Social economy: Council recommends member states tap its full potential

Today, EU ministers reached a political agreement on a recommendation on developing framework conditions for the social economy, with a view to promoting social inclusion and access to the labour market.

Social economy entities can take various forms, such as cooperatives, associations and foundations; their main shared principle is that they prioritise people, as well as social or environmental purposes, over profit. The social economy contributes to labour market and social inclusion, it fosters skills development and also stimulates fair and sustainable socioeconomic and industrial development, improving social and territorial cohesion across the member states. In order to strengthen the social economy, an enabling framework is crucial.

"Social economy entities tackle some of the biggest challenges facing our society, notably on labour and social integration and social cohesion. And yet there is so much we can do to support the further development of the social economy, in our member states and across the EU. We need to tap into the enormous potential that the social economy has, in order to improve our responses to the social and environmental challenges we all face and ensure no one is left behind."

Yolanda Díaz Perez, Spain’s acting Minister for Work and Social Economy

Access to the labour market and social inclusion: the added value of the social economy

In the Council's first-ever recommendation on the social economy, member states are recommended to take measures in order to acknowledge and support the role of the social economy in:

• easing access to the labour market, especially for vulnerable or underrepresented groups
• fostering social inclusion, by providing accessible and high-quality social and care services
• stimulating skills development, including skills needed for the digital and green transitions
• promoting social innovation and sustainable economic development

A supportive financial environment for social economy entities

Social economy entities aim to achieve social and environmental goals rather than just profit; therefore, accessing financing is usually harder for them than for other enterprises. Member states are encouraged to facilitate their access to public and private funding, including by making the best use of EU funds.

According to the recommendation, improved access to markets and public procurement, efficient use of state aid rules and an enabling taxation framework are equally crucial for the development of the social economy.

Background

The social economy accounts for 13.6 million jobs in Europe, providing for inclusive and quality jobs, promoting social and territorial cohesion, driving social innovation and advancing the twin green and digital transitions. These measures support the principles of the European Pillar of Social Rights and the related targets for employment, skills and poverty reduction.

With political agreement having been reached today, the recommendation will now be formally adopted in a forthcoming Council meeting. Once the proposal has been adopted, member states will have two years to adopt or update their national strategies on the social economy.