[by Antonis Vorloou | former Secretary of SSE of the Greek government]
This article which appeared in the Thomson Reuters Foundations News (Tuesday, 18 September 2018) is published with the Author’s consent.
Debt laden Greek consumers have been forced to choose cheap but with the economy improving, will they ‘buy social’?
Decades of crony capitalism and regulatory capture have left Greek productivity crippled, eroded trust between the state and the citizens and – most disturbingly – everyone has placed “self-interest” above all else. The 2009 debt crisis revealed in the most shocking way the deficiencies of the “system” with unemployment sky rocketing to unprecedented levels (28% by 2013) and purchasing power reduced by over 25%. A social economy has been successfully proposed in many countries as an alternative to the market economy, yet in Greece it was first introduced during the early years of the crisis and was mostly regarded as a policy tool to restrain growing unemployment.
Some also had the controversial expectation that it could be a way to shrink the public sector by outsourcing to social enterprises. The economic outlook was especially distressing during the period of the euro zone’s debt relief measures for Greece, due to the shrinking demand triggered by dwindling purchasing power. In such an environment the competitive advantage lays with the enterprise which can cut costs and prices and not with the one which integrate a social premium into their products.
For this new way of doing business to be successful, two ingredients are essential – an enabling environment and a culture of contributing to the society. In a growing economy, aided by policy measures, a social economy can thrive and be regarded as an employer of choice, given the reward of doing something good and worthwhile for the society. Fast forward to today. Post bailout, unemployment has dropped below 20%, the minimum wage is on the rise and an air of normalcy is returning to the economy. The ability of workers to choose their employer is increasing and the purchasing power of consumers is on the rise giving them the opportunity to choose not just the cheapest product, but also one that has social added value.
The Greek government, which views a Social and Solidarity Economy as the new paradigm for aligning the interests of the market to those of the society, has introduced a new legal framework for social enterprises in 2016. This expanded the previous definition of Social and Solidarity Economy entities beyond Social Cooperative Enterprises, which were first introduced in 2011 and includes Workers Cooperatives – a new legal form – as well as all other types of entities which have a social purpose, democratic governance and limited distribution of profits. This has given a boost to the sector which includes more than eleven hundred organisations, half of them created during the last 18 months, with a combined turnover of over 10 million euros and employing over a thousand workers as well as mobilizing numerous volunteers.
To strengthen this dynamism, an ambitious plan to provide a supporting environment for the development of new and existing Social and Solidarity Economy actors is also implemented. The plan, which has a budget of over 170 million euros for the next five years, includes business development services, financial support through grants and state backed loans and a multitude of dissemination actions.
Creating a culture of giving and building trust, on the other hand, needs a more subtle and systematic approach. Efforts to that end are being made in order to mobilize dormant societal forces so that this type of mentality becomes visible and eventually mainstream. These include the promotion of social impact measurement as well as cooperation with international organisations of the sector – such as RIPESS – in order to identify and implement new and innovative actions.
A Social and Solidarity Economy in Greece is still young but with the boost it will be given from governmental policies, together with the improving economic outlook post bailout, it has the potential to create a new way of doing business which is aligned with the interests of the many.
Antonis Vorloou is the former Special Secretary for the Social and Solidarity Economy law, which recognises different kinds of social enterprises in Greece.