The social economy and rural development: how EU policies make a difference
- Rural Pact
- Rural Revitalisation Platform
- Prosperous rural areas
- Social economy
- Entrepreneurship
- Employment
The social economy is a vital part of rural life, helping communities face challenges from demographic decline to lack of services and opportunities. This article looks at the progress so far with implementing the EU’s social economy action plan, Rural Pact members’ contribution to its mid-term review, and what’s in store for the next phase.
Image by Roberta SA. from Canva Creative Studio
Nearly a third of the EU's population lives in rural areas and these communities face growing challenges, from population decline and ageing to fewer services and fewer opportunities for young people, while in some areas housing costs can be high.
The social economy – cooperatives, mutual benefit societies (‘mutuals’), associations, foundations and social enterprises – has long provided practical solutions to these challenges. Across the EU, the social economy includes more than 4.3 million organisations and employs around 11.5 million people.
It brings together entities that prioritise social and environmental objectives over profit and operate according to democratic or participatory governance principles. In the countryside, these organisations keep local shops and care services running, shorten supply chains and create jobs for young people in farming, food, tourism and community energy.
Taking stock: the social economy action plan mid-term review
To unlock the full potential of the social economy, the European Commission adopted its social economy action plan (SEAP) in December 2021, setting out more than 60 actions to be delivered by 2030. A mid-term review of progress, published in March 2026, found the SEAP had already delivered significant results but that untapped potential remains at regional and municipal levels.
The review also set out a number of new actions, bringing the total to 89. To provide an overview of implementation, the Commission launched the SEAP progress tracker, showing the headway made on the plan's priorities and key action areas.
Implementation has taken place against a backdrop of growing public recognition of the social economy. A Special Eurobarometer survey published in October 2025 revealed that half of Europeans had engaged with social economy organisations during the previous five years and 75% considered the social economy to be important for society.
According to stakeholders, one of the SEAP’s most significant achievements is the 2023 Council recommendation on developing social economy framework conditions. It expresses Member States’ political commitment to strengthen and promote the social economy based on this common policy reference and to devise or update national strategies supporting the social economy.
An operational roadmap for 2026-2030
The mid-term review marks an important shift in emphasis. While the social economy action plan established the strategic framework, the next phase focuses on implementation, supporting Member States, regions and local authorities in translating policy commitments into concrete action.
This approach is closely aligned with the 2023 Council recommendation, which encourages Member States to strengthen the social economy’s contribution to territorial cohesion, including in rural and remote areas. It also complements the ongoing implementation of the long-term vision for rural areas and the future updated EU rural action plan.
The roadmap for 2026-2030 is organised around five priorities:
- strengthening multi-level governance and implementation capacity;
- improving regulatory and policy frameworks, including State aid, public procurement and taxation;
- reinforcing the social investment ecosystem through public and private finance;
- developing skills, entrepreneurship and quality jobs;
- strengthening the evidence base through better data, monitoring and knowledge.
Several of these priorities will be supported by practical tools that could be particularly relevant for rural communities. The Commission is preparing a toolkit to support regional and local social economy policies, providing practical guidance for public authorities wishing to develop place-based social economy ecosystems.
The Commission also supports sector-specific initiatives. For example, the pilot project Smart Social Economy Model in Tourism: Long Distance Trails supports community-led tourism models that strengthen local value chains, promote social inclusion and generate lasting benefits for local communities, including in rural areas.
Access to finance also remains a priority. Many rural social economy organisations operate on a small scale and require relatively modest investments that are often difficult to access through conventional financial instruments.
To address this gap, the Commission is launching new actions, including an ESF+ call on inclusive incubation and finance, which will support incubation models and improve access to finance for under-represented entrepreneurs while strengthening links with microfinance and social investment providers.
This complements existing EU instruments, including InvestEU guarantees and the Social Inclusive Finance Technical Assistance programme (SIFTA), which together contribute to a more accessible financial ecosystem for cooperatives, social enterprises and other social economy entities, including those operating in rural areas.
- For more information about funding opportunities, see the funding section of the EU Social Economy Gateway.
The Rural Pact as a source of policy feedback
The preparation of the SEAP mid-term review also marked an important step in the evolution of the Rural Pact. For the first time, a Rural Pact Community Group acted as a targeted consultation mechanism to provide evidence and policy recommendations for a specific EU policy file.
In October 2025, members of the Social Economy Community Group shared their insights and recommendations in an online consultation, contributing to the SEAP’s mid-term review and the rural action plan update.
They highlighted the need to:
- better integrate the social economy into rural development policies, including the common agricultural policy, cohesion policy, LEADER and Community-led Local Development;
- recognise the cross-sectoral contribution of the social economy;
- simplify access to funding and promote impact-oriented support;
- encourage experimentation, peer learning and innovation;
- strengthen the Rural Pact governance framework across Member States.
Beyond the specific recommendations, this experience demonstrated how the Rural Pact can support more participatory and evidence-informed policymaking by creating a structured dialogue between rural stakeholders and the European Commission. It also confirmed the growing recognition of the social economy as an important contributor to the long-term development and resilience of rural areas.
For further details, visit the EU Social Economy Gateway.
Find out more about the social economy’s contribution to European competitiveness and prosperity in a flagship publication from the European Commission and OECD.
Explore the latest Rural Pact resources on the social economy and join the dedicated Community Group to connect and exchange with peers.
Author: Directorate-General for Employment, Social Affairs and Inclusion, Unit G.3 – Social and Inclusive Entrepreneurship, European Commission