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Internal Market, Industry, Entrepreneurship and SMEs

Social economy in the EU


Defining characteristics of cooperatives and why they are important, European Commission initiatives, and supporting information.

Social enterprises

How social enterprises are defined in the EU, support from the start-up and scale-up initiative, and the social business initiative.

Associations and foundations

Main characteristics of associations and foundations, and European Commission actions to improve the business environment.

Mutual societies

How mutual societies work, the two types of mutuals in Europe, and supporting documents.

Affordable housing initiative

The affordable housing initiative will guarantee local social housing projects’ access to necessary technical and innovation capacity as well as project support.

A significant proportion of Europe's economy is intended to make profits for people other than investors or owners. Known as the ‘social economy’, it includes cooperatives, mutual societies, non-profit associations, foundations and social enterprises. They operate a very broad number of commercial activities, provide a wide range of products and services across the European single market and generate millions of jobs. Social enterprises are also the engine for social innovation.

Social economy in the EU

  • What they are - there are 2 million social economy enterprises in Europe, representing 10% of all businesses in the EU. More than 11 million people – about 6% of the EU’s employees – work for social economy enterprises. They have different legal forms and various objectives ranging from agriculture and banking to provision of employment and sheltered workshops.
  • Main objectives - the primary objective of the traditional social economy enterprises is to serve the members and not to obtain a return on investment as the traditional mainstream capital companies do. The members act in accordance with the principle of solidarity and mutuality, and manage their enterprise on the basis of 'one man one vote' principle.
  • Social enterprises - an important and growing group of social economy enterprises are the social enterprises. Their main objective is to have a social, societal or environmental impact for the general interest.
  • Policy - when policy-makers work to improve the business environment in Europe, they need to ensure that the specificities of these enterprises like ethos, working style, corporate governance, specific accounting modes, asset lock, profits retaining, special 'social' objectives are taken into account.

Why social economy enterprises are important

Social economy enterprises are important because of their

  • Membership - up to 160 million people in Europe are members of social economy enterprises (mostly retail, banking and agricultural cooperatives, as well as mutual societies offering services complementary to social security regimes).
  • Objectives - social economy enterprises contribute to the EU’s employment, social cohesion, regional and rural development, environmental protection, consumer protection, agricultural, third countries development, and social security policies.
  • Size - social economy entities are mostly micro, small, and medium-sized enterprises (SMEs).

The external dimension of social and solidarity economy

Challenges and avaialable support

  • Access to finance - social enterprises are struggling to find the right funding opportunities due to the lack of understanding of their functioning and their small size. However, they can benefit from all European programmes such as COSME, or the structural funds such as the regional development fund and the European social fund. The Commission recommended EU countries to prioritise the activities of social enterprises in the national operational programmes for the period 2014 to 2020.
  • Low degree of recognition - the Commission finances projects to review legislation, share good practices, awareness raising events and projects for the collection of statistical data, for cooperatives and mutuals and social enterprises.
  • Varying regulatory environments across EU countries and activity related obstacles for some legal forms of social economy enterprises - the Commission examines how best to respond to these problems in the area of state aid, public procurement or legal statuses to promote the appropriate policies.
  • Lack of entrepreneurial skills - social enterprises managers and starting entrepreneurs are eligible under Commission's exchange programme - Erasmus for young entrepreneurs.

Commission measures

The Commission aims for a level playing field in which social economy enterprises can compete effectively and fairly, without regulatory discrimination and taking into account their particular needs. To promote a highly competitive social market economy, the Commission has addressed the issue in

The Commission submitted the following proposals to the Council of the European Union

  • Proposal for a Council Regulation on the Statute for a European Cooperative Society (1992)
  • Proposal for a Council Regulation on the Statute for a European Mutual (social security and insurance society) (1992)
  • Proposal for a Council Regulation on the Statute for a European Association (1992)
  • Proposal for a Council Regulation on the Statute for a European Foundation (2012).

In 2003, the statute for a European cooperative was adopted. The other 2 proposals of 1992 were withdrawn in 2006 by the Commission due to lack of legislative progress, while the last one on the European foundation was withdrawn by the Commission due to lack of progress within the Council (December 2014).

European social economy regions pilot (ESER)

We launched the European social economy regions pilot (ESER) in February 2018. It aims to raise visibility and awareness about the social economy at the regional and local level. ESER supports regional authorities that organise awareness-raising events. There, we encourage regional social economy stakeholders (regional/local public authorities, SMEs, social enterprises etc.) to build active networks. Between 2018-2020, the ESER initiative generated more than 100 new regional and local partnerships, without any financial support from the European Commission.

The recently launched ESER 2020 attracted many regional and local social economy stakeholders who will organise awareness-raising events during 2020. In addition to previous years, the 2020 edition offered regions and cities that already played an active role in 2018/2019, the opportunity to raise their awareness-raising activities to the next level. The ESER 2.0 component motivated many ESER partners to come up with innovative proposals. This led to partners involving citizens in regional debates about the social economy or joining forces with neighbouring regions and cities, further developing the interregional dimension.
More than 30 regions and cities from EU countries and COSME third countries applied for ESER 2020.

During the European Social Economy Summit in Mannheim (26-27 November), regional and local social economy stakeholders (the ESER partners) have another opportunity to share knowledge and table proposals/recommendations for social economy policies.
See the ESER 2020 official partners.

Supporting information

Events, projects and studies