The action plan for the social economy, submitted for parliamentary examination in the Chamber of Deputies
The document issued by the European Commission aims at consolidating social innovation, at supporting the growth of the social economy and to stimulate its power to socially and economically transform communities. The plan also includes measures on improving the access to financing of entities from the social economy sector and for creating new products through the InvestEU programme. The deadline for parliamentary examination is March 15th.
The action plan for the social economy under parliamentary scrutiny in the Chamber of Deputies of the Romanian Parliament is an official document from the European Commission and includes measures aimed at strengthening the social economy sector. The plan was developed through an open and inclusive process and covers the period 2021-2030.
“Every day, approximately 2,8 million entities from the social economy sector from Europe offer concrete and innovative solutions to the main challenges we are confronted with.”, as included in the introduction to the Action Plan.
The document has six parts:
1. Introduction;
2. Definition of the social economy;
3. Creating a proper framework for the social economy to prosper;
4. Creating growth opportunities for entities in the field of social economy;
5. Improving the level of recognition of the social economy and of its potential;
6. The path to follow.
The fourth chapter includes concrete proposals on increasing access to financing for socio-economic operators. "It is estimated that at least EUR 2.5 billion has been mobilized from the EU budget to support the social economy in the 2014-2020 programming period. Overall, the Commission's ambition is to increase support for 2021-2027. It is expected that more investments will be mobilized due to a higher expected multiplier effect of InvestEU and increased support for social impact and innovation ", the document states.
With the goal of improving the access to financing, the Commission will:
- Launch new financial products in 2022 under the InvestEU programme aimed at mobilising private financing targeted at the needs of social enterprises at different stages of development.
- This will include guarantees to enable access to credit for social enterprises and microenterprises, equity and quasi-equity investments in social enterprises and impact-driven enterprises, as well as capital investments in financial intermediaries.
- Other than the financial products presented in the action, the Commission will periodically assess market gaps and will develop market testing, where necessary, and, if they prove conclusive, innovative financial pilot – products;
- In cooperation with the InvestEU implementing partners, ensure that InvestEU financial intermediaries providing finance to social enterprises are easy to identify by potential beneficiaries, including through the InvestEU Portal and the Social Economy Gateway.
- Complement financial instruments with grant support for building social enterprise finance markets in Europe by supporting the setting up of new financial instruments and investment readiness programmes.
- Complement equity investment instruments with grant support aimed at lowering transaction costs for risk-capital investments into social enterprises.
- Support EU networks active in the areas of microfinance and social enterprise finance with the aim of improving awareness and signposting to EU funding, improving the capacity of member organisations, and providing research and data.
"The founding members of AFIN have anticipated the financing needs of social enterprises and are doing the last approaches for legally establishing a non-banking financing institution bringing flexible and necessary solutions for the sector. We are glad that we currently have 112 shareholders and over 1 million lei share capital. The number of shareholders is growing and we believe that by April 1st, the deadline for legal incorporation, there will be even more shareholders. AFIN will be a product created by people for people with ideas of social, environmental and community development impact. The entity will also be authorized as a social enterprise and will operate according to the economic and social principles specific to the social economy sector ", said Angela Achiței, social entrepreneur and president of ADV Romania, founding member of AFIN.
Other measures included in the Action Plan for the Social Economy
The document, a future pillar for the development and innovation of the social economy sector, contains several measures. The action plan is designed to help the European social economy thrive, harnessing its economic and job-creating potential, as well as contributing to a fair and inclusive recovery and the transition to green and digital solutions.
The European Commission aims to act in three areas:
- creating favorable conditions for the development of the social economy;
- opportunities for the establishment and growth of organizations in the field;
- ensuring the recognition of the social economy and its potential.
The Commission will propose in 2023 a Council Recommendation on the development of the framework conditions for the social economy. The Commission will publish guidelines for Member States on the tax frameworks applicable to social economy organizations and will facilitate access to guidelines on State aid.
The action plan also aims to strengthen good practices in socially responsible public procurement. Also in 2022, the Commission will set up a European Competence Center for Social Innovation.
Next year, the Commission will launch a new EU social economy portal, giving actors in this sector a unique place to find all the information they need on funding, policies, training programs and initiatives available to the EU.
The Commission will also launch a study to collect qualitative and quantitative data in order to better understand the social economy across the Union, will organize training courses for civil servants on various relevant topics from a social economy perspective and promote the social economy at regional and local level by encouraging cross-border trade.
The full document prepared by the Commission and under parliamentary scrutiny can be consulted here.