EU support to social economy & social entrepreneurship Ciprian Alionescu DG Employment, Social Affairs and Inclusion

Outline Social economy & social enterprise: pillar of the social market economy, Europe 2020 How does the EU concretely support it? Market building through EU-wide regulation European Social Entrepreneurship Fund (EuSEF) Budgetary instruments Progress Microfinance 2010-> Programme for Employment and Social Innovation (EaSI) Structural Funds (ESF, ERDF)

EU definition of social enterprise social mission entrepreneurial behaviour profit responsible, transparent, participatory governance shareholders

Market building through EU-wide regulation: European Social Entrepreneurship Fund (EuSEF) Regulation adopted by EP and Council in March 2013 ( EU-wide passport (EuSEF as investment vehicle brand): uniform rules for fund marketing, portfolio composition, eligible investment instruments, conduct & transparency 70% of fund volume invested in social enterprises (“eligible undertakings”) EuSEF may invest through equity, quasi-equity, debt, loans, any other type of participation EuSEF exposure limited to level of committed capital EuSEF must have clear & transparent impact measurement procedure (menu of possible aspects of impact to be measured, e.g. employment & job quality, social inclusion, equal opportunities, public health)

Programme for Employment and Social Innovation (EaSI) axes, 1 of which is Microfinance & Social Entrepreneurship The new programme will: ■ extend the support given to microcredit providers under the current European Progress Microfinance Facility ■ provide funding for capacity-building of microfinance institutions ■ support the development of the social investment market and facilitate access to finance for social enterprises Total budget for the microfinance and social entrepreneurship axis: ~€193 million for (current prices)

EaSI Microfinance : likely similar architecture Guarantees Microcredit providers at national / regional level EU budget (~ €88m) + EIB investment (under discussion) Microloans Funded investments Technical assistance & capacity-building

EaSI Social Entrepreneurship Guarantees Social enterprise investors at national / regional level EU budget (~ €96m) + EIB/EIF investment (under discussion) + possibly other investors Funded investments Preparatory Action "Social innovation driven by social business and young entrepreneurship" – launched in autumn 2013, several dozen applications now being assessed Capacity-building Investments of up to € 500,000 Social enterprises (non-listed, with turnover and balance sheet of max. €30m)

EU Structural & Investment Funds (in particular ERDF & ESF) Much larger source of support: together, ERDF & ESF will amount to ~€256bn for EU28 in ; of which ~€14.5bn for Romania (2011 prices) European Regional Development Fund: energy efficiency, transport, R&D&I, SMEs… European Social Fund: employment, education, social inclusion (human capital) Both ERDF and ESF regulations foresee an "investment priority" on promoting the social economy and social enterprise + social enterprises help achieve many EU objectives (work integration of handicapped people, energy efficiency, youth employment…) This could obviously be delivered not just through grants but also through revolving financial instruments (equity/ mezzanine/ loans/ guarantees) Investment decisions taken nationally/regionally, based on 7-year Partnership Agreement & Operational Programmes agreed with European Commission Preparation of these 7-year plans underway

European Social Fund Member States will have to concentrate ESF means on a number of objectives and investment priorities in line with the Europe 2020 Strategy; Objectives supported: Promoting sustainable and quality employment and supporting labour mobility Promoting social inclusion, combating poverty and any discrimination Investing in education, training and vocational training for skills and lifelong learning Enhancing institutional capacity of public authorities and stakeholders and efficient public administration A minimum share of 20% will be allocated to social inclusion; Greater emphasis on combating youth unemployment, promoting active and healthy ageing, and inclusion of most disadvantaged groups and marginalized communities such as Roma These are all areas where social enterprises can make a big difference and could (help) implement some investment projects

Thank you for your attention