Opinion on the proposal for a Council Decision relating to a multi-annual programme (1994-1996) of work for cooperatives, mutual societies, associations and foundations in the Community () (94/C 388/05)

On 10 March 1994, the Council decided to consult the Economic and Social Committee under Article 198 of the Treaty establishing the European Economic Community on the abovementioned proposal.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the Committee`s work on the subject, adopted its Opinion on 8 June 1994. The Rapporteur was Mr Ramaekers.

At its 317th Plenary Session (meeting of 6 July 1994) the Economic and Social Committee adopted the following Opinion by a unanimous vote.

1. Introduction

1.1. In putting forward the programme under review the Commission is pursuing the goals set out in its 1989 Communication on 'Businesses in the "économie sociale" sector and Europe`s frontier-free market` (). In the explanatory memorandum to the Proposal for a Council Decision the Commission rightly points out that cooperatives, mutual societies and associations, whilst having their own specific features, play a full part in the market and in the business world. At the same time the role which they can play in overcoming the economic crisis affecting Europe is well known. The économie sociale sector is demonstrating its value to the full and it is also referred to in the section on employment in the Commission`s White Paper on Growth, Competitiveness and Employment ().

1.2. The Committee cannot fail to support this goal. It has always recognized and given its support to the important role played by cooperatives, mutual societies and associations in European economic activity, regional development and their contribution to the building of a social Europe. This has been achieved while applying certain values which distinguish these forms of business, such as the primacy of the individual over capital, development of the individual, free association, democratic management and the values of autonomy and citizenship. The Committee has also helped, through the medium of its various Reports and Opinions, to promote a better understanding of this sector and its requirements ().

1.3. The Committee, would, however, question the procedure which has been followed. It would appear that certain categories were not consulted as much as they should have been at an earlier stage in the drafting of the programme. Furthermore, the Committee was consulted on 10 March but as early as December of the previous year a declaration of interest was published in the Official Journal (OJ No C 332/93) setting out the principal guidelines defined in the programme. Would it not have been more logical to have consulted the Committee at an earlier stage?

2. General comments

2.1.

Mention of foundations in the title of the programme

2.1.1. The Committee notes that 'foundations` are mentioned in the title of the programme, alongside cooperatives, mutual societies and associations. The Committee cannot allow this fact, which tends towards the recognition of foundations as a fourth category, to pass without comment, although the Commission cannot be held responsible. It questions the justification and advisability of this usage.

2.1.2. Foundations are clearly not new bodies. References are made to them in Declaration 23 appended to the Treaty of Maastricht, and they contribute to the funding of projects involving the development of cooperatives, mutual societies and associations. The question arises, however, as to whether all foundations can be included here. The aim, activities and organization of foundations are extremely varied. They are sometimes used as a cover for legal or fiscal purposes by enterprises for whom the values shared by cooperatives, mutual societies and associations are far from constituting a priority.

2.1.3. The legal arrangements applying to foundations vary between Member States, and cannot always be distinguished from those governing associations. The laws applying to associations and foundations are not the same in France, but no distinction is drawn in Belgium. It is also significant in this regard that there is no draft statute for a European Foundation and the term foundation is merely listed in the annex to the draft provisions in respect of a European Association in which a 'foundation` is described as a legal person who may help to establish a European Association.

2.1.4. In the Committee`s view such a standpoint is not acceptable without at least providing a definition of a foundation which may be part of this sector, and deciding whether it should be considered as a fourth component.

2.2.

Ambiguity between cooperatives, mutual associations and associations, and small and medium-sized enterprises

2.2.1. It is clear from an examination of the contents of the programme that there is a degree of ambiguity between the types of business in question and small and medium-sized enterprises. In its explanatory memorandum the Commission points out that 'the majority of cooperatives, mutuals and associations are small and medium-sized enterprises or are at the service of SMEs` (page 1). This statement is toned down at a later point in the Commission`s document where it is stated that 'this sector features entities of widely differing size; not all would qualify as SMEs` (page 10).

2.2.2. It is understandable that on policy grounds and for budgetary reasons there is a need to refer to SMEs and it is a fact that many cooperatives for example are SMEs. Due regard must, however, be paid to the larger cooperatives, mutual societies and associations, which must not be underestimated or excluded since they operate in a Community-based and multi-national way, and also contribute to the overall dynamism of the area.

2.3.

An ambitious programme

2.3.1. The proposed programme is comprehensive, not to say ambitious. There are four main thrusts to the programme, namely: the need to achieve a better understanding of the area; the identification and removal, where necessary, of obstacles preventing the development of the sector; the establishment of trans-national collaborations; and the promotion of pilot projects. This is the reason why the Commission rightly draws attention to the ban on establishing pharmacies in the form of cooperatives in a number of countries. The Committee does, however, question whether such a programme is realistic and it fears that pursuing such lofty - and, above all, so many - objectives, may jeopardize their achievement.

2.3.2. Beyond specific action for cooperatives, mutual societies and associations, the programme also refers to strengthening action within other Community policy areas, where such action may apply to them (). The Committee supports this initiative, since the enterprises concerned are not always aware of the opportunities offered by these policies, despite the fact that they can actively contribute to the achievement of the objectives pursued.

2.3.3. The Commission also puts great emphasis on the transfrontier aspect. This is an essential condition for the sector`s development - which, however, is only possible within an intersectoral framework, itself rooted in an intersectoral approach at national level.

2.3.4. The Committee welcomes the fact that non-member countries and future Union Member States have not been neglected. They may lend considerable new impetus to this field and help achieve the objectives set.

2.4.

