Who owns Europe?

Who owns Europe?

...and why it matters for progressives

Published by:

FEPS ? Foundation for European Progressive Studies Rue Montoyer 40 -- 1000 Brussels, Belgium

Mutuo PO Box 71312, London, UK, SE17 9DL

Written by Cliff Mills, Sean Kippin, Peter Hunt and Mark Willetts Additional research by Alexander Byrganov, Edd Morris Edited by Peter Hunt and Mark Willetts

Copy editing by Julie Wilson

Page layout by Mladen Yuliyanov

ISBN: 978-2-930769-31-8 9782930769318

This book is produced with the financial support of the European Parliament

Contents

Preface ..........................................................................................................................................................................................5

PART 1 Understanding ownership.................................................................................................................15

1.1

Why we need to talk about ownership................................................................................................16

1.2

What is ownership?..........................................................................................................................................17

1.3

The emergence of companies and corporate ownership.......................................................18

1.4

Ownership by nations.....................................................................................................................................19

1.5

Philanthropic ownership...............................................................................................................................21

1.6

Mutual ownership.............................................................................................................................................22

PART 2 Ownership in focus...................................................................................................................................25

2.1

Land ownership..................................................................................................................................................26

2.2

State ownership..................................................................................................................................................34

2.3

Owning Europe's utilities .............................................................................................................................37

2.4

Foreign ownership............................................................................................................................................43

2.5

The ownership of wealth..............................................................................................................................45

PART 3 Understanding corporate ownership.....................................................................................47

3.1

Corporations and ownership.....................................................................................................................49

3.2

The corporate landscape ? a purpose-based approach...........................................................49

3.3

Business for private benefit.........................................................................................................................51

3.4

Business for public benefit...........................................................................................................................53

3.5

Community ownership..................................................................................................................................54

3.6

Custodian-owned bodies.............................................................................................................................55

Contents 3

PART 4 Does corporate ownership work?...............................................................................................59

4.1

Governance...........................................................................................................................................................60

4.2

Efficiency and success....................................................................................................................................61

4.3

Motivation and drivers of success...........................................................................................................62

4.4

Private benefit corporations.......................................................................................................................63

4.5

Public benefit corporations.........................................................................................................................66

4.6

Custodian ownership by the state..........................................................................................................69

4.7

Philanthropic ownership...............................................................................................................................71

PART 5 Ownership by the people, for the people..........................................................................73

5.1

Focus on co-operative and mutual ownership..............................................................................74

5.2

Co-operative capital.........................................................................................................................................79

5.3

Preserving reserves for their intended purpose.............................................................................81

(Indivisible reserves in co-operatives in EU member States)

PART 6 Why ownership matters to progressives.............................................................................89

6.1

The Ownership Agenda in European Social Democracy..........................................................90

6.2

The Progressive Response............................................................................................................................98

6.3

Policy actions Progressives should take on ownership...........................................................102

Appendices Appendix 1 - Co-operatives: Sources of capital. A case study from the UK....................................109 Appendix 2 - Summary of EU member states' approach to indivisible reserves..........................123 Annex 1 ....................................................................................................................................................................................146 Annex 2 ....................................................................................................................................................................................147 Annex 3 ....................................................................................................................................................................................148 Annex 4 ....................................................................................................................................................................................154 Annex 5 ....................................................................................................................................................................................155 Appendix 3 ? About us.....................................................................................................................................................170

Acknowledgements....................................................................................................................................................172

4 Contents

Preface

Ownership matters. Owners of businesses set their strategic direction, purpose and the terms of employment. Owners of land decide what should be done with it and who can access it. Owners of property decide how it is deployed and who can enjoy its benefits.

These decisions have a profound impact on the rest of European economy and society. Too often when we try to understand who owns the assets on which we all rely, the beneficial owners are obscured, and capital is controlled by owners whose interests are divergent from the citizenry at large.

Politicians rarely consider questions of ownership when making policy, but the frameworks that they establish for market economies have a profound effect on the levels of corporate plurality in business, and ultimately the outcomes for citizens.

Progressives must offer a thoughtful critique which ensures that the benefits of ownership are not concentrated in the hands of the few. Policy should facilitate a fair ownership opportunity for all.

This project seeks to examine ownership across the EU, it considers how Europe's businesses are owned and where the benefits of business flow. It looks closely at different types of ownership model, for example - the joint-stock company, the private business, the partnership model and the mutually-owned enterprise.

At the same time, it is concerned with ownership more widely. Who owns the land on which our produce is grown, the apartment blocks in which we live and the institutions in which we store our earnings?

We have examined whether some forms of ownership are more conducive to the public good and to what extent public goals can be discharged by a wider range of ownership types.

Ownership in the public interest can be achieved, but it requires a consistent approach across EU member states, with policy, legislative and regulatory frameworks that support and protect ownership that is designed for a common purpose, rather than simply focussed on maximising private profit.

This report makes a series of recommendations which seek to ensure strong economies which are purposeful and successful, but which also benefit the wider public good.

Preface 5

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