ECONOMIC AND SOCIAL COUNCIL OF GREECE
OWN-INITIATIVE OPINION
THE SOCIAL ECONOMY
AND SOCIAL ENTREPRENEURSHIP
FEBRUARY 2013
EN
-2-
Own-initiative opinion of the Greek Economic and Social Council (OKE) on The social economy
and social entrepreneurship
PROCEDURE
The Greek Economic and Social Council (OKE) decided to draw up an own-initiative opinion on
"The social economy and social entrepreneurship" under Article 4 of Law No 2232/1994, which states
that the OKE "may on its own initiative express its opinion on other issues of social and economic
policy".
The Executive Committee of the OKE set up a working group with the following members: Georgios
Goniotakis, Dimitris Yiatras and Panagiotis Syriopoulos.
Mr Goniotakis (member of the Executive Committee) was appointed chair of the working group.
The following took part in the working group as experts: Stamatis Vardaros (political scientist),
Konstantinos Lambropoulos (research assistant, General Confederation of Greek Workers) and
Paraskevas Paraskevopoulos (economist/development adviser). Afroditi Makrygiannis, scientific
adviser of the OKE, was responsible for technical coordination.
The working group conducted its work over three meetings, and the Executive Committee drew up its
report to the general assembly at its meeting on 19 February 2013.
After debating the matter at its meeting on 26 February 2013, the general assembly of the OKE
adopted this as its 285th opinion.
CES1661-2013_00_00_TRA_TCD
.../...
EN
-3-
INTRODUCTION
In between the traditional public sector and the market a third sector has been developing, especially
during the last few decades, known as the social and solidarity economy. The first social economy
entities appeared in developed countries during the 19th century initially in the form of cooperative
societies, mutuals, non-profit-making organisations and associations with the legal status of
cooperatives or non-profit-making organisations under civil law. The social economy, and social
undertakings in particular, were an outcome of the oil crises in the 1970s and the progressive
abandoning of the then prevailing Keynesian economic model, which had successfully integrated
growth and welfare policies.
The increase in unemployment and poverty in Europe and increase in social exclusion had a
considerable impact on demand for social services and benefits provided by the state. The supply of
social goods was affected significantly by both the weak financial position of the state on the one
hand and unwillingness of the market to meet new needs on the other.
The above factors were the starting-point for development of the social and solidarity economy. This
sector includes all exchanges of goods and services that take place outside the public and private
sectors. The social and solidarity economy is therefore called the "third sector". Its returns are always
related to a kind of formally defined and functional collectivity.
According to the definition given in Article 1, first paragraph, of Law No 4019/11 on the Social
Economy and Social Entrepreneurship, "social economy" denotes all economic, business, productive
and social activities that are conducted by legal entities and associations whose statutory objective is
to pursue the collective good and serve more general social interests.
The second paragraph of the same article also defines "collective goal" as the promotion of collective
activities and protection of collective goods through development, economic and social initiatives of a
local, regional or wider nature. Such activities are understood to mean cultural, environmental and
ecological activities, including for example services to regenerate problem neighbourhoods and
environmental waste management services, as well as activities of a social nature such as provision of
assistance to elderly and disabled people. The final dimension of the third sector comprises activities
conducted by vulnerable population groups who are on the margins of the private sector.
1.
The social and solidarity economy
Social undertakings are active in almost all sectors of the consumer economy (agriculture, processing,
commerce, services). The social economy does not include activities that are assumed to be "socially
harmful", such as the production of military equipment, gambling activities, etc. Finally, there are
important exceptions which in a sense also establish the functional limitations of the social economy
sector within the economic system, specifically in the sphere of technological research and
CES1661-2013_00_00_TRA_TCD
.../...
-4development of products and innovative processes, as well as the production of goods and services
intended exclusively for companies, where social undertakings only operate in exceptional cases.
Social enterprises include in particular entities that cumulatively fulfil the following criteria:
a)
b)
c)
d)
e)
f)
g)
h)
their sole statutory objective is to provide social benefit, by producing goods or providing
services of a collective or social nature;
they give priority to people or to work, as opposed to capital;
they apply a democratic decision-making system;
they are autonomous in administering and managing their activities;
they provide for their profits to be used for their statutory objectives, after which they may
distribute those profits to a limited extent;
their operations are based on the principle of sustainable development;
their activities belong exclusively to one of the categories mentioned in Article 2, paragraph 2, of
Law No 4019/11;
they develop their activities over at least three years before submitting an application for
registration under Law No. 4019/11.
Another important feature of the social economy is its regional dimension. In certain countries, ethnic
issues have been decisive in establishing a parallel regional collaborative/cooperative economy (e.g.
Mondragon in the Basque Country, Spain). In other countries, regional de-industrialisation and
consequent unemployment have given a substantial boost to development of the social economy as a
means first and foremost of combating unemployment. Obviously, the more decentralised the system
of local government, the greater the incentive to set up social economy infrastructure at local and
regional level.
No precise correlation has been noted between the legal form of an enterprise and its social features.
Companies limited by shares (registered or bearer) exist that can be state-owned, private or social.
Typical examples of a social enterprises in the form of limited companies are community interest
companies ("laikes metochikes etairies"), community-based companies ("etairies laikis vasis") or
