development mechanisms that will preventits becoming dependent on the other twosectors and forge alliances. From themicroeconomic point of view the mainproblems are, on the one hand, the difficultythat SE companies and organisations have

in attracting capital to finance theirinvestments and activities and, on the other,their tensions in retaining strategic humanresources.

Building Europe: Historically, the SE has notbeen unconnected with the project of building Europe, from the reaty of Rome,which explicitly acknowledged thecooperatives as forms of entrepreneurship,to the European Constitution project,which refers to a social market economy. o

reach the levels of welfare and progress thatthe 'Western' countries of the EuropeanUnion enjoy, the European social andeconomic model has needed thecontribution of the SE, which has provedcapable of occupying a space that balanceseconomic and social aspects, mediatesbetween public institutions and civil society

33

In the case of the cooperatives, which areexplicitly recognized in Article or Section48 of the reaty of Rome as a specific typeof company and also in the constitutions of various member states, like Greece, Italy,Portugal and Spain, although they have aregulatory framework within which theycan operate and which guarantees the rightsof members and third parties there is not

always a specific law at national level thatregulates all cooperatives. Indeed, certaincountries such as Denmark, the CzechRepublic or the United Kingdom lack general laws on co-operatives although theyhave some laws for specific types of cooperative, like housing cooperatives in thecase of Denmark or credit cooperatives orcredit unions in the United Kingdom andthe Czech Republic.Tis contrasts with thesituation in other countries like Spain, Italy

or France, which suffer from legislativeinflation in this area, with different lawsaccording to the type of cooperative andlevel of government (national and regional).

An analogous situation is found in thedifferences in legal status of the formstaken by the SE in Europe. hree groupsof countries may be identified: the firsthas specific legislation for the SE forms,

Tis important social sector is widelyrecognised by the institutions of the variousEU countries in terms of legislation andpolicies.

Te statutory provisions defining thisframework establish three types of recognition of this sector: 1) explicitrecognition by the public authorities of the

different identity of these organizations,which require special treatment. In thisrespect, the purpose of the code of law is toestablish them as Private Agents; 2)recognition of these organisations' capacityand liberty to operate in any sector of economic and social activity; 3) recognitionof the SE's role as an interlocutor in theprocess of drawing up and applying different public policies, viewing it as co-decision maker and co-executor of the

policies.

In Europe, the different forms of the SE donot always enjoy an adequate level of institutionalization in these three areas.

As far as the first is concerned, not all formsof the SE are recognised to the same extentin the legal systems of the differentcountries of the European Union.

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United Kingdom, or where these legalforms had been increasingly losing socialprestige through being considered vestigesof the old regime, as in the new members inCentral and Eastern Europe.

Equally, the removal of the proposals for aEuropean Mutual Society Statute and aEuropean Association from the European

Commission's agenda in the past few yearshas been a serious setback to providing greater opportunities for the deployment of these forms of the SE in this continent.

Te specificity of the organisations in theSE is based on certain characteristic valuesand principles. Te purpose of the rulesthat govern these organisations is to reflectthis specificity, laying down the principle of democratic decision-making andlimitations on how profits and surpluses are

distributed, among others. However, thisspecific modus operandi is not neutral. Teuse of these legal forms occasions thefounding groups and economic agentsrelatively higher operating expensescompared to other forms of privatecompany. Te expenses entailed by thespecific features of the SE organisationsrespond to their internalisation of socialcosts, linked to the democratic decision-making process, the way that surpluses are

allotted and the nature of the goods andservices produced, which are basically of social and/or general interest, compared tothe externalisation of private costs bytraditional for-profit private companies.

From the perspective of guaranteeing equalopportunities among different types of organization, and given that unequalsituations call for differences in treatment,

the second has some statutory provisionscovering SE organisations scatteredamong different laws and the third lacksany trace of legislation governing certainforms of the SE.

