The question is not whether the Social Economy Action Plan can and should reach the Western Balkans, the question is how this can be achieved.
In December 2021, the European Commission published the European Social Economy Action Plan (SEAP) – Building an economy that works for people: an action plan for the social economy (1). Under the topic of creating the right framework for the social economy to thrive, actions to promote the social economy at the international level were identified (2). In particular, the Commission committed to actions to ‘improve the access of finance for social entrepreneurs in the Western Balkans, the Eastern Partnership and Southern Neighbourhood’(3). One year on from the launch of the SEAP and in the aftermath of the first EU-Western Balkans Summit to take place in the region, Euclid Network (EN) wants to reiterate the importance of this proposed action by the European Commission and the importance of ensuring that the vision of the SEAP for 2030 is a vision for the European social economy ecosystems and not bound only to EU Member States. Bringing social enterprise stakeholders from the region into discussions about the implementation of the SEAP in the region and giving them a seat at the table at high level event will help to bring social economy from the margins to the mainstream and ensure its centrality in the relationship between the EU and its neighbours.
The main actions that EN wishes to highlight as vital include:
- An alignment of funding objectives between the EU external funds and the vision of the SEAP
- An inclusion of language making reference to the social economy in pre-accession negotiations and funding programmes targeting the the Western Balkan
- A greater inclusion of the Western Balkan, Eastern Partnership & Southern Neighbourhood in funding programmes delivering the vision of SEAP
- A continued commitment from the Commission to take the visions of the SEAP into actions in EU Member States and beyond
In the last two decades, Western Balkan countries have had multiple challenges to face. During the global financial crises, at the start of the millennium, a downward trend in economic activity became visible. COVID-19 and Russia’s illegal war of aggression against Ukraine have only deepened questions related to these economic uncertainties. The impact of the global energy crisis combined with the sanctions imposed on Russia by the EU, NATO and other states are impacting the economies of Europe with the Western Balkans being no exception.
There is still much uncertainty about the effect the current crisis will have on the Western Balkans and it makes planning activities for the next period difficult. These challenges, as pointed out by the president of the Chamber of Economy of Montenegro, Nina Drakić, make it more difficult for companies in the Western Balkan region to do business (4). Therefore, it is essential to tackle these challenges. Especially since there are high levels of unemployment, inadequacies within the education system and mass emigration of young adults.
Euclid Network believes a more supportive framework for social enterprises to start up and scale their impact could be envisaged and pursued as part of the Commission’s current strategies in the Western Balkans. This does not only entail supporting individual enterprises but the ecosystem in which they operate and are supported. Social enterprises have continued to support the European economy while facing a state of perma-crisis, demonstrating their capacity to be resilient and contribute to social and economic value creation. Therefore, EN wishes to reaffirm the importance of including considerations of the objectives of the SEAP in the policies, actions and funding by the Commission that target the Western Balkans. Action from the Commission is not enough to support the continued development of the social economy in the Western Balkans however and all action will require a joint effort including national and local policy makers as well as social enterprise intermediary organisations.
One example of a social enterprise support organisation operating in the Western Balkans is Smart Kolektiv. They have been finding ways to apply business experiences and logic to solving social issues in the Western Balkan, helping companies work within the community in an articulate and strategic manner. They have helped various social groups attract the interest of the business world and at the same time helped entrepreneurs become more innovative, efficient and sustainable. Some of the beneficiaries of their programmes are young adults, who they have helped launch and successfully run their social businesses. Others are social enterprises and entrepreneurs who they have helped become more sustainable and competitive.
Another example which is well established in the region is the Regional Incubator for Social Entrepreneurs (RISE), which supports the youth of the Western Balkans. They believe that when you bring youth together through cooperation, ideas exchange and peer learning, they can learn, grow and make a change. RISE has created and continues to create a regional network for young social entrepreneurs and supports them in making their ideas a reality. Although both cases noted here such as Smart Kolektiv and RISE may receive some funding from the EU, as they operate beyond the EU’s Member States, they are still in-eligible for many sources of funding actively focussing on the SEAP.
The Western Balkans are already setting up frameworks for the social economy and European action can support the efforts national and local authorities are already pursuing. Two of the West Balkan six countries have already adopted official definitions of social entrepreneurship and the topic is gaining more legislative momentum in the region. Indeed Serbia introduced a legal form for social enterprises only a few months ago (5). In EN’s second edition of the Compendium of Good Practices (6), the case of Montenegro’s new framework for the development of female entrepreneurship has been featured. Their strategy has seen a growth in female ownership of SMEs, a strengthening of the position of female entrepreneurship and an increase in overall female entrepreneurship in their country. The Commission could build upon these initiatives pursued at the national level in the Western Balkans through introducing explicit reference to social enterprise and entrepreneurship in their funding instruments. This could build upon the momentum within the region, supporting existing actors engaged in providing social finance and making funding available to new and existing social enterprises.
For those intermediary organisations that do access some form of European funding, much of the funding is currently made available through the Instrument of Pre-accession Assistance (IPA) which is part of the European Neighbourhood Policy and Enlargement Negotiations. The IPA is the means by which the EU has been supporting reforms in the enlargement region with financial and technical assistance since 2007. IPA funds support the strengthening of the capacities of the beneficiaries throughout the accession process, resulting in progressive, positive (economic) development in these regions. However, intermediary organisations often lack an official framework through which to access funding. Complications relating to legislative and regulatory frameworks associated with geographic boundaries additionally add barriers for organisations when trying to access EU funds in accession countries. This barrier can also be seen in reverse with funds available for organisations in EU Member States facing restrictions on whether projects and funding can be deployed in accession countries by intermediaries.
One of the initiatives taken by the EU through the IPA, has been a platform for the Chambers of Commerce of the Western Balkan (7) to improve economic governance and competitiveness. This platform, which is a joint initiative of Chambers of Commerce and industry from Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia, has been awarded with around 20 million Euros. In 2017, this joint initiative established corporations with the objective to support the business community in the region to facilitate inter-business contacts and promote the region as one investment destination.
Although many of the objectives of this platform can be seen to be in line with objectives also pursued through social entrepreneurship, it does not mention social entrepreneurship explicitly. Hence, this can be seen to illustrate that there is currently a lack of an explicit framework through which social enterprises can access support. However, such an initiative could be adapted to support the further development of the social economy in the region. Therefore, Euclid Network wants to reiterate the importance to the European Commission to align EU funding programmes and policy agendas from different Directorate Generals which are already or which could be more supportive of social enterprises in the Western Balkans.
The SEAP is both a great tool to develop a regional social economy ecosystem in the Western Balkans and to attain the objectives of the IPA. Hence, Euclid Network supports the European Commission in providing a framework for social enterprise intermediaries to make accessing European funds easier, more sustainable and more aligned with other programmes. This will contribute to the implementation of the Sustainable Development Goals at the EU and global levels and it can help implement the principles of the European Pillar for Social Rights. These goals are also aligned with the development of the social economy through the framework set out in the SEAP and will support the enlargement of the EU based on the principles of both social and environmental sustainability.
One year on from the launch of the SEAP, a lot has already been done to start the implementation of many actions. There is still a lot to do to ensure that all the actions set out in the plan become a reality. EN and our members stand ready to support the Commission in the further implementation of the actions of the Action Plan.
- SEAP p.6
- SEAP p. 12