How to support social economy entities in line with State aid rules: thoughts following the suggestions in Enrico Letta’s report

Background

This opinion stresses the importance of reconciling the need for strong public support for social economy entities with the EU State aid rules. The EESC points out that the objective of social economy entities is not to maximise profits to be distributed to investors, but rather to reinvest these profits in their activities, or to achieve social or general interest objectives.

In the 27 EU Member States, more than 11 million people (6.3% of the working population) are employed by social economy entities. Of the four million social economy entities in the EU, 246 000 are structured as enterprises and provide assistance and solutions to key challenges facing Europeans. They cover a wide range of sectors, such as social and health services, the circular economy, combating poverty, social housing, combating food waste and the participatory production of energy from renewable sources.

Overall, public authorities do not fully use the tools at their disposal to facilitate social enterprises’ access to public procurement. Therefore, long-term investment capital is not always readily available to social economy entities. Member States are also not making full use of the potential offered by the General Block Exemption Regulation, which provides scope for granting State aid that is compatible with the internal market. In addition, the legal framework for aid for services of general economic interest (SGEIs) is not being properly used by public authorities. 

Key points:

In its opinion, the EESC:

• stresses the importance of reconciling the need for strong public support for social economy entities – which often perform functions and roles formerly performed by the State – with the EU rules on State aid, and welcomes the proposal made in the Letta report on the single market regarding the need to adapt the current legal framework on State aid in order to facilitate better access to credit and funding for social economy entities;
• believes that the rules for granting aid for the recruitment of disadvantaged workers or workers with disabilities set out in Section 6 of the General Block Exemption Regulation should be strengthened and simplified. As suggested in the Letta Report, and in the communication on criteria for the analysis of the compatibility of State aid for the employment of disadvantaged and disabled workers subject to individual notification, these rules should be updated to reflect the current economic situation;
• notes that the legal framework for aid for services of general economic interest (SGEIs) is not being properly harnessed by public authorities, which often fail to give sufficient attention to the high degree of discretion that is conferred on them by the Treaties with regard to the power to classify certain activities as SGEIs.

The text of the draft opinion can be found here.

Additional information

Section: Single Market, Production and Consumption

Opinion number: INT/1071

Opinion type: own-initiative opinion

Rapporteur: Giuseppe Guerini

Reference: Rule 52(2) of the Rules of Procedure

Date of adoption by section: 12/12/2024

Result of the vote: 85 in favour/0 against/0 abstentions                                                   

Date of adoption in plenary: 22/1/2025 – 23/1/2025

Result of the vote:   in favour/against/abstentions

Contacts:

Press officers: Leonardo Pavan/Laura Lui          

Tel.: 00 32 2 546 9189

Email:  leonardo.pavan@eesc.europa.eu/laurairena.lui@eesc.europa.eu

Administrator: Annalisa Tessarolo

Tel.: +32 2 546 9732

Email: Annalisa.Tessarolo@eesc.europa.eu