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Pellervo, the Confederation Comments on the Working document of the Commission Services, Co-operatives in Enterprise Europe Pellervo, the Confederation of Finnish Cooperatives welcomes the Commission's document. The Commission's initiative is inclined to improve the image of co-operatives and increase the understanding of the co-operative model in Enterprise Europe. The first half of the document deals with the identity of co-operation overall and co-operation in Europe. This first part of the document is excellent and all important issues are reviewed. Co-operation is well acknowledged as a useful tool to organise economic activity. In the text, perhaps, there should have been more emphasis put on the traditional co-operative sectors - agriculture, retail, banking and insurance. It is a fact that these co-operative sectors are superior, regarding the extent of economic activity, the number of memberships and the significance for the EU-population, compared to the third sector and new co-operatives. These new sectors, however, are in relative terms more potential thus underlining of these sectors may well be motivated. The second half of the document deals with legislation (Chapter 3), co-operatives contribution to Community Objectives (Chapter 4) and understanding of the co-operative sector (Chapter 5). Hereby we can conclude: The European Co-operative Statute We agree that references to national legislation in the SCE should be as limited as possible. The statute should be broad framework legislation, allowing co-operatives to decide for themselves how they want to act. Finnish legislation was changed from the beginning of year 2002 almost exactly accordingly to the six points mentioned on page 16. The Finnish co-operative law is now even a broader framework than before. The number of persons required to create a co-operative was reduced from five to three and possibilities to issue specific risk capital bonds and bonds to non-members were given etc. An easily implemented legislation might be the reason to that Finland is one of the most co-operative countries in the world. Hence, it is important that the SCE is broad framework legislation and as such an interesting alternative; functional and easily implemented on future cross boarder or trans-national co-operatives. Co-operatives' contribution to Community Objectives The document gives a long list of co-operatives' possible contribution to Community Objectives. The co-operative option should be taken more in account in future community programs concerning both the third sector and medium and small-scale enterprises. We warmly welcome the commission's initiative also in this respect. Ensuring an accurate understanding of the co-operative sector The document recognises the fact that co-operation is not sufficiently understood within the European Union. Programs that increase co-operative understanding and training within education at all levels should be started. Co-operative training and research at European universities do not reach the same high scientific standard as in e.g. the United States or Canada. Commission financed programs to improve co-operative education at university level should be launched. Co-operatives as a possible instrument to solve social problems and create jobs should be more acknowledged. The Commission should promote projects that increase all-round co-operative education. Co-operative organisations both on the EU- and national level are best experienced to lead such projects. Special attention should be paid to the organisations within the CEEC-countries to improve their experience in co-operative matters and developing their functions. As central organisation for co-operatives in Finland we have experienced that the existence of accurate data on co-operation vary in the different EU-countries of today, not to mention CEEC-counties. It is of great importance that reliable data on co-operation could be at hand. Sufficient data is a prerequisite for all understanding, research, benchmarking etc. Here again both EU-level and national organisations, promoted by the Commission, could play a vital role in collecting data and presenting them in a comparable manner. The document does not deal with Competition legislation at all. This legislation is, however, of great importance for the functioning of co-operatives in the EU. It is a fact that competition authorities have shown complete lack of understanding of the co-operative model by prohibiting the function of the co-operative network. As a consequence, in practise all second-degree agricultural co-operatives have been demolished in Finland. They have been forced to find functional, but non-co-operative concepts, for their activities. In e.g. the Finnish co-operative insurance sector, the co-operatives and their central insurance company are forced to function through a temporary exception. Understanding the co-operative sector should also include understanding that the co-operative network model or the co-operative group of companies is not a cartel, but is a question of functioning in a traditional co-operative manner. In this respect co-operatives do not require any special treatment, only proper understanding of their organisational set-up and acknowledgement of this in the competition legislation. Concerning relevant markets, this aspect should not prohibit mergers of companies to an optimal size. Companies working on one "relevant" market also export to other "relevant" markets and many operate internationally as well. The question is: can companies that are not allowed to merge and achieve optimal size when operating on small national markets ever compete with companies allowed to merge on larger national markets. Relevant markets, as defined in EU today, are not isolated from one another and therefore artificial. The EU is supposed to be a single market and should be considered as such with few exceptions if any. More attention should be paid on the misuse of monopoly positions than on preventing the formation of monopolies on local markets. Per-Erik Lindström
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