A Review of German Co-operative Legislation with Special Emphasis on Co-operative Groups

Abstract

In this paper the author investigates, what are the reasonable limits set by co-operative legislation to preserve the special character of co-operatives on the one hand and to allow co-operatives to adjust to presumed and real needs of the global markets on the other, using the German case as an example. The analysis is done in three steps: ① The autonomy of co-operatives to co-operate, federate or network is described as a matter of freedom of association more than of co-operative legislation. ② A closer look is taken at the tool box developed for co-operation among enterprises; general as well as legal issues related to practical use of these tools by co-operatives and their federations are discussed. ③The author comes to the conclusion that not all forms of economic co-operation designed by investor-led organizations are in conformity with the special character of co-operatives. It is argued that co-operatives cannot strengthen their position in the market by leveling or even eliminating their unique profile and their internal propelling forces, namely member- commitment and member-support. By developing a standard company style business model and by abandoning the co-operative model, such co-operative enterprises endanger their innate purpose and demodulates assets accumulated by generations of members. They may possibly survive as employee enterprises but not as a co-operatives.