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"Boosting Social Enterprises in Europe" conference – According to Nicolas Schmit, capital "should be used as an instrument, not for maximum profit but for employment and in the interests of society"

03-12-2015

On 3 December 2015, the Minister for Labour, Employment and the Social and Solidarity Economy, Nicolas Schmit, opened the "Boosting Social Enterprises in Europe" conference in Luxembourg, which was organised as part of the Luxembourg Presidency of the Council of the EU.

The two-day conference revolves around the following issues: how to create social innovation, how to systematically integrate social innovation when setting up economic activities, what ecosystem there is to promote access to funding for the social and solidarity economy, and how to mobilise individual savings for social and solidarity economy projects.

Nicolas Schmit at the conference "Boosting Social Enterprises in Europe" in Luxembourg on 3 December 2015
© Alex Anyfandakis
In his opening speech, Nicolas Schmit stressed the "increasingly important role" that the social and solidarity economy plays "in Europe and in a growing number of countries around the world". According to him, it brings together "women and men guided by the idea of solidarity, often out of simple necessity, but always due to the profound belief that humans must be at the centre of all economic activity."

The Minister believes that "we are emerging with difficulty from a financial, economic, social and ecological crisis caused precisely by the fact that these values have been ignored, ridden roughshod over". He noted "the harmful consequences": close to 23 million unemployed in Europe, poverty that has not receded but has increased significantly, growing social inequality, youth unemployment that in certain countries has resulted in "a lost generation", and child poverty which will "impact their future". He believes that "Europe has been synonymous with economic and social progress for a long period of time. Today we are witnessing widening economic and social divergence, both within countries and between them. We have forgotten that social cohesion is the most valuable public asset, a driver for a competitive and innovative economy."

For him, "it is therefore high time to reflect on other models of development, other ways of doing things, of making capital an instrument not just for maximum profitability, but for employment and in the interests of society".

This is why the Luxembourg Presidency has made promoting the social and solidarity economy one of its main priorities. This "is a well-established reality in Europe and elsewhere", he noted, before giving a few statistics: 14 million jobs in the EU, hundreds of thousands of social enterprises, cooperatives and associations pursing a plethora of activities, but also, he stressed, "linked by common principles, and sharing the same conviction that the economy and society are not mutually exclusive and that the social or environmental impact is worth all the stock prices on the exchange".

Nicolas Schmit thanked those who supported the Presidency in its efforts, including the European Parliament and its "Social Economy" Intergroup, the European Economic and Social Committee, "which produced, at our request, an opinion on the subject of "Building a financial ecosystem to promote social enterprises", the European Commission, and the OECD, "whose Report on Social Impact Investment enriched our discussion and opened up new perspectives". He also thanked the Luxembourg Union of Social Enterprises (ULESS), which helped prepare the conference and draw up new Luxembourg legislation which the Minister hopes can be adopted in 2016.

For Nicolas Schmit, the conference should give visibility to the social and solidarity economy, to "coming up with new ideas, concepts and innovative approaches to 'boost social enterprise'". He believes that "there has never been a better time, since our societies and economies are going through a process of profound change: social, demographic, technological, and environmental, providing fresh challenges that can be turned into real opportunities." According to him, the social and solidarity economy can be "at the forefront of social innovation and short-term innovation".

The Welfare State must also be reconsidered, "not to dismantle it, certainly, but to modernise it so that it can benefit from innovative approaches resulting from the social and solidarity economy". The Minister called for reflection on the way to reinsert vulnerable people such as the long-term unemployed, the NEETS (Not in Employment, Education or Training) and the handicapped; to employ them, train them, educate them and re-educate them, as well as how to integrate refugees into the societies and economies of the EU.

The social and solidarity economy can provide solutions, the Minister stated, but only under the condition that it benefits from a framework which allows it to be developed: "a framework that is local, national, that should be European and that should no longer neglect the international component of this development."

This framework has a human dimension which "remains indispensable and crucial", but it should "also and above all provide a financial ecosystem which will allow it to move forward and thrive." A large part of the conference will therefore be devoted to financing the social and solidarity economy. "The opinion of the European Economic and Social Committee provides us with several areas for discussion, which are as varied as they are interesting", said the Minister.

On the one hand, there is "public financing which remains essential", and which he believes are vital catalysts for technological innovation and progress. This is evidenced by the fact that the social and solidarity economy is included in the Commission's investment plan "as a sector able to benefit from these funds". On the other hand, there is the development of solidarity finance. Other means are possible, given the abundance of liquidity available on a European and international scale that would need "to be targeted towards investments, including in the social and solidarity economy", without distorting it.

Nicolas Schmit concluded by placing the debate within a wider context: "The world today is more torn apart than ever, the threats are considerable – we learnt that again a little more than two weeks ago in Paris. We need to rebuild social cohesion, tangible forms of solidarity at home but also with our southern partners in the Maghreb, and in Africa in particular. The development of the social and solidarity economy is a driver for this. We can make this engine more powerful and without additional pollution, today and tomorrow."

MEP Jens Nilsson, Co-Chair of the "Social Economy" Intergroup, praised the efforts of the Luxembourg Presidency with regard to the social economy, which has achieved a broad political consensus in the European Parliament, he stressed. "It is a reliable sector which creates stability", he explained, specifying that it reinvests its profits. The quality of its products and services are equivalent to those in the private sector, and the prices are almost identical. But whereas the private sector does "as little as possible" to achieve this outcome, the social sector does "its utmost" to do so, the Swedish MEP stated, particularly regarding services for people. The Intergroup, together with the IMCO (Internal Market and Consumer Protection) parliamentary committee, raised the question of the doors that European public procurement legislation can open for social enterprises, as well as the potential of the banking union for the sector, in particular regarding long-term loan guarantees. In this context, the practices of EU Member States can also lead the way.

Georges Dassis, President of the European Economic and Social Committee (EESC), first mentioned the slow decline over thirty years of Christian, mutual and cooperative organisations and other charitable organisations. But with the crisis, social enterprises have proven to be "extremely adaptable" in meeting a number of new challenges.

Meanwhile, the EESC invested a lot of energy on the issue, among others, after having been consulted by the Luxembourg Presidency. As a result, Georges Dassis believes that the EESC has become "the leader when it comes to putting the issue of the social and solidarity economy on the European agenda". According to him, the EU is caught in a "crisis of confidence", citizens seeing that governments, instead of showing solidarity, are taking decisions where "everyone becomes inward looking" and where the economy focuses on productivity without caring about human beings. Without the "grand" EU project, Georges Dassis believes that xenophobes and racists will prevail and that "people will be set against one another". In such a situation, the solidarity economy, which is not based on the idea of profit, has, according to him, an important role to play. The EU would therefore be well-advised to support it, as it is an issue close to citizens. It binds together the social fabric in Europe and does not seek to make "disproportionate profits".

  • Updated 04-12-2015