Shortfalls in the legislation can causeserious difficulties as regards the legalposition of groups that wish to set up SE

organisations: the legal framework can actas a brake on the deployment of new formsif the existing ones cannot be adapted tonew necessities. In this respect, the objectiveof the new legislation that has appeared inrecent years in different countries, like thespecific laws concerning social companies(Act of 2003 in Finland, Act of 2004 inLithuania and Act 118/2005 in Italy),social cooperatives (Acts of 2006 in Polandand Portugal) and non-profit organizationsof social utility (Decree 460/1997 in Italy)

or the modifications to existing laws toreflect new forms (like the cooperativesocieties of collective interest created in2001 in France, or the social initiativecooperatives that have appeared in recentyears in the different laws concerning Spanish co-operatives), has been to providea channel for the development of anemerging 'New Social Economy'. Te recentlegislation passed in the last few years inseveral of the new European Union

member states is particularly significant.

At the European level, the new Statute fora European Co-operative Society is alreadyfavouring the spread of this form of the SE,not only improving the possibilities of theEuropean co-operatives' conducting transnational activities but also, above all,developing the sector in countries whichlack their own statute, as in the case of the

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many countries that have a special taxsystem do not extend it to all co-operatives.In Ireland, for instance, it is only applicableto credit unions and in Greece only toagricultural cooperatives.

Te institutional framework also definesthe SE's margin for action in the differentsectors of social and economic activity.

Although the statutory provisions for theforms of the SE recognise their right tooperate freely in the market like any otherprivate agent, sector regulations can raisebarriers to their entering certain fields of activity and developing freely within them.In the case of mutual societies, threepatterns of development by economicsectors can be observed:there are countrieswhere mutuals can operate in numerousfields, as in the United Kingdom, wherethey can engage in activities ranging from

water supplies to sports; another group of countries confines their field of action tocertain sectors, such as healthcare or healthand safety cover; while the final group doesnot possess this legal form. Additionally,where sector rules prevent risks being mutualised, insurance co-operatives andmutual insurance societies cannot be set up.Te situation is similar for co-operatives inother sectors of the economy.

the legal framework should institutemeasures to compensate for the operationaldifficulties suffered by legal forms thatafford poorer opportunities. Tesemeasures may be grants but they can alsotake the form of tax concessions. At thesame time, however, lawmakers should setup suitable mechanisms to prevent certaineconomic agents from behaving

opportunistically and taking advantage of the compensations for adopting these formswithout shouldering their respective costs.

In most countries in the western part of theEuropean Union, the four main legal formstaken by the SE enjoy some kind of specifictax treatment. Te benefits of such specialfiscal measures are more abundant forassociations and foundations, on thegrounds of their non-profit nature and theway they assign resources and surpluses,

which give priority to activities of socialand/or general interest. Such legislation hasbeen strengthened in recent years in anumber of countries, such as Spain's Act43/2002 passing its NPO taxation system,Italy's Act 460/1997 on the ONLUS ornon-profit organisations of social utility andGermany's 'Social Law Code'(Sozialgesetzbuch) governing non-profitorganisations. As regards co-operatives,



10PUBLIC POLICIES TOWARDS

THE SOCIAL ECONOMY

IN EUROPEAN UNION COUNTRIES

37

European Union has been patchy in bothits extent and its content.

Many countries in the EU have a high-levelbody within the national government withexplicit, acknowledged responsibility formatters relating to the SE. Tis is the caseof the Belgian government's Secrétariatd'État au développement durable et à

l'économie sociale (Secretary of State forSustainable Development and the SocialEconomy), the Dirección General deEconomía Social (Social EconomyDirectorate-General) of the SpanishMinistry of Labour and of several of theregional governments, the Frenchgovernment's Délégation interministérielleà l'innovation, à l’expérimentation sociale età l’économie sociale (InterministerialDelegation for Innovation, Social

Experimentation and the Social Economy),the Social Economy Unit – FAS in Ireland,the Direzione generale per gli enticooperative, Ministero dello sviluppoeconomico (Directorate General for co-operative bodies, Ministry of EconomicDevelopment) and the Agenzia per leOnlus (Agency for Socially ResponsibleNon-Profit Organizations) in Italy, theNGO Liaison Unit in the Maltese

