By Kosta Marco Juri
Origins, purpose and functioning of the Marcora law
Italy boasts a long and rich cooperative tradition, something which is reflected not only in the size and scope of the country’s cooperative sector, but also in special laws which actively encourage the establishment of new worker-owned enterprises.
A prime example of one such law is the Italian 49/1985 law, also known as Marcora. Adopted in 1985 and named after its first signatory – the former minister of industry Giovanni Marcora –, the law estabished an institutional framework which provides workers of companies facing closure with the financial and technical assistance needed to buy out the companies’ assets and establish a new worker cooperative. This way, jobs and the companies’ healthy cores are saved, and workplaces are democratised.
One of the most fascinating aspects of the Marcora law is the creative way in which it helps workers obtain the capital they need to finance a workers’ buyout (WBO). Besides providing them with low-interest loans and equity capital via Cooperazione Finanza Impresa (CFI) – the state-funded institutional investor tasked with supporting WBOs –, the Marcora framework gives workers of companies facing closure the option to use would-be future unemployment benefits in a lump sum to finance a WBO and keep production going.
What makes the Marcora law so effective?
The law shows its true potential when it’s most needed, namely in times of crisis. In fact, since an increase in the number of company failures is matched by an increase in WBOs, the law acts countercyclically. Worker buyouts also have a very high success rate. This is because workers tend to attempt a buyout only when they are very confident about their chances of succeeding. Moreover, before giving the green light to proceed with an WBO, CFI carries out a careful assessment of the company’s ability to stay in business.
The numbers speak for themselves. By 2015, only 12% of the WBOs which were established after 2009 had failed, which indicates very high survival rates. Normally, CFI-financed WBOs also witness a steep increase in generated revenue. For instance, companies which underwent a WBO between 2012 and 2019 have more than doubled their revenue after becoming worker owned.
Besides benefitting workers and local communities, Marcora is also a valuable source of revenue for the state. According to CFI, Marcora has generated a return on investment for the State of roughly 800% in the period between 2008 and 2017.
Today’s uncertain economic climate calls for innovative solutions that will encourage socially and environmentally responsible business practices and anchor wealth in local communities. With this in mind, we are calling for the Slovenian government to pass the Marcora-inspired law we developed at our institute, which would finally provide workers of businesses facing closure with the support necessary to save their jobs and truly become “their own bosses”.