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GREEK AND ITALIAN CO-OPERATIVE MOVEMENT: A BRIEF COMPARISON

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The present paper focuses on the co-operatives in two states of Southern Europe, Greece and Italy, both members of the European Union, and their evolution throughout the modern era. It tries to explain the role of the state with respect to the
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   1 MICHAEL FEFES LECTURER UNIVERSITY OF PELOPONNESE GREEK AND ITALIAN CO-OPERATIVE MOVEMENT: A BRIEF COMPARISON 1. INTRODUCTION Co-operatives are sui generis private enterprises. 1  They differ from the other common commercial legal entities, because they combine an economic and a social facet in their activities. They are bodies composed of natural persons or legal persons and pursue both economic and social aims. The private economic initiative is an element residing in their nature during the process of their business. On the other hand, the social element gives them the sui generis character. Their economic activity, entrepreneurial activity, organisation and management are purely internal matters of the co-operative. The state may encourage the co-operative movement at its very beginning and then foster it by securing a friendly environment for its growth and stability. The importance of the attitude of state for the stable and rational development of co-operatives is great. The provision of a legal framework, adapted to the nature of the enterprise, but similar to that of commercial companies giving useful guidelines to co-operatives, is of equal importance. As a principle the above remarks are generally accepted and reflected in the literature concerning co-operatives worldwide, taking as a necessary prerequisite that co-operatives always work within the framework of an open and fair market competition. It is also generally accepted that the essential nature of co-operatives is that they are created to serve the needs of their members and this is the reason we meet co-operative enterprises all over the world. Nevertheless, each country has developed its own co-operative entrepreneurial model according to the peculiarities of each particular state. The present paper will focus on the co-operatives in two states of Southern Europe, Greece and Italy, both members of the European Union, and their evolution throughout the modern era. We shall try to explain the role of the state with respect to the function of co-   1  The view that co-operatives are enterprises was followed by the then European Court of Justice (ECJ) in Case 61/80, Cooperatieve Stremsel-en Kleurselfabriek v. Commission [1981] ECR 851.   2 operatives and the role of the latter in the economic, political and social life of those countries, making the necessary comparisons between the two co-operative movements and pointing out the similarities and differences that finally led them to their contemporary situation. The reason for this is our belief that a brief analysis of the historical evolution of both co-operative movements in Greece and Italy will serve as an explanatory tool for the present situation in the co-operative sector of both member states and a reflection for co-operation between them. As regards the case of Greece, the paper will draw its attention on agricultural co-operatives, because they were the huge majority of the co-operatives formed during the past years. 2. GREEK CO-OPERATIVE MOVEMENT Dr Antoniou, one of the contributors of the present volume, describes traditional models of co-operation among professionals in Greece. Thus, one may wonder why farmers did not follow these patterns of co-operation, when the Modern Greek state was founded. Greece may be considered as  a country that presents the perfect model for the application of agricultural co-operative activities. Since the main structural problems in Greece were the small size of holdings, their territorial fragmentation and the multicultivation of crops, co-operation among farmers seemed necessary. Co-operatives could have played a vital and reviving role in the agricultural economy of the infant State. Nevertheless, for nearly eighty years (1827-1914) there were no co-operatives at all. The following analysis will be focused on the particular factors that influenced the Greek agricultural co-operative movement and led it to the structural deficiencies it suffers even nowadays. At first, during the Ottoman rule, Greek population, being in substantial cultural and economic isolation from the western world, was not able to come into contact with the other European countries and follow their evolution. 2  On the other hand, the War of Independence, which lasted nine years, left the country in ruins. The whole agricultural structure had been destroyed. 3  The agricultural economy was at a 2  See Χ . Zolotas, «  Αγροτική    Πολιτική » [ Agricultural Policy], Tzakas, Athens 1934, p. 19.   3  See Χ . Zolotas, «  Η     Ελλάς    εις    το    Στάδιον   της     Εκβιομηχανίσεως  » [ Greece in the Era of Industrialisation], Bank of Greece, Athens 1964, p. 23, and  Ν. Negreponti-Delivanis, Greece in Transition 1821-1971: Economic Aspects , ABSP, Thessaloniki 1979, p. 132.   3 primitive level. It is characteristic that the only tools at the disposal of the farmers were antiquated   4  Secondly, the basic prerequisite for the development of co-operatives, that is land ownership, did not exist, because the large volume of land belonged to the State and the Church. Experience shows that farmers who are independent owners of family farms come together easily to form various kinds of co-operatives, but peasants whose tenure is insecure are not likely to do so, or do so only with difficulty. Until thoroughgoing schemes of land reform are implemented, it is futile to organise a massive co-operative movement. 5  In Greece, the urgent need for land reform existed from the beginning. One may note that a final shape of a land reform scheme took shape and was implemented only in 1928. Thirdly, Greek governments, during the first fifty years of the new state, had no agricultural policy at all. Thus, no central planning existed for the development of the agricultural economy. There were no means of transport and no transport network, no agricultural insurance, credit and education, no land reform. 6  The Ministry of Agriculture was established only in 1917. Naturally, its establishment did not mean an automatic correction. It took several years before an elementary national agricultural policy could be planned. In conclusion, during the first century there was a haphazard agricultural evolution and the necessary infrastructure that could make co-operatives flourish was non-existent. 