Over the last quarter of a century therehave been numerous national andregional governments within theEuropean Union which have deployedpublic policies with explicit references tothe social economy in its entirety or to itscomponents. In general, they haveformulated sector policies which haveincluded explicit references, albeit

fragmentary and disjointed, to theinstitutional forms that make up thesocial economy. he examples includeactive employment policies involving workers' co-operatives and integrationenterprises, social services policies, whereassociations, foundations and other non-profit organisations have played a keyrole, agricultural and rural developmentpolicies, in which the agricultural co-operatives have been involved, or

references to mutual provident societiesin the framework of social securitysystems. More recently, and singularly,

polic ies specif ic to the SE have emerged,some centred on businesses whichoperate in the market place and othersaimed at non-profit organizations thatoperate outside the market, but seldomcovering both. However, the deploymentof these policies in the countries of the

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11PUBLIC POLICIES TOWARDS THE

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varied catalogue of types. Depending on thenature of the instruments they employ, theycan be classified as institutional policies,policies of diffusion, training and research,financial policies, policies of support withreal services and demand policies.

Government's Ministry for the Family andSocial Solidarity, Portugal's InstitutoAntónio Sérgio do Sector Cooperativo(INSCOOP) and, in the United Kingdom,the Cabinet Office's Social Enterprise Unitand the reasury's Charity and TirdSector Finance Unit.

Te policies that have in fact been

implemented to foster the SE present a

39

have created a ‘Social Economy Category’.Te EESC has been especially active inrecent years and has issued severalOpinions.

– the European Parliament. It first set up aEuropean Parliament Social EconomyIntergroup in 1990.

Another body is the Consultative

Committee of Cooperatives, Mutuals,Associations and Foundations(CCCMAF). It was set up in 1998 to giveits opinion on the different mattersconcerning the promotion of the SE atEuropean Union level. Te Committee wasabolished in 2000, after the restructuring of the Commission, but at the initiative of thesector organizations themselves, theEuropean Standing Conference of Co-operatives, Mutual Societies, Associations

and Foundations (CEP-CMAF) wasimmediately activated as a Europeanplatform to act as the interlocutor of theEuropean institutions.

When implementing measures, the EUinstitutions keep meeting a two-prongedproblem in relation to the social economy:its scanty legal foundation and itsinsufficient conceptual definition, struggling

Te attention paid to the SE by thedifferent EU authorities has been growing over the last three decades, albeitintermittently and with differences betweeninstitutions. Te important role of the SEin the social and economic development of Europe has progressively been gaining recognition and with this, its position as acornerstone of the European Social Model.

Te long march towards institutionalrecognition of the SE and the structuring of specific European policies started in the1980s. It culminated in 1989 with theCommunication from the Commission tothe Council on “Businesses in the 'ÉconomieSociale' sector: Europe’s frontier-freemarket”, which proposed that a Europeanlegal basis in the form of Statutes beestablished for co-operatives, associations

and mutual societies, and with the creationof the Social Economy Unit in EuropeanCommission Directorate-General XXIII.

wo other EU institutions have beenimportant champions of the SE:

– the European Economic and SocialCommittee (EESC), a European Unionconsultative body. It has SErepresentatives in its Group III and they

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participation in the European Union'sbudgetary policy has been achieved throughthe framework of employment and socialcohesion policies, specifically thepluriannual budgets to promote SMEs andemployment such as the ADAP initiative,the EQUAL initiative for social and work integration, the European Social Fund(ESF) and the Tird System and

Employment pilot action.

Tese programmes have had a wide-ranging structuring effect, both nationallyand internationally, in coordinating andstructuring the European SE in terms of federations, networks, research, culture andpolicies. Te EQUAL programme isparticularly important. It supports projectsthat involve participation by SEorganisations with themes such as"Strengthening the social economy (the

third sector), especially the services of interest to the community, with a focus onimproving the quality of jobs". Tey alsoinclude lectures and debates, which are keyfactors for spreading the concept. It ishaving a decisive impact in countries suchas Poland, Ireland and Austria.