Non-reference to statutes

The programme mentions neither draft statutes for cooperatives, mutual societies and associations nor directives on the role of workers. The Committee realizes that the procedure is in progress, and that the programme cannot intervene on this matter. Nevertheless, it would have been helpful to mention its importance, if only in the explanatory memorandum, since the enterprises concerned require an appropriate legal instrument.

3. Specific comments

3.1.

Essential ingredients for the development of cooperatives, mutual societies and associations

3.1.1.

Training

3.1.1.1. The Committee wholeheartedly endorses the inclusion of a paragraph on training. While checks on whether these bodies are using existing schemes are quite justifiable, it is even more essential that the sector`s particular features are acknowledged by setting up relevant pilot projects.

3.1.1.2. Training must not be restricted to the heads of societies or associations. It should of course involve the members of cooperatives, mutual societies or associations, but also employees and management. The Committee assumes that all training questions will be discussed with staff representatives, who need to be aware of belonging to something different and unique, to be seen in a European context. To this end, one of the primary concerns is to impart to these target groups not only an awareness of the area as a whole, but also of their particular sector of activity.

3.1.1.3. The Committee feels bound to point out that no training effort will succeed unless it receives the backing of national governments willing to attach importance to training, specifically in the area in question.

3.1.1.4. The programme should also encourage the development of types of training aimed at promoting the concept of economic democracy among the general public. One way might be through school education, from primary level onwards. This would also allow the unfamiliarity which surrounds the sector to be dissipated. From this point of view, training must, of course, go hand-in-hand with information.

3.1.2.

An appropriate legal instrument

The Committee would reiterate that an appropriate legal instrument is essential if the transfrontier experiments contained in the programme are to be conducted.

3.1.3.

Financial aspects

3.1.3.1. Cooperatives, mutual societies and associations often face difficulty in seeking funding. Financial resources are a key question for them, especially during a recession when growth and joint action are needed to secure a place on the wider market. The working programme provides for checks on the degree of use of existing Community resources with a view to their improvement, if required. This is a necessary aim.

3.1.3.2. It might, however, be helpful to recall the other financial projects either under way or planned. SOFICATRA exemplifies the establishment of a European mechanism for quasi-capital funding of such entities. At national level, a number of financial construction initiatives are under way, attempting to set up projects which reflect the sector`s values. The results of such experiments should be disseminated, and they should be made accessible at European level.

3.2.

Programme applicability and follow-up

3.2.1.

The need for a consultative body

3.2.1.1. The Commission refers to the need to set up a permanent structure for contact between cooperatives, mutual societies, associations and foundations on the one hand, and the Community institutions on the other.

3.2.1.2. It is to be regretted that a such a structure had not been set up prior to the present Opinion, since the Commission would have benefited from better consultation with the area`s representatives on their needs.

3.2.1.3. A structure of this kind is also necessary if the programme is to succeed: indeed, it will have no impact unless a framework for contact is set up. Reference is often made to the designation and dissemination of pilot projects, establishment of partnerships, transnational cooperation, or identification of problems encountered. A consultative committee bringing together the Commission and representatives of the area is a necessary forum for exchange and coordination, not only for the European Institutions but also between the various countries. Without a body of this type, the Commission will only be able to achieve the objectives it has set itself in part, based on incomplete data.

3.2.1.4. Such a committee is also essential for programme follow-up. Provision has been made for an evaluation report on the implementation of the programme, to be submitted to the Council, Parliament and the ESC. In the interests of real efficiency, however, information must be available on whether action taken meets the needs of the sector, and only those involved in it are truly qualified to assess this. This is where the committee is valuable.

3.2.1.5. The Economic and Social Committee therefore strongly urges the EC Commission to establish a European consultative committee for cooperatives, mutual societies and associations. One of its main tasks would be to deliver opinions to the Commission on questions relating to these enterprises, and to assess the impact on these sectors of Commission activities in other fields, without overlooking the interests of the area`s employees. The committee would also need to maintain constant contact with the economic and social interest groups concerned.

3.2.2.

Budgetary resources for the programme

3.2.2.1. It should be borne in mind that in addition to the programme`s own budget, budget lines for the implementation of other Community policies such as training, the SME programme, or consumer policy may be tapped, thus increasing the resources available for developing cooperatives, mutual societies and associations, and allowing the necessary vertical approach to be strengthened.

3.2.2.2. The planned budget is for ECU 5.6 million for three years: an ambitious programme despite extremely modest resources, as the Commission points out. In view of the importance of this sector, and its economic and social role, the Committee feels that the budget should be increased. There should at least be agreement between the European Institutions. Parliament has called for an increase in the économie sociale budget: it might then be asked why the proposed budget fails to reflect this by taking the new budget line voted by Parliament as its basis.

4. Conclusions

To sum up, the Committee considers that priority should be given to the following in the proposed programmes of work:

- the introduction of training and information programmes;

- the provision of resources and the introduction of instruments for financing cooperatives, mutual societies and associations;

- the establishment of a consultative committee for the purpose of ensuring comprehensive and timely consultation of the economic and social interest groups concerned;

- the implementation of innovative pilot measures.

Done at Brussels, 6 July 1994.

The President

of the Economic and Social Committee

Susanne TIEMANN

() OJ No C 87, 24. 3. 1994, p. 6.

() Communication from the Commission to the Council, SEC(89) 2187 final.

() See Bulletin of the European Communities, Supplement 6/93.

() See for example, the Committee`s Opinion on the Communication from the Commission to the Council on 'Businesses in the "économie sociale" sector and Europe`s frontier-free market` (OJ C 332/1990) and the Committee`s 1986 Report on cooperatives, mutual societies and associations in the European Community.

() Developing Community statistics, for example (p. 20), or policy on development of cooperation with non-member countries (p. 23).