limited companies ("polymetochikes etairies").
In Greece, the following categories of enterprise are identified in Article 2(2) of Law No 4019/11 on
the Social Economy and Social Entrepreneurship (Official Gazette A' 216/11), based on their specific
goals:
a) Social Cooperative Enterprises of Integration: these are involved with the integration of people
in vulnerable population groups into economic and social life. At least 40% of workers in such
companies must belong to vulnerable population groups. Limited Liability Social Cooperatives
(Koi.SPE) are automatically considered to be Social Cooperative Enterprises of Integration1.
1
Limited Liability Social Cooperatives are governed by the provisions of Article 12 of Law No 2716/1999, as well as those of
Law No 4019/2011 and Law No 1667/1986, and Article 12 of Law No 3842/2010.
CES1661-2013_00_00_TRA_TCD
.../...
-5b) Social Cooperative Enterprises of Care: these concern the production and provision of goods and
services of a social and welfare nature to specific population groups, such as the elderly, infants,
children, the disabled and people with chronic health conditions.
c) Social Cooperatives of Collective and Productive Purpose: these produce goods and provide
services to meet collective needs (cultural, environmental, ecological, education, services of general
interest, promotion of local products, preservation of traditional activities and professions, etc.) and
promote the local and collective interest, employment, social cohesion and regional and local
development.
2.
Dimensions of the social economy in Europe
Business initiatives in the framework of the social economy have already been systematically
promoted in western and northern Europe for many decades already as a policy welfare state
substitution. The social economy is seen as an important means of promoting employment and
entrepreneurship, and of achieving the social integration of people from vulnerable groups. It has also
been demonstrated that it can provide durable economic systems at local, regional and national level2.
The European Commission has given particular priority to the social economy, in both the last
programming period (2007-2013) and the current one (2014-2020), through the measures provided
under its Social Business Initiative.
Size of the social economy: according to the latest available figures there are around 2 million social
enterprises operating in Europe, representing 10% of all European enterprises and employing over
11 million people. Employment in the social economy accounts for 6.6% of all jobs in the EU-15, and
7.9% of paid employment3. Fully one quarter of Europe's population have some sort of dealings on a
daily basis with an entity in the social and solidarity economy. In the banking sector, cooperative
banks hold a very significant proportion of the market: 47% in France, 40% in Germany, 38% in the
Netherlands, 33% in Austria and 25% in Cyprus, for example.
Institutional framework: specific legislation governing social undertakings was framed first by Italy in
the early 1990s, followed by Belgium in 1995 and then France, Portugal, Finland and Lithuania. A
law was enacted in Germany governing undertakings that employ people with serious disabilities. In
many other countries, e.g. the United Kingdom, the possibility of formalising the social economy is
currently being discussed.
Generally speaking, despite all the differences seen in both institutional frameworks and definitions
used by the Member States, initiatives on the social economy are infused with shared values such as
solidarity, social cohesion, social responsibility and democratic decision-making; above all, those
2
3
Α Better Future: Results of the network for better future of social economy. www.socialeconomy.pl.
70% of these jobs are in non-profit-making entities, 26% in cooperatives or associations, 3% in mutuals and the remaining 1% in
other entities.
CES1661-2013_00_00_TRA_TCD
.../...
-6involved in the social economy are not motivated by profit maximisation, but rather profits are
ploughed back in to the enterprise for its benefit and that of society. It is a different way of doing
business based on the general interest, economic and social development and democratic
effectiveness, but without any implication that activities in question should not yield profits.
Here is a brief round-up of activities by country.
United Kingdom: social undertakings are found in the production of organic products, environmental
protection, provision of personal services, and for combating unemployment and social exclusion.
Many of these are based in local communities.
The Netherlands: neighbourhood development undertakings and partnerships with objectives such as
protection of the environment and quality of life have been established under the same organisational
model. Since 1980 the country has been home to one of the first "ethical banks", Triodos Bank.
Scandinavia: worker cooperatives have been set up to provide training and integration services for
socially excluded groups in the labour market. Local government has also been involved in
developing an important tradition of social cooperatives in the spheres of adult education, leisure,
culture and provision of personal services to people with special needs.
Austria: social services are provided through the social economy, for instance childcare at home by
people from specific population groups.
Ireland: agro-tourism cooperatives and cooperatives for people with psychosocial difficulties.
Luxembourg: organisations that help women and long-term unemployed to integrate into the labour
market through work activity.
France: in 1997 the Caisse Solidaire was set up in the Nord-Pas de Calais region to address social
exclusion by financing programmes for young farmers, small businesses and non-profit-making
entities.
Belgium: chiefly development of "social business" initiatives. Enterprises have also been set up to
provide in-work training, as well as entities that integrate unemployed people into the labour market
through employment contracts.
Spain: finally, a typical example is provided by the Mondragon Corporacion Cooperative (MCC), a
collaborative entity involving over 100 independent cooperatives that make up a group of companies
divided into three different categories - finance, industrial and knowledge – situated in Mondragon in
the Basque Country. Today, the MCC group is the largest business group in the Basque Country and
the eighth largest business in Spain.
CES1661-2013_00_00_TRA_TCD
.../...
-7Policies of international organisations and the European Union to develop the social and solidarity
economy