Te timid advances in recognition and inthe deployment of policies at EuropeanCommunity level contrast with the

difficulties that spring from the EU'scompetition policy and, more recently, fromits state aid policy.

with an absence of explicit references in thebasic European Union texts (reaty of Rome and reaty of Maastricht), adefinition (if any) based on legal form ratherthan on the activities being conducted, anda multiplicity of terms (the Tird system,civil society, etc) that hinder consensus onthe designation to be employed.

From the point of view of the legalrecognition and the visibility of the SE, theorganisation of European Conferences, theapproval of EESC Opinions and theinitiatives and opinions of the EuropeanParliament Social Economy Intergroupshould be mentioned, as well as theapproval of the Statute for a European Co-operative Socie ty.

In the policies employed, the objectives towhich the SE is linked are essentially

employment, social services and socialcohesion, so they appear above all in twomajor lines of public policy: social and work integration and social policies and localdevelopment and job creation policies. TeEU institutions' interest in involving the SEin these objectives constitutes afundamental advance, although it doesreveal a narrow view of the SE's potentialand of the properties it could generate in theeconomy and society of Europe.

In the absence of a specific Europeanbudgetary policy for the SE, the SE's

41

sectors such as agriculture, industry,services, retailing, banking and mutualinsurance. In other words, the SE is alsopresenting itself as a necessary institutionfor stable and sustainable economic growth,matching services to needs, increasing thevalue of economic activities serving socialneeds, fairer income and wealthdistribution, correcting labour market

imbalances and deepening economicdemocracy.

Te new SE is taking shape as an emerging sector which is increasingly indispensable if an adequate response to the new challengesof the global economy and society is to beprovided. Tese challenges lie at the root of the increasing interest in the role that thenew SE can play in the welfare society.

The necessary conceptual iden-

tification of the SE

A challenge that the SE needs to addresswithout delay is that of ending itsinstitutional invisibility. his invisibility isexplained not only by the emerging natureof the SE as a new sector in the economicsystem but also by the lack of a conceptualidentification, i.e. a clear, rigorousdefinition of the features that the different

The Social Economy: an emerging

sector in a plural society

Te main and most important trend thatcan be observed in the recent evolution of the Social Economy is its consolidation inEuropean society as a pole of social uti litybetween the capitalist sector and the publicsector, made up of a great plurality of actors:co-operatives, mutual societies, associations,

foundations and other similar companiesand organisations.

Te citizens' associative movement isexperiencing considerable growth throughpromoting solidarity business initiativesdirected towards producing anddistributing merit or social goods. Steadilygreater collaboration between theassociative and co-operative movements isdiscernable in the development of many of

their projects and activities, as in the case of social enterprises. Te capacity of theseinitiatives to solve the new social needs thathave appeared in recent decades hasrevitalised the importance of the SE.

Te SE has not only asserted its ability tomake an effective contribution to solving new social problems, however, it has alsostrengthened its position in traditional

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U N I Tis Report has also shown the increasing

size of the SE, which directly provides over11 million jobs, accounting for 6% of totalEU employment. In contrast, it is invisiblein the national accounts, a hurdle thatconstitutes another major challenge.

Current national accounting rules, drawnup at the height of mixed economy

systems, do not acknowledge the SE as adifferentiated institutional sector, making it difficult to draw up regular, accurate andreliable economic statistics on the agentsof which it is composed. Internationally,the heterogeneous criteria employed indrawing up statistics prevent comparativeanalyses and detract from the authority of approaches which draw attention to theevident contribution that the SE makes toachieving major economic policyobjectives.

Te recent preparation of the EuropeanCommission's Manual for drawing up theSatellite Accounts of Companies in the SocialEconomy is an important step towardsinstitutional recognition of one part of theSE in the national accounts systems. TeManual explains the methodology by whichreliable, harmonised statistics can be drawnup throughout the EU, within the NationalAccounts framework (the 1995 ESA), forfive major groups of SE companies: a) co-operatives, b) mutual societies, c) SEbusiness groups, d) other similar companiesin the SE and e) non-profit institutionsserving SE companies.

Te SE in Europe has to meet a doublechallenge in this field: firstly, theorganisations that represent the SE need tomake their voice heard in the European

types of companies and organisations thatmake up the SE share and the specifictraits that enable them to be distinguishedfrom the rest.