7  Fourthly, the absence of an agricultural credit institution left the farmers to fall victims of usury. 8  Though co-operative credit was very essential, the financing of the agricultural sector was very limited due to its particularities. The rarity of loans and their severe conditions turned farmers to seek recourse to usurers. No possibility of economic solidarity of co-operatives could exist under those circumstances. 4  Farmers used the ploughs that were in use during the Hesiodian era. See P. Papagaryfallou, «  Η εξέλιξις των γεωργικών συνεταιρισμών   εν Ελλάδι από της επαναστάσεως του 1821 μέχρι του 1940 » [ The Evolution of Agricultural Co-operatives From the Revolution of 1821 to 1940], Papazissis, Athens 1973, p. 35-36. 5  See A. Laidlaw,  Mobilisation of Human Resources for Rural Development through Agricultural Co-operatives , FAO, Rome 1973, p. 16-17. 6  See Α . Sideris, «  Η     Ελληνική    Αγροτική    Πολιτική   κατά   την   παρελθούσα    Εκατονταετηρίδα  (1833-1933) » [Greek Agricultural Policy during the Past One Hundred Years (1833-1933)], K. Papadoyiannis, Athens 1934, p. 58.   7  See Papagaryfallou, op. cit, p. 57-58. 8  See Κ. Tsoukalas, «  Εξάρτηση   και αναπαραγωγή. Ο κοινωνικός ρόλος των εκπαιδευτικών μηχανισμών στην Ελλάδα (1830 -1922)  [Dependence and Reproduction. The Social Role of Educational Apparatus in Greece], Themelio, Athens 1987, p. 93.   4 Finally, since the co-operative is a complicated form of organisation, its establishment and administration demand specific knowledge of co-operative affairs as well as knowledge of agricultural matters generally. However, most of the Greek farming population was completely illiterate. On the other hand, the State showed no interest in their agricultural training, save a few sporadic attempts. The most serious one was in 1829, when President I. Capodistrias founded the Agricultural School of Tiryns. The School closed down in 1872 due to the complete curtailment of funds by the Greek Government. The shortage of educated people was shocking in the agricultural sector. In 1898 there were 38 agronomists and till 1865 not even one veterinarian. 9  Consequently, the essential requirements for the success of the co-operative movement in Greece were missing during the first 80 years of its modern history. Having to face utmost poverty, Greeks could not think of a superior way of economic activity, but were too absorbed in the day-to-day struggle for survival. The first co-operative created in Greece was the agricultural co-operative of Almyros, a village near Volos, Thessaly, in 1900. This event is presumed to be the beginning of Greek co-operative history. Additionally, a very significant event was the adoption of Law 602/1915, which provided for a general legal framework for the organisation of all kinds of co-operatives. It followed the internationally accepted co-operative principles and was quite progressive and radical for its day. It is important to underline that Law 602/1915 remained valid as the basic co-operative law till 1979. The law seems to have given farmers the necessary impetus. While before its adoption there were only 150 co-operatives, their number increased to 5,186 till 1939. The predominant co-operative form was the credit one. 10  Law 902/1915, if applied properly, could be a valuable tool for the advance of co-operatives in Greece. Unfortunately, co-operatives failed for many reasons that Prof. Papageorgiou, a contributor of this volume, explains in detail, so there is no need to repeat them here. It suffices to note that the main reasons were the weakening and falsification of the legal and institutional framework of co-operatives, the interference of the state in co-operative affairs, the legal prohibition of a real credit policy by co-operatives after the creation of the Agricultural Bank of Greece (ABG) 9  See Papagaryfalou, op. cit, p. 50-57. 10  A thorough analysis is found in Α . Klimis, « Οι    Συνεταιρισμοί    στην    Ελλάδα » [ Co-operatives in Greece], Pitsilos, Athens 1985, p. 277-292.   5 and the total indifference of the state toward the establishment of a sound agricultural co-operative education and training for farmers. On the other hand, it is known that the rural community tends to be conservative. It leans heavily on precedent and tradition, and change does not take place readily. A great deal of persuasion is needed for the rural population to adopt new ideas. Combining all these factors, one can understand why Greek farmers adopted a hesitant at first and negative afterwards attitude towards the co-operative organisation. The obvious advantages that co-operatives presented were curtailed by the destructive intervention of the state. 11  To quote Laidlaw “... as long as government policy allows party supporters to intervene freely in the affairs of co-operatives and to manipulate committee members and employees for political ends, there cannot and never will be a genuine co-operative movement making its unique contribution to economic and social development”. 12  The best example for this is Law 1541/85, a measure that was supposed to raise high expectations and hopes for the development of co-operatives. Unfortunately, it included several legal deficiencies and other subtle provisions that worked at the expense of co-operatives. Prof. Papageorgiou sheds light on the case, however, as a reminder, I have to insist here on some purely legal issues. First, the law infringed the “open door” co -operative principle, it did not respect the freedom to form and become member of a co-operative. Article 4 prohibited the formation of a second co-operative in a place where another co-operative already existed. The same prohibition applied for the formation of  a second union of co-operatives in one prefecture. The intention was to limit the fragmentation of the co-operative movement. It violated, nevertheless, a basic principle of co-operation. It compelled a farmer to become member of a specific co-operative. Thus, there was apparently no freedom of choice. Secondly, the law infringed the principle of equality among partners. Article 8 distinguished between regular and special members of a co-operative. Regular members had full rights and obligations. A special member had the same obligations but not the right to be elected in management or supervisory boards of a co-operative. A special member could take part in general meetings, but only the presence of 11  See P. Kolyris, «  Συνεταιρισμοί    και    Κράτος  : Θεωρία   και    Ιστορική    Εμπειρία » [ Co-operatives and State: Theory and Historical Experience],  Agricultural Sector Current Anticipation , p. 51-67. 12  See Kolyris, ο p. cit, p. 25.
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