by Martin Banks
In a conference in the European Parliament on Monday, the President of FEBEA Pedro Manuel Sasia Santos went on, saying that “Europe must be built on the promotion of peace, sustainability and solidarity. Ethical finance is prepared to offer this future”
His message is timely as it comes after a recent meeting of EU Defence Ministers in Brussels to discuss Europe’s Defence Readiness Roadmap 2030,.
MEP Irene Tinagli, Co-Chair of the Intergroup on Social Economy pointed out to the challenges in today’s world “such as green economy, energy transition, housing, inclusion, progress of social economy”, adding that “ethical finance has a crucial role to play” notwithstanding the changing EU priorities, such as competitiveness and defence.
Teresa Masciopinto, the President of Fondazione Finanza Etica, added: “When capital supports people, communities and sustainable enterprises, it shapes essential conditions of our lives, such as work, inclusion, and access to essential services. Finance becomes a driver of equality, participation, and democracy, contributing to Europe’s resilience”.
Mauro Meggiolaro, Author of 8th Report on Ethical Finance in Europe, underlined that 93% of loans by ethical banks go to micro-enterprises, which are often excluded from traditional credit for being risky or less reliable, adding that ethical banks apply stricter criteria concerning investments in armaments, fossil fuels, or companies that violate human rights.
Highlighting that 70 percent of the loans by ethical banks are directed to the social economy, Federica Ielasi, Vice President Banca Etica, explained that ethical banking and social economy are not two separate worlds but the two sides of the same European architecture”. Referring to the lack of connection among EU policies and implementation tools, she added “They are not designed around the size or the needs of social enterprises or smaller mission-driven banks”.
“Public instruments such as Invest EU are essential but often too regionally centralised”, she added while stressing the need for guarantees, such as the Social Economy Guarantee Fund in Italy and Spain, as well as capital instruments, including patient capital, to advance the social economy.
Reminding that social economy was at the centre stage towards the end of the Covid period, Ruth Paserman, Director for Funds, Programming and Implementation at the European Commission noted: “Although the EU has different priorities now, we have to show that social economy contributes greatly to EU competitiveness”.
Vice President of the European Investment Bank Gelsomina Vigliotti pointed out to one of the main goals of Mario Draghi’s report was to preserve the European social model adding that “Europe can be social and competitive at the same time”.
Executive Director of the Global Alliance for Banking on Values Martin Rohner said: “We need longer term patient capital to support social economy. Capital markets right now are focused on short term optimisation of risk returns and short-term solutions. A different kind of capital market is capable of channelling resources to the social economy actors that have less liquidity but more impact.”
Referring to a recent EU Barometer survey about a vast majority of EU citizens that want more support to social economy, President of Social Economy Europe Sarah de Heusch underlined that “social economy is not a care and repair economy but a fully-fledged economy that works”.
She went on saying: “As to defence, there is a misunderstanding that equals European defence to buying big machinery. What are we defending? Land sovereignty or our unique model of social protection, diversity, social dialogue and democratic practices?”
“The cost of defence cannot go at the cost of social policies. We need an economy that works locally and to achieve this a strong social economy is required. Take the example of Ukraine, a strong civil society is a strong competent of Ukraine’s defence. We should learn from that”, she concluded.
By: N. Peter Kramer