On this point, a gradual process of conceptual identification of the SE has beendiscernible in recent years, drawing in boththe players themselves, through their

representative organisations, and scientificand political bodies. Tis Report presents aconcept of the SE developed from thecriteria set out in the EuropeanCommission's Manual for drawing upSatellite Accounts of Companies in the SocialEconomy, which, in turn, concurs with thedefinitions formulated in the recenteconomics literature and by the SEorganisations themselves.

Legal identification of the SE and

recognition in the national accountsConceptual identification of the SE willmake it possible to tackle the challenge of its identification in the legal systems of theEU and EU member states. Although someEuropean countries and the EU itself recognise the SE as such in a number of legal texts, together with some of itsconstituents, progress needs to be made ona statutory definition of the extent of the SEand the requisites that its components mustfulfil in order to prevent dilution of itsidentifying features and the loss of its socialutility.

A Legal Statute of the SE and effective legalbarriers to entry need to be introduced sothat no non-SE organisation can benefitfrom economies of legal form of organisation or from public policies toencourage the SE.

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powerful the collective image transmittedby the SE, the greater the chances of effective action and development for eachand every one of the groups of agents thatmake up this sector.

The SE and social dialogue

Achieving recognition of the SE as aspecific interlocutor in the social dialogue is

a very considerable challenge.

Te SE has become a major institution of civil society which contributes significantlyto the organisation of its associative fabricand the development of participativedemocracy. At the same time, nonetheless,the SE is a potent economic and social actorwith specific characteristics that escape theclassic scheme of employers/employees anddemand that the SE be expressly recognisedas a social interlocutor.

During the second half of the 20th century,at the height of the mixed economy systems,the major figures at the negotiating tableswhich agreed public policies (particularlyincome policies) were governments,employers' organisations and trades unions.Nowadays, however, the economy hasbecome more plural and this demandsdirect participation in the social dialogue byall the sectors involved: employers'federations, trades unions, governments andthis other great group of social andeconomic players, entrepreneurs andemployers, that comprises the new SE andis playing an increasingly prominent role inthe developed world.

ogether with the classic collectivebargaining tables, social dialogue tables thatinclude the SE agents should be proposed,

Commission and in each of the MemberStates to ensure that the Manual'sproposals are put into effect. Specifically,they need to get each EU member state toset up a Statistical Register of Companies inthe Social Economy, based on thedelimitation criteria laid down in theManual, so that satellite accounts covering the companies in these registers can be

drawn up.

Secondly, they need to promote initiativesthat will make it possible to prepare reliable,harmonised statistics on the large segmentof the SE that is not covered by theEuropean Commission's Manual. Tissegment is largely made up of associationsand foundations, which are covered by theUnited Nations' Handbook on Non-ProfitInstitutions in the System of NationalAccounts. Tis Handbook includes many

non-profit organisations that are not part of the SE, but it would be possible todisaggregate the statistics for non-profitorganisations that meet the SE identitycriteria as defined in this report from thenon-profit sector statistics drawn up inaccordance with the NPI Handbook.

Coordination between SE federations

Being plural and multiform, the SE needsstrong organisations to represent thedifferent groups of companies andorganisations of which it is composed.However, the identity which they all shareand the nucleus of common interests thatagglutinates the SE suggest the necessityand advisability of wholeheartedlyundertaking processes to achieve associativecoordination of the entire SE, both at eachof the national levels and transnationallythroughout Europe. Te more visible and

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markets, which are increasingly globalisedand more and more characterised byintensified competition, decentralisationand delocalisation of production andchanges in the way governments act, with aclear trend towards the progressivederegulation and privatisation of publicservices. ogether with the emergence of

new social problems (ageing population,mass migration, etc.), these changes notonly give rise to growth opportunities forthe SE but also to challenges and threats tosome of its spheres of action.

Te different companies and organisationsthat make up the SE face the challenge of integrating efficient production processesand social welfare objectives in the conductof their affairs. Without delay, the SE actorsmust tackle the development of competitive

strategies in accordance with the newdemands of steadily more competitivemarkets in order to make themselves usefulinstruments for their members' welfare andfor strengthening social cohesion.

