Brussels unveils ‘once in a decade’ Social Economy Action Plan to rave reviews

A long-awaited package to promote the social economy across the European Union was unveiled yesterday – with onlookers hailing it as “radical” and “passionate”.

The EU’s Social Economy Action Plan sets out a raft of proposals for 2022-2030, and is its first major policy in this field since the Social Business Initiative of 2011. 

It aims to support the estimated 2.8m entities in Europe considered part of the “social economy” – social enterprises, cooperatives, mutual benefit societies, associations (including charities) and foundations – which together employ 13.6m people. 

The plan covers three broad areas: 

• Improving the business environment (including legal forms, taxation policy, labels or certification systems, public procurement and State aid)
• Helping organisations to start up and scale up (including providing access to funding and information)
• Boosting awareness and recognition (including communication, collecting data, training public officials)

The Commission does not specify a budget for the new measures, stating only that its “ambition is to increase the level of support for the 2021-2027 period”. In 2014-2020, an estimated €2.5bn was mobilised from the EU budget specifically to support the social economy.

Engine of innovation

At a press conference yesterday European Commission executive vice-president Valdis Dombrovskis described social economy organisations as “the engine of social innovation and inclusivity”. But, he said, they were not fulfilling their economic and social potential.

The social economy concept has “little or no recognition” in at least 10 EU countries - Social Economy Action Plan 

Commissioner for jobs and social rights Nicolas Schmit (pictured above) said such organisations often faced difficulty because they were “not sufficiently understood and recognised”. The social economy concept has “little or no recognition” in at least 10 EU countries, according to the action plan.

Victor Meseguer, director of Social Economy Europe – which was created in 2000 to enable permanant dialogue between the social economy and EU institutions, and has been calling for a European plan since 2014 – told Pioneers Post that a big-name press conference was unusual for the sector. 

He also praised the “passion and professionalism” of those who had drawn up the plan, adding: “We feel that the teams in charge of social economy at the Commission are in love with the social economy concept and with its potential.”

The Commission will propose a Council recommendation on developing social economy framework conditions in 2023 – a highlight of the plan, said Meseguer. (Recommendations are not legally binding, but carry political weight and often set precedents.) If approved by member states, this would help national policymakers to adapt policy and legal frameworks to the needs of social economy organisations. The plan also raises the delicate issue of State aid – “the holy grail in Europe”, as Meseguer put it.

I wish that national governments were as understanding of and committed to the social economy as the Commission is

John Kearns, a board member of network body Social Enterprise Republic of Ireland (SERI) and a member of the EC’s Expert Group on Social Entrepreneurship (GECES), told Pioneers Post the new plan was “radical”, because it was “getting to the root of social enterprise”.

“I wish that national governments were as understanding of and committed to the social economy as the EU Commission is,” he said. “They get it, they understand it, they’re at the cutting edge of it and they want to encourage it in every way possible.”

Understanding of the social economy was “really poor” in many countries, said Kearns, so support from Brussels on policy and legal frameworks could be a “huge development”.

Opening doors

Suzanne Wisse-Huiskes, CEO of Euclid Network – whose 42 member organisations support social entrepreneurs and impact-driven leaders – described the plan as “a once in a decade moment and a huge development for our sector”.

Euclid Network will publish a detailed statement ahead of the plan's official launch next week. Wisse-Huiske said her initial observations of the plan were that – in a field typically divided and scattered, with many types of organisations and competing definitions – the action plan appeared to have created alignment on what was needed for all of them. It also called not just on national governments but also on other funders and private companies to do more to support the social economy, she pointed out. “I feel like it’s more co-creation than ever,” she said. 

This is a once in a decade moment and a huge development for our sector

Kearns said it was “exciting” to see that the new action plan sat within a “strategic suite of actions” by the Commission. For example, the social economy is also now explicitly recognised within the EU’s 14 “industrial ecosystems” to support the transition to a green and digital economy. 

Though this had not yet attracted much attention, it was “really important”, said Kearns, when it came to how funding would be allocated. 

“That allows us to sit at the table with equal status with any of the other ecosystems – whether it be farming or fisheries or IT... we’re now recognised. And that automatically opens doors for us and includes us in all economic planning and actions.”

A launch event for the new EU action plan for the social economy will take place in Brussels and online on 16 December 2021. Check back soon for more coverage on Pioneers Post.

Header image: Nicolas Schmit, European Commissioner for Jobs and Social Rights, giving a press conference on 9 December 2021 on improving the working conditions in platform work and on the Action Plan for the Social Economy (credit: Christophe Licoppe / European Union, 2021)

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