The EU’s souring relationship with the US is an opportunity social entrepreneurs must seize

After a year of backtracking on sustainability and progressive policies, is Brussels starting to get its mojo back? Since January 2025 and the re-election of one of the EU’s most vocal critics to the White House, the bloc’s policies have mirrored the global trend to move away from considerations of sustainability and inclusion – also having a negative impact on policies related to the social economy. Perhaps this was best shown by the axing of DG GROW’s social enterprise unit in a drive for ‘simplification’ and a refocusing of industrial policies towards tech innovation and rapid scaling. 

Among the shifts in geopolitical alliances and the eruption of unpredictable (trade) wars, silver linings are not easy to draw out. But with the souring relationship between the EU and the US, there may be a new opportunity for Brussels to assert itself once again as a ‘regulatory superpower’. Discussions of ambitious regulation are at the moment centred around tech companies and social media, but if the EU is willing to set its own course on regulating such immensely powerful multinational companies, perhaps this could reopen the door to more ambitious environmental and social regulation for businesses operating across the bloc in the future. 

There may be a new opportunity for Brussels to assert itself once again as a ‘regulatory superpower’

Reflecting on the more immediate future of the EU also highlights the more pressing conversations around its next multi-annual financial framework, or MFF (in layman’s terms: the EU’s next seven-year budget). The current MFF runs out in 2027 with a new budget needing to be adopted for 2028-34, which requires the agreement of EU Member States and the European Parliament. 

• Read more: Projects cancelled as EU scraps social economy unit in key department

Limited references to social economy funding

The European Commission presented an initial proposal in July 2025, outlining both a big increase in the EU budget as well as a major shake-up of the way funding programmes are structured. The proposal includes a strong emphasis on boosting Europe’s competitiveness – a word which seems set to stay in the Brussels jargon for some years to come – and more performance measures relating to funding delivery. This could see EU funding shift to a model where payments are conditional on results or pre-defined criteria indicating success. What these would be, however, remains unknown and the development of this framework is perhaps where the social economy’s lobbying attention should focus, to ensure that social and environmental criteria are included. 

It also proposed to merge some of the EU’s flagship funding programmes, doing away with staples such as the EU’s regional and cohesion funds. The Commission also proposed to re-structure not only the funding programmes but also the way funding decisions are taken, working through National and Regional Partnership Plans where national and regional authorities will play a much larger role in EU funding decisions. This mirrors the way Recovery and Resilience Facility Funds (EU money made available to member states after the Covid-19 pandemic to help with their economic recovery) were implemented. 

Advancing on recent achievements will require a renewed positioning of the social economy in the current global context

The wrangling is well and truly under way about almost all dimensions of this next EU budget but at present there are limited references to funding for the social economy or priorities such as social innovation. In the coming months, stakeholders from across Europe – be that networks, funding providers or individual businesses – should get in touch with their national authorities and members of the European Parliament to highlight the importance of earmarking funding to support the social economy. 

Without funding in the next EU budget, the progress made to support the development of social enterprises and the social economy could all too easily be lost amongst the series of rapidly emerging global crises. From the first recognition of social enterprises by the Social Business Initiative in 2011 to the Social Economy Action Plan in 2021 and the Council Recommendation on social economy framework conditions in 2023, maintaining or even advancing on recent achievements will require a renewed positioning of the social economy in the current global context. 

• Read more: Better support for regional policies and promotion of social procurement among EU commitments to grow social economy