United Nations
The UN has not yet incorporated the role of the social economy into its approach to the
economy. As recently as September 2012, the United Nations Research Institute for Social
Development4 issued a call for papers on "The potential and limits of social and solidarity
economy"5. The papers selected will be presented at a symposium scheduled to take place on
6-8 May 2013 in Geneva.

ILO
The International Labour Organisation (ILO) recognises the social economy as a key
component of the global sustainable development model in the 21st century.
In particular, the International Labour Organisation's Declaration on Social Justice for a Fair
Globalization, adopted at its 97th session in Geneva on 10 June 2008, states that: "… in a
world of growing interdependence and complexity and the internationalization of production
…productive, profitable and sustainable enterprises, together with a strong social economy
and a viable public sector, are critical to sustainable economic development and employment
opportunities".

European Union
The EU authorities are giving more weight - at least for now - to social solidarity as an aspect
of the current ongoing fiscal consolidation effort to limit public services than to the distinct
additional contribution social entrepreneurship could make to economic growth and putting
the European economy back on the global economic map.
However, certain EU programmes and initiatives6 accord with the provision of support for
social (micro-)enterprise start-ups7.
3.
Greece's experience with the social economy
Until recently, any form of social economy operation was ad hoc in nature, without central support
and existing in a fragmented institutional environment. Such operations took the form of women's or
farmers' cooperatives, social cooperatives with limited liability (Koi.SPE, Law No 2716/99),
4
5
6
7
UNRISD.
http://www.unrisd.org/80256B3C005BE6B5/(httpNews)/AF5E07B3A6F372C4C1257A870043345B?OpenDocument.
http://ec.europa.eu/contracts_grants/microfinance_en.htm.
For example, the following programmes:


Competitiveness and Innovation Framework Programme (2007-2013)
European Progress Microfinance Facility.
CES1661-2013_00_00_TRA_TCD
.../...
-8accredited entities running activities for people with learning difficulties, autism etc., cultural
associations with certain business activities, and social undertakings set up under the EU EQUAL
programme (2001-2005).
The recent adoption of Law No 4019/11 on the Social Economy and Social Entrepreneurship
introduced the Social Cooperative Enterprise as a legal entity with the objective of increasing
employment opportunities for people from vulnerable population groups. This law (specifically
Article 14) created the Social Economy Registry in the Social Protection Directorate of the
Employment Ministry. In accordance with a subsequent Ministerial Decision (Official Gazette
221/12), the General Social Economy Register was to be kept and managed by the Employment
Ministry. Thus the basic formal structure was effectively established for launching the operation of
social undertakings. Entities in the social economy that are entered in the special Register may receive
funding from the National Entrepreneurship and Development Fund and benefit from favourable
arrangements and incentives.
Within this formal framework, legal persons may form up to one third of the members of a Social
Cooperative Enterprise. Local authorities and public law bodies may not take part. Each legal person
belonging to a Social Cooperative Enterprise has one vote only. The profits of a Social Cooperative
Enterprise are not distributed to their members, unless the members are employed by the enterprise.
Five percent of the profits each year are kept in reserve, up to 35% are distributed to employees of the
enterprise to encourage productivity, as laid down in their articles, and the rest is available for
activities of the undertaking and creation of new jobs.
The current economic crisis has hit the Greek economy - and by extension Greek society - very hard,
creating very high unemployment levels. Systematic development of the social economy sector could
offer substantial solutions, especially for more vulnerable groups, both by creating new jobs and by
strengthening social cohesion, which is threatened by the increase in poverty and marginalisation of
large sections of the population.
A glance at the history of social enterprise in Greece shows that the first cooperatives began to be set
up at the beginning of the 20th century. The Almyros Farmers' Cooperative was set up in 1900. Law
602/1915 on cooperatives (in effect until 1979) substantially boosted the development of agricultural
cooperatives, effectively making them a key feature of agricultural production 8 . Unfortunately,
however, the development of these entities was largely undermined by the state itself, which for many
years used them as an instrument of social policy. For reasons that had nothing to do with their
interests, cooperatives were overstaffed, which affected the costs of running them. Finally, a large
number of cooperatives functioned in practice as a tool for distributing agricultural subsidies. All
these factors diverted farming cooperatives away from their main task of supporting agricultural
production.
8
The Panhellenic Confederation of Unions of Agricultural Cooperatives (PASEGES) reports that its members are organised in 6
350 agricultural cooperatives (primary), 29 fishing cooperatives and associations (primary), 11 beekeepers' cooperatives
(primary), 114 Unions of Agricultural Cooperatives, or EAS (secondary), and 25 Central Cooperative Organisations (KESE),
Associations of Agricultural Cooperative Organisations (KASO) and Cooperative Undertakings.
CES1661-2013_00_00_TRA_TCD
.../...
-9-
Non-agricultural cooperatives were set up on the basis of Law No 1667/86. Many problems were
encountered when developing consumer cooperatives, mainly with unsound financial management
practices and overstaffing. Supply cooperatives, on the other hand, developed steadily. Most of these
are comparable in staffing terms to the public sector and large private and public companies. Another
positive factor was, even until the run-up to the crisis, the development of credit cooperatives, which
flourished when the relevant legal framework was introduced (with Law No 2076/92) and when their
capital was boosted through public grants9.
Finally, it should be pointed out that the trade unions of large companies, both private and public,
engage in various operations in the social economy (e.g. supply cooperatives, collective
telecommunications services, children's playgrounds and camps, collective recreational services).
Reasons for the underdevelopment of the social economy in Greece
One of the fundamental reasons that the social economy is underdeveloped in Greece is the excessive
growth of the broader public sector, which has meant that the social economy in many cases has either
been completely taken over or attached, indirectly but manifestly, to the state.
Attaching the social economy to the public sector, in the narrow or broad sense, happened mainly
through public grants to entities in the social economy. It has unfortunately been demonstrated that
public subsidisation destroys the financial autonomy of such entities, transforming them into
extensions of the state within civil society.
Another reason that the social economy is underdeveloped is the distorted structure of the Greek
economy. The proliferation of the public sector led to the development of a private sector that was to a
large extent "state-dependent". This close relationship between the public and private sectors in
Greece all but completely throttled the development of social entrepreneurship.
The public sector in both the narrow and broader sense, as well as local government, have been
completely inflexible with regard to setting up new undertakings in the social economy (in areas such
as material recycling, waste processing, renewable energy, management of natural resources, culture
and archaeology/history).
Now more than ever, the social economy has a vital role to play in the development of a new
economic model for dealing with the economic crisis. A number of successful recent efforts in this
sphere are mentioned by way of example:

