COOPS under threat: Commission's decision might hurt 250 000 co-operatives

Date

12 Mar 2008

Sections

Innovation & Enterprise
Social Europe & Jobs

Press release

The Commission is currently examining so-called claims about state aids and uncompetitive practices against cooperatives and regrettably parts of the Commission continue to display their inclinations to see one business form only. The logic of the co-operative system will not be so easily put aside. Any common approach adopted by the Commission must ensure that competition is NOT reduced through limiting the diversity of entrepreneurial objectives and forms.

COOPERATIVES EUROPE believes that efforts to undermine the value of the cooperative enterprise business model are short sighted and originate from the misunderstanding of the ‘co-operative difference’.

The current legal cases, from Spain, Italy and France which are before the European Commission are actions undertaken by competing private businesses attempting to challenge the national co-operative laws. COOPERATIVES EUROPE, the European representative body says that the media reports that suggest that the complaints of ‘privileged tax status’ and ‘preferential tax regimes’ are disguises for ‘State Aid’ are at the best just misleading and at the worst just wrong.

The concerned part of the Commission is challenging the identity of the specific co-operative model of enterprise, despite the fact that Co-operatives are written into the Treaties as one of the entrepreneurial forms and are supported by the European Parliament and ECOSOC. The Commission gave recognition to co-operatives with the ‘Regulation on the European Co-operative Society’ (2003) and the Commission Communication on the Promotion of Co-operatives (2004). 25 European Member states out of 27 have a specific legislation for co-operatives.

The Commission is denying co-operative characteristics such as indivisible reserves, the co-operative dividend and limited interest on member financial contributions when these differences and their correlated specific legal and fiscal treatments are linked to the logic of the co-operative system and the special constraints and special ownership model of the co-operatives. Co-operatives are limited to work only with their members, they cannot go on the stock market and members are both users and owners.

As the ’Lisbon Objectives’ to create a competitive Europe with a high level of social cohesion are being systematically challenged by the supremacy of the economic goals over the social ones, the co-operative model as an entrepreneurial alternative combining social objectives with economic efficiency is systematically undermined by parts of the European Commission.

Expressing disappointment at the media reports, COOPERATIVES EUROPE co-Presidents, Pauline Green & Etienne Pflimlin reiterated, “this is not just an attack on a few major co-operatives but it represents a risk that could affect the whole co-operative system in all economic sectors across the EU. Small and large coop enterprises are affected and the coop systems in many EU states will be subject to legal challenges”.

COOPERATIVES EUROPE Director, Rainer Schluter said, “Now more than ever, the future of co-operatives in Europe will depend on the possibility of developing within the Union a specific legal framework for co-operatives; a point underlined to Commissioner Neelie Kroes during a meeting COOPERATIVES EUROPE had with her in September 2007”.

Co-operative enterprises, to fulfil their social and economic objectives need legal security, recognition of their difference and a non discriminatory environment. They do not want privileges but to have the possibility to compete on a level playing field that acknowledges their differences.

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