Many cooperatives in the group not only abroad, but also outside of the Basque Country in the rest of Spain, make use of a significant number of non-member employees (Mondragon’s rule in the Basque Country is min 85% worker-member), especially in periods of high demand or season.

Non-member employees working side by side with worker-members, and enjoying substantially fewer rights (and shouldering fewer responsibilities) is a direct contradiction of cooperative philosophy that leads to creation of a more or less permanent group of second-class workers, e.g. the ongoing process of “cooperativisation” in the retail group Eroski in the rest of Spain. The Eroski Group grew rapidly and could not keep up with the speed of expansion, and, hence, a larger and larger percentage of the Eroski work force came to consist of non-member workers in conventionally-owned subsidiaries. As a result, Eroski is currently in the process of initiating a multi-year initiative to cooperativise the majority of its operations. It will be accomplished through the creation of a series of cooperative companies financed initially by Eroski, that will all be joined together in a a large, second-degree retail cooperative.

This transformation in Eroski will lift the ratio of member to total work force up to about 70% – 75%. The transformation will also be watched very closely by Mondragon cooperatives in the Industrial Group, since, as discussed previously, one of the most urgent issues facing that Group is how to establish legal, financial and organisation mechanism that facilitate cooperative or similar kinds of worker-ownership in many different countries where Mondragon co-ops have subsidiaries. The Eroski experience could eventually serve as a model that other firms could adapt to their operations abroad.

Mondragon Corporation’s historically most important unit is Fagor Electrodomesticos Group, which makes white goods. It employes roughly 2,000 people in five factories in the Basque region and has additional 3,500 in eight factories in France, China, Poland, and Morocco.

Mondragon in November 2013 announced that Fagor was failing and that the company was filing for bankruptcy protection. Ultimately, Fagor was unable to find financing to pay off debts of around $1.5billion related to a 37% slump in sales since 2007 that resulted from Spain’s economic crisis and housing market collapse.

As part of any restructuring or liquidation, Mondragon will provide jobs and income security for a certain period for some its workers-members in Spain. This is one of the cooperative network’s great advantages. It has announced that its internal insurance company Lagun Aro will pay 80% of the cooperative members’ salaries for two years, and the corporation will strive to relocate as many employees as possible to other cooperatives in the network (currently it was announced that 1,200 jobs were saved). The fate of the roughly 3,500 non-Spanish wage laborers (i.e., not cooperative members) in other countries is unclear.

The outstanding issue of Mondragon is that they were not able to transform an international private firm into cooperatives. Are the reasons legal, cultural, or economic?

Bearing in mind the trend to re-launch the debate on EFP at European level, it is important to give new impulses for an EU-wide discussion on the subject, while raising awareness and encouraging social partners at European level and in the Member States. The new agenda of the European Parliament includes setting up a working group which will focus on preparing the ground to support enterprising in the form of cooperatives in the European Union.

But so far in the Czech Republic neither trade unions nor any association of employers/entrepreneurs actively promote EFP. It is not yet a political issue. We want to change it! We wish to build a new platform for discussion about this topic without the baggage of ideology.

Multiple studies carried out in the EU have underlined the positive economic and social effects of employees’ financial participation schemes. Financial participation must be reconsidered in the constantly changing and new work environment as a policy tool to address some of the major issues brought by globalisation, including in terms of wage disparity, poverty and uneven distribution of the fruits of economic growth.

The social economy is a sector making a significant contribution to employment creation, sustainable growth and a fairer income and wealth distribution. It is besides a sector able to combine profitability with social inclusion and democratic systems of governance, working alongside the public and private sectors in matching services to needs. Crucially, it is a sector which has weathered the economic crisis much better than others and is increasingly gaining recognition at the European level. Also, is important that the social entrepreneurship has a great potential for activating endogenous development in rural areas, regenerating industrial areas in decline and rehabilitating and revitalising degraded urban areas as well as rectifying significant territorial imbalances. These are issues with which the Czech Republic is struggling with.

Innovative initiatives are already emerging across Europe and have been termed the New Social Economy: for example, as a result of the employment crisis in Europe, integration enterprises in their many legal forms (such as the Italian social cooperatives) have responded imaginatively to the labour market integration problems facing large groups of workers in advance of active public employment policies (such as the CIS, 92 Social integrated centers and ZAZ, 68 Vocational centers in Poland or EI, subsidiary trade unions and student and parents associations in Spain. Other examples of social innovation are represented by some citizens’ economic initiatives that have arisen with the aim to correct unequal terms of international trade between rich and poor countries, including organisations that specialise in fair trade.

Actually, fair trade is an interesting example from which we can draw a number of lessons. One of the key principles of a fair trade price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production that which is socially just and environmentally sound. Another key principle is transparency and accountability. Organisations keen on fair trade should be organisations transparent as regards in its management practices and commercial relations. It is accountable to all their stakeholders and respects the sensitivity and confidentiality of commercial information supplied. Ifthe organisation finds it appropriate, they should develop participatory ways to involve employees, members and producers in its decision-making processes. They ensure besides that relevant information is provided to all its trading partners. Communication channels are good and should be open at all levels of the supply chain. These are certainly values worth to follow.

Last but not least, the example from Mondragon which highlights that cooperatives may be a strong part of the social economy and care about the future. Mondragon invests EUR 350,000 to create one new job something which reflects on the seriousness of its commitment.

Following relating topics might be also interesting to follow:

• Financial participation schemes should be made part of the corporate social responsibility agenda.
• Should not financial participation schemes be made a part of social dialogue and collective bargaining at the decentralised level? The time may have come has come to add financial participation to the tripartite agenda as a policy tool and to discuss how its different forms may contribute to general economic and social goals.
• Examples of best practice should continue to be publicised, thus contributing to the greater dissemination of EFP schemes. Related activities should be supported by the EU budget through a dedicated budget heading.
• Information sources on the implications of EFP for businesses and employees as well as training and advisory services by impartial bodies, i.e. NGOs, should be established, via dedicated NGOs.
• It is important to remove the ideological barriers to the diffusion of PEPPER schemes, including also by facilitating the spread of general information about successful examples of actual implementation of financial participation. The EU could play an important role in this regard, by continuing to promote employee financial participation in the now enlarged EU, as a follow up of its earlier initiatives in this area, including through information to be provided to e.g. by informing governments and policy makers in the new Member States.

Yet, primarily we wish to concentrate on the above mentioned strategy to support EFP:

1. Focus on reducing the lack of information / Education.
2. Promotion of the positive experiences via case studies / Best practices.
3. Initiation of steps to conquer the ideological myth.
4. Identification of legislative obstacles & drafting of relevant legislative changes.