Report on Council Regulation (EC) - Statute for a European Cooperative Society (SCE)

The report titled "Summary of the Synthesis Report on the European Cooperative Society (SCE) Regulation" was published in December 2024 by the European Commission. Authored by Antonio Fici, Gianluca Salvatori, and Barbara Franchini from EURICSE, it evaluates the impact of the SCE Regulation two decades after its adoption. This regulation is vital in formalizing cooperative values at the EU level, particularly in the context of sustainable housing and community-driven initiatives.

The SCE is established under Council Regulation (EC) No. 1435/2003, offering a cross-border cooperative legal form for EU/EEA member states. To form an SCE, it requires members from at least two EU/EEA countries. Notably, it promotes democratic governance, ensuring that each member has one vote, and mandates a minimum capital requirement of €30,000 with variable membership. Importantly, employee participation is mandated under Directive 2003/72/EC, emphasizing inclusivity in decision-making processes.

As of June 2024, there are 113 registered SCEs, with 75 active and 29 dissolved. Germany leads with the highest number of active SCEs (25), while 13 EU/EEA countries have no active SCEs. These cooperatives operate in various sectors, including renewable energy, agriculture, and housing, often focusing on community-driven objectives and sustainable practices, which can significantly contribute to the sustainable housing movement across Europe.

Several positive drivers encourage the adoption of SCEs. First, their adherence to cooperative principles promotes democratic governance and member-centric values. Furthermore, SCEs can circumvent restrictive national cooperative laws, such as Bulgaria's ban on legal entities forming cooperatives, thereby providing more flexibility. They also facilitate cross-border operations, allowing registered offices to be transferred across EU/EEA states easily, which is crucial for fostering regional collaboration.

Despite the potential benefits, SCEs face considerable challenges. The complexity of regulations, which heavily relies on national laws, results in high administrative costs. Moreover, there is a low level of awareness among professionals and stakeholders regarding SCEs, which hampers their growth. Additionally, many national cooperatives often fulfill similar needs at lower costs, leading to a perception that SCEs may be redundant.

The report makes several recommendations to enhance the effectiveness of the SCE Regulation. It suggests retaining and simplifying the regulation by reducing references to national laws and lowering the capital requirement. Furthermore, it emphasizes the importance of promoting awareness through targeted campaigns aimed at cooperatives, legal advisors, and policymakers. Lastly, it encourages funding support for SCEs, particularly in sectors like energy communities and digital innovation, such as blockchain-based decentralized autonomous organizations (DAOs).

In conclusion, while the SCE Regulation has seen low uptake compared to national cooperatives, it holds symbolic significance for advancing cross-border collaboration and aligns with modern initiatives like the EU’s Green Deal. The authors advocate for necessary reforms to enhance the SCE's practicality while preserving its cooperative identity, thereby facilitating sustainable housing and community-oriented projects across Europe.