How do cooperatives contribute to the current economic system and to human and social development? Claudia Sanchez Bajo

Global (finance and trade function in a loop) risk of implosion Finance interwoven with the Real Economy: trade, investment, labor, innovation Social, political, fiscal crisis in nation-states and regions NO TRUST / ‘ENOUGH!’ 2 The crisis, which one?

Cooperatives’ resilience 1 Especially when well built in advance! Trust, social capital Trust, social capital by generating equality, general wealth Legitimacy Legitimacy with cross – control and balances Information Information more transparent, circulating more widely, on real time basis Forward looking Forward looking to the long term (including the bad times!) 3

Cooperatives’ resilience 2 Funds Funds: common funds, reserves, indivisible reserves, investment funds, solidarity funds Adaptability Adaptability reinforce strategic strengths reduce weaknesses Cooperation with others to reinforce strategic strengths (research, innovation, inclusion, sustainability) and reduce weaknesses (using red lights, restructuring with solidarity) Solidarity mechanisms to manage work Solidarity mechanisms to manage work in times of crisis 4

The EU 5 Loss of autonomy and timing / At a loss in the face of shocks and external events! E.g. stock markets, IFRS, fair value, rating agencies Growing internal divergence without appropriate compensatory institutions (funds, EU bonds, monitoring) It thus depends on individual leadership where short termism takes over long term interests E.g. electoral pressures, banking sector, “the market” pressures based on the fear to any event that would detonate CDSs claims, etc.

The EU 2 6 The currency under threat Loss of competitiveness and an overvalued euro Greece needed a debt restructuring at the very beginning! Austerity policies were designed in 2005 but now feed a double dip recession/ deflation All major actors are highly indebted and calls for deleveraging Lack of transparency that decreases trust

The market is a historically constructed space that can incorporate new behavior and institutional patterns The challenge comes from vested interests conducive to the misallocation of resources (like Ulysses and the mermaids) But what are conventional enterprises doing now? 7

Cooperatives’ contribution NOW Equality: Freedom from debt (health and welfare) Promote cooperative solutions for the vulnerable: the young/ the old/ unemployed/ discriminated / migrants Risk: Rethink cross-controls and balances within institutions (participation, representation, information, all points of views on the same table, division of powers) Growth: non - tradable / tradable sector (sme scales) Long Term equity for a New Energy strategy and a “Service economy” (tension between private equity versus banking) Commons’ monitoring/ Efficient alignment implementation 8