Social economy: Unleashing its full potential for a stronger EU
2025 marks the midterm review of the European Commission’s 2021–2030 Social Economy Action Plan (SEAP) – a pivotal moment in shaping the EU’s long-term strategy to boost social investment and strengthen the social economy.
As part of this review, SEE has contributed an in-depth assessment of the SEAP’s progress: what’s working, and where more ambition is needed.
Summary
The adoption of the SEAP by the European Commission (EC) in December 2021 is widely recognised by the SE ecosystem as a major milestone in itself.
The biggest achievement of the SEAP is to define the social economy which allows a common understanding of this diverse ecosystem. The operationalisation of this definition remains a challenge in many fields. The Council Recommendation on social economy framework conditions is also very significant; it should strengthen political recognition at national level, enabling national strategies for SE and institutionalise dialogue mechanisms with SE stakeholders among Member States (MS). Other key achievements include the Social Economy Gateway, the recognition of Proximity and Social Economy as one of EU’s strategic industrial ecosystems, the development of the Transition Pathways, the cross-DGs collaboration carried out during last term, and the improvements in adapted financial support.
Furthermore, concrete measures to foster social economy in key policies such as taxation and public procurement are proposed but still need to be adopted. The SEAP has also led to improved financial instruments (InvestEU & SIFTA) and funding for SE (earmarked ESF+, EaSI & COSME funds in particular), which are at risk now (e.g. COSME funds were suspended in 2025) and most of all under current MFF negotiations. The SEAP has also reinforced recognition of the social economy as a driver of social cohesion and civic participation at global level as well as at local level. Finally, some improvements in data and statistics on SE must be acknowledged although data is still lacking in many countries.
All this progress is at risk by changing geopolitics and new EC priorities of defence and competitiveness. These new priorities have deprioritised SE, which means the ecosystem is no longer identified as a key actor that can support essential EU transversal economic policies such as Competitiveness, Industrial Autonomy, Clean Industrial Deal and prosperity. SE is present in all economic sectors. It supports a locally rooted economy (that can export but will not delocalise) that answers the needs of communities. Thanks to its democratic governance, SE is at the forefront to identify societal issues and is a champion of social innovation. Its core values also make SE a driver of EU Digital Tech sovereignty, creating an EU digital economy based on data as common goods and giving people sovereignty over their data. Yet is not yet invited to the table on any of these issues.
In particular, SE provides unique solutions that provide access to all key sectors for the EU such as housing and clean energy, agriculture and food sovereignty as well as the Circular Economy. The SE ecosystem is also composed of different investors and funders such as ethical and co-operative banks, credit unions, microcredit centres, foundations and mutuals, which support the locally rooted economy and could be mobilised to support the Single Investment Union (SIU) and invest in the EU’s industrial autonomy. This requires proper investment support mechanisms and adapted policies.
The new EC priorities are also de-facto reducing ambitions and means for Social Europe. SE is a key component of the European Pillar of Social Rights and Preparedness, through unique solutions in terms of social services, healthcare, education, training, territorial and social inequalities, fighting poverty, inclusion of the most disadvantaged groups (youth, women, people with disabilities…) and for preparedness and civic protection. Yet the funding for these policies will be reduced at EU and MS level as a consequence of EC’s proposed prioritisation of defence and pressure on MS to introduce austerity measures. These proposals will have a tremendous impact on the funding of SE and its capacity to support the continued development of the cohesive social EU.
SE is also a pillar of the EU’s Democracy Shield through the democratic governance it develops within enterprises and associations but also through the specific contributions of civil society. Given the ideological threats to democracy, this aspect should be further developed in the second phase of the SEAP implementation.
In a nutshell, the SEAP has provided SE with great impetus to grow to its full potential. Most of the actions have been launched but are not yet fully implemented. This impetus is now in jeopardy. The deprioritisation of SE in the overall EC agenda shows that SE’s contribution to the EU economy is still not properly acknowledged.
SEE seeks the full implementation of the Council Recommendation, with deep EU-MS coordination and building on best practices from different countries. Secondly, we request enhancing social policies in the next MFF by maintaining and reinforcing stand-alone ESF+ and cohesion funds, simplifying access and earmarking EU funds for SE, stronger integration of SE in the European Semester and macroeconomic frameworks. Expanding and diversifying financial support with a variety of financial tools for the social finance sector to further develop the economic development of social economy enterprises is also required.
At legislative level, SE can be easily supported through the expansion of adapted tax regimes, public procurement and state aid rules. EU-level recognition of the SE families (associations, co-operatives, foundations and mutuals) as well as the full integration of SE in antipoverty policies and in defending democracy proposals is essential. This means better coordination and recognition of SE’s added value across DGs (i.e. in DG COMP, DG TAXUD, DG REGIO or DG BUDG), so they work together with the current DG EMPL unit. DG GROW’s elimination of its SE Unit is clearly a retrograde step.
The social economy ecosystem looks forward to collaborating with the Commission and EU institutions to work towards a prosperous future for Europe in which SE is recognised as an ally for the EU to address most of its main objectives and to defend the EU values.
