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Social Economy – the right tool to improve living standards in the EU neighbourhood

Social Economy – the right tool to improve living standards in the EU neighbourhood

The social economy's primary objective is to generate economic activity at the same time as meeting and addressing the needs of workers, users and consumers, rather than owners and investors. Based on solidarity-inspired criteria, it makes a major contribution to improving the living and working conditions of millions of people.  The social economy in its various business forms - cooperatives, associations, foundations, mutual societies, social economy enterprises (SEEs), etc. - plays an active role, for instance in agricultural production, manufacturing finance and micro-finance, the supply of clean water, housing, the labour market integration of people with disabilities, youth employment and women's rights, etc.  Therefore it could also become a key player in the achievement of the objectives of EU’s policies with an external dimension of European policies, provided it is backed by an appropriate regulatory framework.

In its opinion on The External Dimension of the Social Economy (rapporteur: Miguel Angel Cabra de Luna), the European Economic and Social Committee (EESC) has outlined the prominent role social economy enterprises and organisations could play in Europe's external, security, trade, neighbourhood and sustainability policies  and the regulations needed  to maximise SEEs' impact.

Conditions and areas for a prominent role of the social economy

TRADE

90% of the future global growth will take place outside Europe. The EESC believes that the social economy, should be specifically addressed by future EU Free Trade and Investment Agreements. The EU particularly needs to ensure that non-tariff barriers are scrapped for SEEs in trade agreements.

INVESTMENT

Next to EU security, investment in the resilience of countries and societies to the east and south of Europe is the other focus of the EU Global Strategy on Foreign and Security Policy. The financing of SEEs plays a key role in unleashing SEEs' full potential in the different EU policies. The European Investment Bank (EIB) and the European Fund for Sustainable Development (EFSD) should contribute to establish a financial ecosystem specifically for SEEs.  Furthermore, economic diplomacy should be used to promote cooperation with international financial organisations and the role of the social economy in international forums, including the UN, the OECD, the ILO, the G20 and G7.

"We need to have a special interest in accelerating economic and social development in our very neighbourhood", said Mr Cabra de Luna, "The social economy can make a valuable contribution to promoting living standards around the EU. The European Neighbourhood Instrument (ENI), but also other financial instruments should therefore contribute to the promotion of the social economy."

SUSTAINABLE DEVELOPMENT

Moreover, it is important for the European Commission (EC) to strengthen its leadership role in international cooperation and use it to boost SEEs in order to help achieve the SDGs and support the EU's external agenda. Better coordination between the European External Action Service (EEAS) and the EC is also a precondition for the development of joint cooperation programmes with other international financial organisations such as the World Bank, the OECD, the African and the Asian Development Banks and others. The social economy sector should become an EU business stakeholder and as such be included in all initiatives for access to third markets, in all development cooperation programmes and in the implementation of the Post-2015 Agenda. It is particularly important to include the social economy as one of the non-state actors in the next Cotonou Partnership Agreement and to include lines of funding specifically for SEEs in the Energy Efficiency in Industrial Processes (EEIP) and the European Fund for Sustainable Development (EFSD).

Europe's development policy – as the EC and many European leaders tirelessly emphasise – should focus more and more on economic investment, rather than on charity.   " SEEs integrate economic and social objectives into a common project and make individuals responsible for their own destinies, allowing them to improve their living conditions and be hopeful about the future", said Mr Cabra de Luna. "SEEs can for instance play a significant role in investing in renewable energies in Africa, as planned in the Energy Efficiency in Industrial Processes  initiative. Better management of resources and raw materials and local connections lead to comparative advantages and will create local jobs, especially for young people and women."

In its opinion, the EESC also stresses the importance of the social economy for achieving the sustainability goals, referring to the already very successful cooperation in areas such as social housing, clean water and sanitation, health cooperatives and many more. Finally, SEEs can be extremely useful in creating jobs with rights in countries with a very developed shadow economy.

In this context, the EESC regrets that in the communication on the renewal of the Cotonou Partnership Agreement (CPA), which will affect more than 100 countries in Africa, the social economy is not mentioned among the non-state actors involved. The EESC calls on the Commission to use the 5th Africa-EU Summit in November to promote SEEs in the framework of a Sustainable Business for Africa (SB4A) platform.

More information on the EESC's proposal for the inclusion of the social economy in Europe's external policy agenda and examples of successful SEEs from different countries around the globe are available on our webpage.