Spanish Congress Approves 2025 Social Economy Law Amidst Political Polarization
Spain’s Congress passes the 2025 Social Economy Law to modernize cooperative regulations and boost social enterprises, despite opposition from PP and Vox.
- • Spanish Congress approved the 2025 Social Economy Law and sent it to the Senate.
- • The law strengthens social economy enterprises, contributing 10% to GDP and 2 million jobs.
- • PP and Vox opposed the law citing exclusion of private entrepreneurship.
- • It raises public procurement reserved for social economy from 10% to 15%.
- • The law modernizes cooperative regulations and expands tax benefits for housing cooperatives.
Key details
On December 9, 2025, Spain's Congress approved the comprehensive Law for the Promotion of the Social Economy and sent it to the Senate for further consideration. The law, which revises and unifies prior legislation on cooperatives, insertion companies, and social economy entities, garnered support from the governing PSOE, Sumar, Junts, ERC, PNV, BNG, and Podemos, while meeting opposition from the Popular Party (PP) and Vox.
The legislation aims to strengthen social economy enterprises, which contribute about 10% of Spain's GDP and provide two million jobs. It raises the reserved public procurement quota for social economy companies from 10% to 15% and introduces mechanisms to modernize cooperatives by adapting to new technologies and enhancing equality plans tailored to their characteristics. It further expands the definition of vulnerable groups eligible for insertion contracts, explicitly including the Roma population and individuals in regularization processes.
Significantly, the law extends tax benefits under the Cooperative Tax Regime to housing cooperatives operating under a use transfer model, provided they maintain non-profit objectives and restrict profit distribution. This inclusion was driven by Junts, which secured concessions ensuring Catalonia's competencies in social economy management.
The reform aligns with the European Action Plan for the Social Economy, aiming to bolster the social impact of organizations beyond mere job creation. It also establishes a new Equality Commission to oversee cooperative equality plans. The law defines Social Economy Special Employment Centers to exclude private profit-driven initiatives, resonating with CERMI's support emphasizing the law's modernization of disability entrepreneurship frameworks.
Though the law passed with relatively few alterations, the government faced one voting defeat due to two PP amendments allowing companies to delineate integration routes and present claims during insertion company qualification. Additionally, a vote irregularity involving a PP deputy required a re-vote to secure final passage.
Labor Minister Yolanda Díaz hailed the approval as a milestone that promotes inclusivity, fair trade, housing, and energy community initiatives within the social economy. While the law advances to the Senate, the PP has indicated possible opposition that could necessitate further Congressional consideration. The ongoing legislative process underscores the political contention surrounding Spain's drive to formalize and expand its social economy sector.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
