“Towards a Council recommendation on Social Economy” – Philea speaks at Social Economy Intergroup public hearing
On Friday 4 March 2022, the European Parliament’s Social Economy Intergroup (SEIG) held its online public hearing Towards a Council Recommendation on Social Economy: boosting the convergence of social economy enabling frameworks. This online public hearing gathered EU Institutions, MEPs, Member States, and key social economy stakeholders to push forward this proposal of council recommendation that was announced in the EU Social Economy Action Plan (SEAP).
The European Parliament’s SEIG, with more than 80 members, stands ready to actively support a successful implementation of the Social Economy Action Plan and its proposal of a Council Recommendation on developing social economy framework conditions to be adopted in 2023. Philea has been closely collaborating with the SEIG and will continue to do so in light of the SEAP, which is an opportunity for philanthropy as part of the wider social economy.
At the public hearing, speakers exchanged on the opportunities and challenges of a legal framework for the social economy. Notably, they explored ways towards legal certainty and access to financial markets for the sector. The potential of a label or certificate system was discussed, as well as the need for a shared system to assess social impact.
Key tools highlighted were the JURI report backed by MEP Lagodinsky, as well as the upcoming ECON report pushed forward by MEP Canas.
MEP Patrizia Toia opened the hearing referring to the need for dedicated financial tools for the social economy. SEE, and CEPES, President Juan Antonio Pedreno, followed up by pointing towards the existence of a legal framework as the cornerstone of the social economy project. In order to move ahead with this work, he referred to two meetings taking place in Spain in March to celebrate the Spanish social economy legal framework; and on 5 and 6 May 2022, the French Presidency will host an event in Strasbourg to promote and strengthen social economy in Europe.
Luigi Bobba, Terzjus, called for a code for the third sector. The Council recommendation, together with Commission guidelines, will form the necessary groundwork to develop a shared legal definition which takes into account the diversity across EU Member States. He referred also to Professor Fici’s work in comparing legislations across the 27 Member States as well as an upcoming publication by Terzjus titled “Common framework towards the social economy in Europe” which is expected at the end of 2022. Another aim is to simplify the administrative burden for accessing funding at the European level, which could build on a proposal of the European Parliament in 2018 to introduce a certificate for the social economy. To close his intervention, he referred to the urgent need for a shared system of assessment of social impact, which will be able to assess the result of investments.
MEP Sergey Lagodinsky, JURI report rapporteur, referred to the two policy initiatives with which the recently adopted JURI report would support civil society and the wider social economy: (i) minimum standards, (ii) European statute. He noted the need to recognise the importance of European non-profit foundations and applauded Philea’s calls for action in this regard.
State Secretary for Social Economy, Joaquín Pérez Rey, joined previous speakers in stressing the need for legal certainty and access to financial markets. He believes a Directive would be strong progress in the EU to overcome the legal and administrative challenges, and noted that Spain will prioritise the social economy during the Spanish Presidency of the EU, no less by intensifying contact with the SEIG and counting on SEE. He finally referred to the MEP delegation Spain welcomed last week.
French State Secretary, Olivia Grégoire intervened via a pre-recorded video message, noting the discussion that took place in Paris on the label system to define what is understood under the social economy for them as a first step to more convergence.
Santina Bertulessi, Deputy Head of Cabinet of Commissioner Schmit, referred to the role of social economy to channel democratic participation in communities. To ease financing, also from the private side, she noted the development of dedicated products under InvestEU. She echoed previous speakers on social impact and the work on assessing and developing a methodology to identify social impact. For the development of labels, she referred to starting with a study towards common criteria and ideally also mutual recognition. Schmit’s cabinet also wants to address issues related to taxation, public procurement, access to finance and investment. She noted the cooperation with the OECD and their work on assessing existing legal frameworks and policy tools for social economy. She closed her intervention by noting that the Social Economy Action Plan includes measures for associations and foundations and awaits the Canas report, besides welcoming the Lagodinsky report.
Professor Antonio Fici focused his intervention on the definition of social economy. “Social economy” is organisations targeted by the Social Economy Action Plan. He raised a few questions such as: are all associations/foundations considered social economy? What is the relationship between social economy entities and social economy enterprises? European legal status or label/certificate of a European social economy organisation should be based on the use of profits and governance and should be available to entities established in various legal forms. The label should provide a recognised European status, regardless of the legal status the organisation holds nationally. Cross-border legal status could not only allow tailored policies but also ensure equal treatment. He closed by referring to his study which was conducted for the European Parliament last year and another one in 2017.
Susanne Westhausen, President of Cooperatives Europe, noted that the fact that social economy is one of the key drivers of the green and digital transitions is currently lacking in the papers.
Hanna Surmatz, Philea, opened by noting that foundations come in as actors in their own right, but also as supporters for other social economy actors. Foundations and donors however continue to face barriers in the single market, hence she called for a “Single market for philanthropy”. The Council recommendation should include a strong recognition of social economy actors. She notes that there should be a better implementation of the non-discrimination principle, which would ease tax effective giving but also enable asset allocation across borders. The free flow of capital should apply to philanthropic organisations and philanthropic donors and guidance to Member States should be issued to implement non-discrimination principle. This could take the form of a code of conduct as a soft law instrument or policy around mutual recognition. Finally, also new tools of working, such as impact investing and mission-related investments could be further enabled.
Mathieu de Poorter, President of CEDAG, stressed that a common definition needs to take into account the diversity of the social economy. He noted that labels and certification should not segment, but encourage and orient the social economy, and minimum standards should be complemented by statutory recognition.
MEP Jordi Canas closed the public hearing by referring to the importance of normative frameworks and implementation of the measures. Indeed, a common definition of the social economy should be part of the normative framework and should give access to the programmes and the funds. Monitoring instruments with clear objectives should be put in place at European level. A single follow-up point, a clear reference person, clear calendar with clear goals. Local teams that follow up very closely. He positioned the Social Economy Action Plan and his report on this matter as a new beginning to attain the main goals of the social economy: a Europe more just and prosperous for all citizens.