Entering into business networks andalliances, creating new ways to financecompanies, innovating in products andprocesses and giving impetus to training and knowledge development policies mustfeature prominently among theircompetitive strategies.

The SE, the new enlarged European

Union and the development of an

integrated Euro-Mediterranean space

Te EU places great importance on theobjective of consolidating an integratedEuropean space where social and economicinequalities between the EU-15 and the 12

as these would be more in accordance withthe new economic scenario at the start of the century.

The SE and public policies

For over two decades, the Europeaninstitutions (Parliament, Commission andEconomic and Social Committee) haverecognised the SE's capacity for correcting

significant social and economic imbalancesand helping to achieve various objectives of general interest. Recently, the EuropeanParliament identified the SE as afundamental pillar and keystone of theEuropean social model (clé de voûte dumodèle social européen).

As a result, even more than before, themember countries and the EuropeanCommission must undertake concretecommitments to make the SE not only an

effective instrument to achieve particularpublic policy objectives in the generalinterest but also, in itself (i.e. cooperativism,mutualism, associationism and generalinterest initiatives by civil society), anobjective in its own right, indispensable forthe consolidation of a developed society andthe values associated with the Europeansocial model. At this point, theorganisations that represent the SE have animportant part to play by presenting initiatives and proposals to the EUinstitutions, political parties, trades unions,universities and other organisations thatrepresent civil society.

The SE and the markets:

competitiveness and social cohesion

Te recent and future evolution of the SEin Europe has been and will be stronglyinfluenced by changes in the environment

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and democratising the economy throughtraining projects that stimulateentrepreneurial initiatives based on thevalues which characterise the SE. In turn,the development of new products andinnovative processes in SE companiesrequire these companies to boost initiativesfor cooperation with the university centresthat generate and transmit knowledge.

Research networks and informationexchange networks between these centresand SE professionals will contribute, as theyhave been doing in recent years, tobroadening the necessary SE-specificknowledge bases and disseminating thisknowledge throughout Europe.

SE identity and values

Te new SE is taking shape in the EuropeanUnion as a pole of social utility in a pluraleconomy system, alongside a public economy

sector and a capitalist economy sector.

Te challenge that the SE must face is tosurmount the dangers of dilution ortrivialisation of its identifying features,which are what give it its specific socialutility. Because of this, the SE actors need todeepen their awareness of the values thatmake up their shared core of reference, useall the social and cultural levers that areattuned to these values to reaffirm theirown institutional profile and achieve aneffect that multiplies their economic andsocial potential.

Te challenges and trends outlined aboveare not a conclusive decalogue but aproposal that is open to debate, a starting point for reflection in the new phase thathas opened up in Europe with the recentexpansions of the European Union.

new member countries in Eastern andSouthern Europe will be diminished andeliminated as soon as possible. Among other consequences, these inequalities havecaused considerable migratory flows fromEast to West within the EU. ogether withstronger social cohesion in the EU, anotherchallenge is to foster an integrated Euro-Mediterranean space that will become an

area of prosperity and stability. For this, allthe countries bordering on theMediterranean need to consolidate strong democratic states and the productive fabricof civil society in the southern rim countriesneeds to be expanded.

In these countries, high population growthand other structural reasons are preventing their economic growth from leading to ahigher standard of living for the majority of the population, which is why the Euro-

Mediterranean region and the EU havebecome one of the geographical areas withthe greatest migratory movements, in termsof both size and intensity. Tese are furthercompounded by large population groupsfrom Latin America, Sub-Saharan Africaand South-East Asian countries.

Owing to their specific characteristics, theSE actors can play a major role both inintegrating the immigrant population andin developing trade flows within the EUand between Europe and the southernshores of the Mediterranean.

The educational system, research

and exchange networks, the

university and the SE

Te European Union's education systemsare destined to perform an importantfunction in fostering entrepreneurial culture

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In this new phase and new social economy, allthe prominence and all the responsibility fordefining its specific profiles and the strategic

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