9
sales without intermediaries of agricultural products to consumers in various municipalities in
Greece;
The Union of Greek Cooperative Banks, founded in 1995, now has 22 members: 13 cooperative banks, 8 credit cooperatives and
one credit institute. It should be noted that credit cooperatives are distinctly regional in character. The crisis affected a number of
cooperative banks, which were absorbed by the much bigger commercial banks.
CES1661-2013_00_00_TRA_TCD
.../...
- 10 




activities of a large business association in the Elefsina area to obtain discounts for its members'
markets from the regional supermarket;
discount agreement of the Athens Chamber of Commerce and Industry (EBEA) and the Athens
Medical Group for the latter to deliver primary and secondary healthcare services at special rates
to some 100 000 members of EBEA, their families and employees;
setting up of the Thessaloniki "Bios Coop" (http://www.bioscoop.gr) with the opening of a
supermarket in Thessaloniki;
efforts by the union of workers at the Thessaloniki Viomichaniki Metaleftiki factory (a
subsidiary of Philkeram Johnson) to re-open the factory as a cooperative (http://biometal.blogspot.com);
acquisition by local citizens of the share capital of the Thessaloniki Water and Sewage Company
(EYATH) ("Movement 136").
EQUAL programme
The EU's EQUAL initiative to combat discrimination and inequality in the labour market, which was
administered by the Ministry of Employment, was used in Greece from 2001 to 2005 and 2005 to
2008 in the sphere of social entrepreneurship to strengthen the social economy and develop
entrepreneurship. This was the first systematic such effort in this sphere in Greece.
However, the strategic approach of the programme was not to develop a third economic sector, but to
integrate and re-integrate vulnerable and excluded social groups into the social economy.
Social Economy Fund
Law No 4019/11 (Article 3.2) provides for a Social Economy Register in which entities that meet the
criteria for classification as social enterprises may be entered on an optional basis.
Under Article 9 of the same law, a Social Economy Fund is to be set up with power to grant funding
to social enterprises, i.e. those enterprises that are listed in the Social Economy Register.
The type of assistance to be provided through this fund (guarantees, short-term and long-term loans,
equity investments, capital grants, etc.) is not specified in the Law.
Finally, Article 13.2 provides that any product from the winding-up of a social enterprise listed in the
Register must be transferred to the Social Economy Fund, obviously so that it can be made available
again.
Unfortunately, although as the main funding instrument of the social economy the Social Economy
Fund would be an innovation in international terms, it has not yet been set up. There is absolutely no
justification for this delay, at least on the technical front.
CES1661-2013_00_00_TRA_TCD
.../...
- 11 Facilities for developing social entrepreneurship
Articles 9 and 10 of Law No 4019/11 establish the eligibility of social enterprises for:
1) measures under ETEAN (National Fund of Entrepreneurship and Development) programmes;
2) Law No 3908/11 support for private investment for economic development, entrepreneurship and
regional cohesion (Official Gazette A' 8/01-02-2011);
3) programmes to support entrepreneurship;
4) OAED (Manpower Employment Organisation) programmes;
5) all types of active employment policies.
Finally, under Article 9.1 any employees of a social undertaking who belong to a vulnerable social
group and are receiving any assistance, grant, or welfare or other kind of benefit continue to receive
this regardless of their employee status.
*
*
CES1661-2013_00_00_TRA_TCD
*
.../...
- 12 PROPOSALS
In the current very difficult economic environment in Greece, developing a formal framework for the
social economy is only the first step in establishing its operation in Greece. Much more work will be
needed because the challenges that have to be met are neither few nor negligible. The situation in
Greece is that there is still a complete absence of services to support social undertakings, of special
programmes for funding start-ups of social firms, and of a favourable financing environment. Social
undertakings also have very low visibility in Greek society; where bodies like local authorities have
played a role in encouraging the development of the social economy in other developed countries, in
Greece there has no been no such tradition. The OKE believes that the social economy should have
the following features: a collective business approach and joint objectives with measurable socioeconomic results and strong elements of solidarity, combining to form a progressive, economic and
social citizens' movement.
As noted above, it is considered positive that the latest relevant legislation (Law 4019/11) abolishes
profit as an economic outcome of collective entrepreneurship and puts the social economy on the
same footing as the competitive economy. At the same time, though, it must be pointed out that the
provisions on social cooperatives lack the social entrepreneurship perspective with respect to dividing
profits, creating employment opportunities, developing innovation in the market and in the economy,
and broadening the realm of the public interest to go beyond traditional models of marginalisation and
welfare.
Developing the social economy system in such a difficult social and economic situation for Greece
will mean setting the following priorities:

securing the necessary financial resources in order to:
a)
provide the essential start-up capital to support social undertakings during their early stages of
operation;
guarantee short- and medium-term financial support with the aim of further extending and
developing social entrepreneurship.
b)
Obviously, ensuring financial resources is an issue that is both technical and social in nature.
Regardless of whether or not the state is willing to help provide funding for social entrepreneurship,
those that have a shared interest in such activity should endeavour to mobilise the necessary financial
resources either in the form of money (capital) or kind (above all labour supply).
The OKE therefore recommends that the Social Economy Fund be activated without delay. Although
as the main funding instrument of the social economy the fund is an innovation in international terms,
it has not yet been set up. There is absolutely no justification for this delay, at least on the technical
front.
CES1661-2013_00_00_TRA_TCD
.../...
- 13 We also recommend considering the possibility of issuing a Social Economy Bond, with an interest
rate equal to the ECB's benchmark rate, for businesses as an expression of corporate social
responsibility.

Cooperation with the Bank of Greece to loosen financing terms for Limited Liability Social
Cooperatives. To this end, it is recommended that a microcredit body be set up and that the
National Fund for Entrepreneurship and Development (ETEAN) back low-interest loans for
which Social Cooperative Enterprises could also be eligible.

Developing a comprehensive framework for supporting social enterprises, which will increase
their success rate (65-80%), as against providing grants (only a 10-15% success rate). This
includes creating an advisory framework for supporting social undertakings. For example, where
loans are granted, the lending body could offer advice to the social firm.
The OKE also believes that strengthening or supporting social entrepreneurship also means
considering the possibility of introducing tax incentives for social undertakings.

Removing bureaucratic and administrative obstacles to introducing favourable conditions for the
development of social undertakings, and identifying the areas of economic activity where social
entrepreneurship should be promoted, e.g. the environment, social tourism and social care. It is
thought that cross-border initiatives would be very useful here, so as to benefit more from the
experience of other Member States.

Informing and raising the awareness of local societies about the benefits arising from social
entrepreneurship, in particular by introducing social entrepreneurship programmes in schools and
stepping up cooperation with the private sector and local government through local agreements.
This also includes making use of the support mechanisms provided by the local integrated
programmes for vulnerable social groups (TOPEKO) and local employment plans (TopSA).
Information and awareness-raising activities, the TOPEKO and TopSA support mechanisms, and
all information and support material and programmes for the social economy and social
entrepreneurship should be perfectly accessible to disabled people (e.g. audio material, DVDs
with audio description for the blind, visual material in sign language, handbooks in Braille).

10
Incorporating the social and solidarity economy into the management and administrative
structures of public authorities. It is clear that the social character of the social and solidarity
economy makes it difficult to integrate it administratively and managerially into the public sector
system. One solution to this problem provided recently in France was to appoint a minister with
responsibility for the social and solidarity economy and consumers, attached to the Minister for
Economic Affairs10.
Benoît Hamon was appointed to this post on 26 July 2012.
CES1661-2013_00_00_TRA_TCD
.../...
- 14 The OKE proposes considering as a possible solution the setting up of an independent authority
or coordinating office for any administrative structures for the social and solidarity economy and
consumers.
_____________
CES1661-2013_00_00_TRA_TCD