Brussels, 12/03/2013 (Agence Europe) - The social entrepreneurship sector that accounts for nearly 10% of European GDP but which is largely subsidised by public funds is a crucial challenge when it comes to employment in that it is today in dire need of new sources of funding at a time of austerity for national budgets. It is on this basis that the European Commission (see EUROPE 10511) and now the European Parliament have decided to create a EuSEF (European Social Entrepreneurship Funds) label. The aim is to allow and encourage investment funds to combine the search for profit with financial support to so-called “united” companies, while preventing the sector from becoming a niche for a new form of “fiscal optimisation”.
With the adoption of the report by Sophie Auconie (EPP, France) by a very large majority (603 votes to 27, with 46 abstentions), MEPs meeting in plenary session in Strasbourg on Tuesday 12 March were somewhat more cautious and wary of private stakeholders than the Commisison in its initail proposal. Many amendments adopted thus related to the danger that EuSEF might be used for purposes for which it is not intended. Tax evasion, by private individuals and multinational companies as well as the scandals and banking fraud that have hit the headlines in recent years have prompted the Parliament to point out that, although the nature of social companies may be very diverse, their main aim is not to make a profit for the owners or shareholders but to have a social impact. Transparent management, a heightened role for the European Financial Markets Authority (ESMA), sufficient own funds for the EuSEF, limitation of leveraging and the setting in place of clear and comparable indicators of what a company with social objective should be - these are all additions that aim to prevent every possible form of abuse. (JK/transl.jl)