The European Commission Published its proposal for a Council recommendation on developing social economy framework conditions. This proposal is part of the implementation of the Social Economy Action Plan (SEAP) that was published in December 2021.
CECOP welcomes the ambitious proposal as it fulfils a series of asks previously voiced by CECOP during the call for evidence, including calling for Member States to:
- establish enabling framework, tax exemption schemes, and easier access to financing solutions for worker buy-outs under the worker cooperative form. Cooperatives created by worker buy-outs contribute to preserving sectors, skills and know-how that otherwise would be lost or delocalise. Reducing the barriers that prevent them is particularly timely given the current crises that are affecting the Union’s industry;
- recognize and support social economy entities’ contribution to quality employment, including for disadvantaged groups. Although we regret that the text does not mention the rise of the non-standard employment across the EU and does not encourage Member States to promote cooperatives as solutions for non-standard workers while their added value has already been demonstrated in term of better working conditions, wages and access to social protection;
- involve social economy actors also in the design and not only the delivery of social services, such as care, or other services of general interest. Cooperatives provide a community-based approach and have the ability to represent the community needs or help public authorities to anticipate unmet needs;
- encourage the uptake of socially responsible and innovative solutions in public procurement. The “cheapest criteria” is still the main rule in many countries, and this puts a negative pressure on cooperatives and jeopardize salaries, working conditions and the quality of the service provided;
- increase the access for de minimis state aid funding for social enterprises providing services of general economic interest;
- recognize digital platform cooperatives as a model for territorial development and social innovation, but regret their contribution to ensure better working conditions and social protection was not recognised;
- foster the inclusion of social economy skills in education and training at all levels of education, and creating national competence centres for training on the social economy;
- encourage more public-private partnerships with social economy entities as mean of providing funding;
However, the proposal lacks measures in some crucial areas such as the recognition of worker ownership as an independent industrial relationship. We regret that worker cooperatives are reduced as resulting from worker buy-outs, while worker cooperatives have much more to provide in term of securing quality working conditions and bringing democracy at the workplace. This is even more regrettable given that the EU is going through major challenges such as the rise of non-standard employment and the insecurity, weak social protection, and workers representation it encompasses. We do believe that worker cooperatives provide an important solution for such workers to mutualise risks, costs and benefits as proven by the increase of cooperatives among freelancers, self-employed, platform workers. We regret that the Commission is not encouraging Member States to support the establishment of such cooperatives to tackle the negative consequences of the non-standard work.
Moreover, the proposal fails to address all sectors in which social economy are active, such as the industrial sector. If we look beyond the important economic contribution industrial cooperatives have in our economies, they also play a key role in preserving traditional sectors and preventing them from delocalisation, while at the same time contribute to their modernisation and green transition.
Concerning social impact measurement, the proposal should recognise existing tools created by social economy actors, such as the cooperative audit, and recommend Member States to build upon them rather than creating new and ill-adapted measurements. Finally, while we welcome the recommendations to Members State to establish positive tax incentives, we regret lack of mention of favourable VAT systems for social economy enterprises.
Additionally, we regret that worker cooperatives are reduced as resulting from worker buy-outs, while worker ownership has much more to provide in term of securing quality working conditions. This is even more regrettable given that the EU is going through major challenges such as the rise of non-standard employment and the insecurity, weak social protection, and workers representation it encompasses. We do believe that worker cooperatives provide an important solution for such workers to mutualise risks, costs and benefits as proven by the increase of cooperatives among freelancers, self-employed, platform workers. We regret that the Commission is not encouraging Member States to support the establishment of such cooperatives to tackle the negative consequences of the non-standard work.
We call on the Member States to adopt the inter-sectorial approach and to make sure that cooperatives active in industry and services (including worker cooperatives, social cooperatives, and cooperatives among self-employed), will be included and will benefit from the supporting environment that will result from the implementation of the Recommendation. We also call the Member States to put in place a “coop test” allowing to screen any policy that could have a harmful effect on cooperatives and identify discriminatory measures.
Cooperatives in industry and services can without a doubt contribute to a fairer ecological, economic and social transformation, but they need the right conditions and be supported by strong political commitment from EU institutions and Member States to realize their potential.