Over 30 years ago, the EU established its Single Market. The system was developed on 4 fundamental freedoms: the free movement of people, goods, services and capital. The Single Market has become one of the core achievements of the European Union, enabling Europeans to easily trade, work, and live together.

Industrial and service cooperatives, like other European enterprises, are at the heart of the Single Market’s success. More than others, they have fostered sustainable and need-based productions and services that generated EU wide success, while keeping deep local roots.

In his report, Enrico Letta calls for a renewal of the Single Market through reforms of existing legislative frameworks and expansion to new sectors. While still consolidating the four initial freedoms, the report calls for the Single Market to expand its reach to a fifth freedom; to enhance research, innovation and education.

© European Union 2024 - Source : EP

Research, innovation and education are crucial elements for cooperatives development and outreach. Cooperatives play a singular role in fostering technological and social innovations across the EU in their own way: for the benefit of all. Workers and communities are finding a solid base in the cooperative business model from which to developed new answers to their economic, social or labour needs. Clustering and cooperation among cooperatives are quite common practice as demonstrated by longstanding cooperative groups, networks and consortia. But still cooperatives, especially the small and medium ones, need support for better access to wider innovation eco-systems. While research, innovation and education can reinforce the competitiveness of European enterprises, they could also successfully contribute to social change through building a thriving local economy. Clusters of social and ecologic innovation (CSEI), could be an interesting mechanism to be explored and supported by regional, national and European policies. Those clusters “group mainly social economy entities with mainstream enterprises, civil society organisations, public authorities, education and research institutions that cooperate in a particular location to improve local economic, ecological and societal prosperity and regeneration by facilitating cooperation, pooling of resources and enhancing innovation capacity.”[1] In addition to societal innovation, CSEI can also contribute towards economic, governance, and ecological innovation, and thus “provide prosperity in territories in numerous sectors, help build resilient local value chains and serve a broad range of stakeholders.”[2] Thus CSEI hold a great potential of helping the EU on the path of social, green and technological transition.

Enrico Letta’s report rightfully highlights the need to continue investing in training for the Single Market to rise up to the challenges it faces. Cooperatives play an important role in the development of skills since in-work education and training is one of the cooperative principles upon which cooperative enterprises are founded. But again, for both green and digital transition to be achieved, especially for small and medium cooperatives, and those located in rural or remote areas, support for upskilling and re-skilling of the European workforce is essential.

The reformed Single Market envisioned in the report does not only protect fundamental freedoms, but also aims at establishing a “dynamic and effective European Policy” and calls on the EU to not give up its role of manufacturing leader to others. To achieve this, according to the report, the EU must mobilise all its resources and energy to this goal – starting with private capital, and also expanding to public investment. Concerning the latter, he calls for a stricter enforcement of State aid at national level, that would allow an expansion of EU-level funding support. According to us, the EU-level funding support cannot come at the cost of discriminating industrial actors based on their business model. These EU level funding supports should include and adapt to all forms of enterprises, such as cooperatives. Unlocking EU leveraging effects for national cooperative financial instruments would be one of the concrete and rapid steps towards the scale-up of industrial capacities of cooperatives. Providing favourable ecosystem for workers buyouts could be another concrete step to preserve European manufacturing leadership. The common conditionality discussed in the report should take into account the ownership nature as well as social and democratic dimensions, and recognize the particularities of the cooperative model to meet these conditions.

Enrico Letta's report underlines, services of general interest (SGIs) are instrumental to the European social model. Several principles of the European Pillar of Social Rights are dedicated to SGIs. However, gaps remain in service provision in the EU, which interferes with many citizens' access to the Single Market. In order to tackle this, the report calls for an Action Plan for high-quality SGIs in Europe. Furthermore, it points out the role of social economy enterprises in engendering proximity and sustainable development.

Cooperatives are important providers of SGI, including social and (health) care services, transport, culture, energy provision etc. They also play a significant role in providing those services to the most vulnerable groups and work integration to those who are the furthest of the labour market. Many of those services are facing huge challenges related to the ageing of the population, twin transitions, or underinvestment. It is also important to note that many of the services provided by cooperatives are local, therefore they do not interfere with competition in the internal market. At the same time, it is vital to support their crucial contribution via State aid. Enrico Letta’s report discusses the question of State aid and the General Block Exemption Regulation (GBER) in particular. It calls for the streamlining of State aid processes which would lead to better access to support for SMEs. In terms of the GBER, we particularly welcome the report advocating for expanding its use specifically for the social economy, thus enhancing social economy enterprises' access to finance.

The report also highlights the need for better leveraging public procurement practices, increasing their transparency, competitiveness as well as sustainability, with the aim to ensure that public spending is aligned with the EU strategic goals. In particular, the public procurement market should become instrumental in the promotion of social values, in line with the green and digital transitions. The report underlines the recent reduction of competition for public contracts and calls for the simplification of processes and ensuring better SME participation.

Enrico Letta’s report notes that currently, the majority of contracts are awarded based on price alone, however, this approach must be reviewed in order to unlock the full potential of public spending. In particular, the report points out that public procurements are key for the promotion and support of the social economy. Currently, while the Public Procurement Directive suggests the use of social and environmental considerations as award criteria, in reality, the voluntary nature of these criteria leads to them being underused. The systematic use of these criteria, however, would enhance the participation of social economy enterprises, such as cooperatives, which have higher social standards and often are important providers of quality services. CECOP calls the European Commission to review procurement rules in that sense.

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[1] See European Commission, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, Clusters of social and ecological innovation in the European Union, perspectives and experiences – The role of clusters and similar forms of business cooperation in fostering the development of social economy, Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2873/07591

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