This time we are reporting from sunny Madrid, where the European Investment Bank's conference on financial instruments for micro-credit, the social economy and employee buyouts has just finished.

The event brought together experts in the field of employee ownership and representatives of the cooperative movement, the financial sector and the EU institutions.

Presentation of the ESF+ Study on Employee Buy-outs

The event marked the first public presentation of ESF+ study on employee buy-outscommissioned by the European Commission and the European Investment Bank, and co-authored by the Institute for Economic Democracy. The monograph provides a comprehensive overview of the existing practice of employee buyouts in the European Union and beyond, examines the scope for wider implementation at EU level, and makes concrete proposals to decision-makers at Member State and EU level. Slovenia, which is the focus of one of the study's a whole chapter, is highlighted as one of the leading countries in this field, alongside Italy, Spain and France. The study also pays particular attention to the European ESOP, which is emerging as a promising tool for addressing employee ownership succession that could be used by other Member States besides Slovenia.

Employee ownership in the European Union

Our Kosta Juri participated as a representative of the IED in a panel presenting the most advanced models for employee ownership transfer in the European Union. Francesca Montalti presented the work of Legacoop produzione e servizi, which in Italy - with the help of the Marcora legislative framework and in close cooperation with financial institutions such as Cooperazione Finanza Impresa and Banca Etica - helps workers to save bankrupt companies. Pedro Blazquez from COCETA focused his speech on the Spanish experience of employee ownership, focusing on cooperatives, which account for 5 % of GDP in that country. Meryem Yilmaz from CG SCOP. Unlike in Spain and Italy, cooperative conversions in France also address the problem of succession in profitable enterprises. However, this is still a rarer phenomenon which - due to the difficulty for employees to obtain financing - is mainly confined to the service industry, where on average better paid employees are in some cases able to finance the buy-out with their own savings.

Turning the challenge of ownership succession into an opportunity

In his speech, Mr Costa drew attention to the need for a European strategy to tackle the challenge of employee ownership-based succession. He quoted figures from the European Commission, according to which around 450,000 companies in the European Union are expected to undergo a change of ownership every year. These processes affect more than 2 million jobs, and a third of transfers are unsuccessful. He pointed out that a key aspect is often neglected in discussions on pressing issues such as strategic autonomy, competitiveness and security: corporate ownership. He noted that if the European Union really wants to achieve its goals, it must take a leading role in promoting succession solutions that will anchor ownership among local people. Employee buyouts are such a tool. Although in Europe these are known mainly as a solution to save jobs in times of crisis, models such as ESOPs and EOTs, which are widespread in countries such as the United States and the United Kingdom, are an established tool for succession in profitable businesses.

The European ESOP provides a framework for introducing such models in other EU Member States, including those already renowned for their cooperative sector. For the latter, it would in particular help to remove barriers that prevent the wider implementation of employee buy-outs in the context of the search for succession solutions. The European Union can play a key role here, both by providing financial support instruments and by providing guidance and recommendations. This would ensure that the creation of an economically advanced continent goes hand in hand with social inclusion.

We are delighted to note that key decision-makers at EU level are also aware of the great potential of employee buy-outs to build a competitive yet socially consensual economy. This was evident, among others, in the speeches by Andrea Da Pozzo, Policy Officer at the European Commission, and Bruno Robin from the European Investment Bank.

A big thank you to Miglena Dobreva and the entire fi-compass team for the flawless organisation of the event.

Read more about the event here.