The EESC welcomes the long-awaited Social Economy Action Plan

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In an opinion adopted at its May plenary session the EESC gave the thumbs up to the European Commission's Social economy action plan, which takes up many of the proposals the EESC has made over more than a decade to harness the potential of the social economy across Europe.

We are thrilled to see this long-awaited plan adopted, but the work is only just beginning," says opinion rapporteur Giuseppe Guerini. "Now is the time to implement this plan with bold and long-term measures. The EESC has many innovative and concrete proposals to make sure that the social economy's potential is fully exploited in as many EU Member States as possible.

In the Commission's broad-ranging plan, the EESC singles out four key areas where it believes the Commission could go one step further, taking stronger measures:

  • Cooperation between public administrations and social economy enterprises.

The EESC stresses that more agile forms of cooperation need to be found for public administration and social economy enterprises working together locally on the provision of services of general interest. A strong legal basis, for instance a clear distinction in the public procurement directive between the pursuit of the general interest and competition-driven activities, would help improve access to public procurement for social economy enterprises.

  • State aid

The EESC believes that it will not be enough to organise workshops and webinars, as the Commission suggests, to help Member States better understand the rules governing State aid and use all the flexibility available to them to help social economy enterprises. Regulatory action, possibly in the form of guidelines, will be needed to clarify access requirements and the amount of support available.

  • Investments and financial instruments.

It is all well and good to launch new financial products to mobilise private funding for social economy enterprises, as envisaged in the action plan; however, the EESC underlines that many social economy enterprises are too small to think in terms of investment. They need support in getting access just to everyday credit. What would help them most would be a system of guaranteed credits and loans, as already in place for SMEs across the European Union, established by Member States with support from the EU.

  • Taxation

The EESC is pleased that the action plan stresses the need for specific tax provisions for the social economy, but says there is a need to accompany Member States in the path towards coordinated fiscal harmonisation, perhaps inspired by good practices in Member States such as tax exemptions on undistributed profits, lower VAT rates, reductions on or exemptions from social insurance costs.

The social economy has been a focus of the EESC's work for over a decade. In addition to writing a dozen reports urging the European Commission to take action to promote the development of the social economy across Europe, the EESC has also been organising the European Day of Social Economy Enterprises as well as co-organising high-level events across Europe, including the recent Social economy, the future of Europe, which took place at the European Parliament in Strasbourg in March 2022.