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Why we must defend the social economy model in the EU: a social rights perspective from Social Platform

By Sanna Honkaniemi and Ana Luiza Hannotte
from Social Platform, European Platform of Social Action NGOs

In the midst of current debates of the new European Commission’s agenda priorities, including the midterm of the Social Economy Action Plan (SEAP), the future of the social economy in Europe is at stake. At Social Platform, we work towards ensuring that social economy actors, including cooperatives, work integration social enterprises (WISEs) and not-for-profit social service providers, are recognised and empowered in the EU.

Social Platform is the largest, leading non-governmental organisation working on social issues in Europe. We unite over 40 European-wide networks that advocate for the rights of underrepresented people, counting not-for-profit social services and social economy actors among our members. As a signatory of the La Hulpe Declaration, we fully support the agreement made among policy makers, civil society and social partners to enhance social rights and welfare across Europe within the 2030 agenda.

We advocate for the social economy to be further recognised and supported as a model for sustainable development, as it is rooted in democratic governance, solidarity and community empowerment. In our recent Open letter to Ursula von der Leyen, we reinforce this message by requesting social economy actors’ direct involvement to shaping policies through civil dialogue in the coming years, as they already lead by example through quality services, provision of meaningful employment, and innovative solutions to social and environmental challenges. Their potential should be recognised as central to the EU’s social fabric, besides their contributions to competitiveness and sustainability strategies.

Increased mainstreaming of the social economy model in the EU was recently achieved thanks to the Social Economy Action Plan (SEAP) implementation. Among many SEAP initiatives, the Council Recommendations on developing social economy framework conditions[1] were welcomed as a key milestone to orient Members States in addressing critical points: legal frameworks, fair taxation, increasing access to public procurement and extending eligibility to state aid rules, in line with the General Block Exemption Regulation. Still, the development of framework conditions to social economy remains very unequal from one Member State to another. Besides bottlenecks to recognition, access to funding remains as a challenge for social economy actors, which puts the implementation of national roll-out plans to develop social economy ecosystems at risk[2]. The same applies to the direct involvement and contribution of the social economy sector across other areas.

Besides the SEAP, many broader EU initiatives, from the Green Deal to the Care Strategy, Anti-Poverty Strategy, New European Bauhaus, and Recovery and Resilience Facility, often fail to fully account for the social economy’s cross-cutting potential. Too often, these policies are underfunded, siloed and not developed in a holistic manner. To respond to such challenges, we defend a standalone ESF+ as the key funding mechanism that supports socially and environmentally sustainable initiatives. Besides, we also highlight the social economy as a key area for the implementation of the upcoming action plan on the Pillar of Social Rights, to ensure fair working conditions via the future Quality Jobs Roadmap, support poverty eradication through the EU Anti-Poverty Strategy and support a comprehensive fair & just transition.

Central to the vision of Social Platform is the belief that the social economy is key to delivering a just transition. Social enterprises (including WISEs), cooperatives, and not-for-profit social service providers already create decent work in key transition sectors such as renewable energy, sustainable agriculture, the circular economy, and social care. These organisations prioritise people and the planet over profit, reinvesting resources into local communities and reinforcing resilience in regions. To further support their activities, Social Platform and its members also look forward to the revision of the 2014 EU Directive on Public Procurement, with views to embedding social and environmental considerations and reserved contracts to social economy actors applying to public procurement calls in multiple levels (local, regional, national).

As industries are compelled to face changes in the green transition, the social economy’s emphasis on long-term social value can help prevent deepening inequalities and therefore, presents a key model that can help to achieve a fair and just transition that public and private actors alone may struggle to provide. Integrating the social economy into EU policies and funding mechanisms can help ensure that the just transition is not only environmentally effective but also socially just, empowering communities to actively shape their future.

Despite current EU agenda priorities oriented to competitiveness and decarbonisation, a resilient European Union must realise that it can only be competitive, if it is fair and future-proofed. A narrow interpretation of competitiveness compromises programmes for social investment and the support of civil society through budget reductions and funding mergers framed as ‘simplification’, while decarbonisation limits the scope of the social-environmental dimension and reduces the openness to social economy actors.

As Social Platform, we will continue to use our collective voice to champion the investment in long-term social value and count on the capacity of a model that truly puts people before profit. As first stated in the Draghi Report, ‘productivity growth and social inclusion go hand-in-hand’ [3].

[1] See: Council Recommendation of 27 November 2023 on developing social economy framework conditions

[2] Developing national roll-out plans constitute one key recommendation to Member States: ‘It is recommended that Member States develop policy and regulatory frameworks that enable and support the social economy. To this end, they are encouraged to design and roll out comprehensive strategies that recognise and stimulate the social economy, or adapt existing strategies or other policy initiatives, in line with this Recommendation, the Union action plan for the social economy and other Union policy guidance.

[3] Mario Draghi, The Future of European Competitiveness, 2024

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