Important legal notice

61988C0167

European Court reports 1989 Page 01653 Swedish special edition Page 00055 Finnish special edition Page 00067

Opinion of the Advocate-General

Mr President, Members of the Court, 1 . In this case, the French Conseil d' État ( State Council ) has referred to the Court for a preliminary ruling a question on the validity of four agricultural regulations concerning the cereals sector .

For the details of the legislation at issue reference may be made to the Report for the Hearing . I shall simply point out here that Regulation No 400/86 provided for the application of a special intervention measure consisting in the purchase by the national intervention agencies, at a price corresponding to the intervention price for the 1985/86 marketing year plus 5%, of a limited quantity of common wheat of breadmaking quality apportioned as follows among the Member States :

Germany:...................................1 000 000 tonnes France:......................................200 000 tonnes United Kingdom :.............................. 50 000 tonnes Italy:........................................50 000 tonnes Denmark:......................................50 000 tonnes Belgium:......................................50 000 tonnes Netherlands:..................................50 000 tonnes Greece:.......................................50 000 tonnes Luxembourg:....................................2 000 tonnes Under Article 3 of the regulation, if the total quantity offered in a Member State exceeds the limit laid down that Member State must fix the percentage by which offers made are to be reduced .

The special intervention measure provided for in Regulation No 400/86 is based primarily on Article 8(2 ) of Regulation No 2727/75 of the Council on the common organization of the market in cereals, as amended by Council Regulation No 1143/76 .

The measure is also based on Commission Regulation No 1629/77 laying down detailed rules of application for special intervention measures to support the development of the market in common wheat of breadmaking quality, adopted pursuant to Article 8(4 ) of Regulation No 2727/75 . Article 2 of Regulation No 1629/77 provides that the measures in question are to be decided upon in the light of the following criteria :

"the situation and the prospects regarding the availabilities of cereals on the Community market, the import prospects for cereals and the export prospects for common wheat, the trend in the price quotations of common wheat of breadmaking quality at the most representative centres in the Community ".

2 . Following the adoption of Regulation No 400/86, the French intervention agency, ONIC, was offered a total quantity of wheat ( 1 699 740 tonnes ) considerably in excess of the limit laid down, namely 200 000 tonnes . Consequently, under Article 3 of that regulation ONIC decided to reduce the offers made to it by 88.23 %.

The Association générale des producteurs de blé ( general association of wheat and other cereal producers ) ( hereinafter referred to as "the Association ") brought an action against that decision before the Conseil d' État, which, since it considered that the lawfulness of the contested measure necessarily depended on the validity of the Community regulation which it applied, decided to stay proceedings and refer the following question to the Court for a preliminary ruling :

"Are Commission Regulation No 400/86 of 21 February 1986, Council Regulation No 2727/75 of 29 October 1975, Council Regulation No 1146/76 of 17 May 1976 and Commission Regulation No 1629/77 of 20 July 1977 contrary to the provisions of Articles 7, 40(3 ) and 190 of the EEC Treaty?"

In order to reply to the national court, it is necessary to consider the following points :

( a ) Did the Commission have the power to adopt special intervention measures on a regional basis, that is to say with different effects in each Member State?

( b ) If it did, are the Council regulations conferring that power on the Commission ( Regulations Nos 2727/75 and 1146/76 ) valid?

( c ) Is the special measure in issue discriminatory?

( d ) Is the statement of the reasons on which the regulation containing that measure is based adequate?

( a ) The Commission' s alleged lack of powers

3 . The plaintiff in the main proceedings, the Association, alleges that Regulation No 2727/75, as amended by Regulation No 1143/76, does not permit the Commission to adopt special intervention measures whose effects vary according to region .

In support of that argument, it refers to the difference between the terms of the first and second paragraphs of Article 8 of the abovementioned regulation . Article 8(1 ) provides as follows :

"To avoid substantial purchases having to be made in certain regions of the Community under Article 7(1 ), it may be decided that the intervention agencies take particular intervention measures ."

The nature and purpose of such measures are set out in the eighth recital in the preamble to Regulation No 1143/76, which reads as follows :

"... in certain regions of the Community, particular circumstances may temporarily cause market prices to follow a trend other than in the rest of the Community; ... to avoid large-scale intervention in such regions, it should be possible to take, by way of prevention, particular intervention measures to relieve their markets for a given period ".

Article 8(2 ), on the other hand, provides as follows :

"Where necessitated by the situation on the Community market in common wheat of breadmaking quality, special intervention measures may be adopted in respect of this cereal with a view to supporting the development of the market therein in relation to the reference price ..."

The eighth recital, mentioned above, is in similar terms :

"... it should also be possible to take special intervention measures for common wheat of breadmaking quality where there is a risk that market prices no longer develop normally in relation to the level of the reference price ".

According to the Association, those provisions show that the Council gave the Commission power to adopt measures with different effect in different regions only in the case of particular intervention measures . In the case of special measures, on the other hand, in respect of which the regulation does not expressly provide for regional differences, such differences must be regarded as implicitly prohibited . In other words, the Association' s argument is based on the assumption that when it was intended in the regulation in question to authorize the Commission to adopt different measures for different regions, that was done expressly . Conversely, where the regulation makes no provision for them, regional differences must be regarded as prohibited : ubi lex tacuit noluit .

4 . It is therefore necessary essentially to consider whether or not, having regard to the fact that Article 8(2 ) of Regulation No 2727/75 is silent on the matter, the adoption of special intervention measures comes within the scope of the implementing powers conferred by the Council on the Commission .

In that regard I should state first that I do not regard the argument based on a literal interpretation as being of decisive importance if account is taken of the fact that particular measures are of their very nature specific as to place . It is thus understandable that in regard to such measures the provision should refer to situations which may arise in certain areas of the Community, not for the specific purpose of defining the territorial limits on the exercise of the Commission' s powers but simply in order to describe the measure under discussion . That can be seen clearly from Article 8(1 ), read in the light of the eighth recital in the preamble to the regulation .

On the other hand, as the Court has consistently held ( see, most recently, the judgment of 11 March 1987 in Joined Cases 279, 280, 285 and 286/84 Rau v Commission (( 1987 )) ECR 1069, at paragraph 14 ):

"the concept of implementation must be given a wide interpretation . Since only the Commission is in a position to keep track of agricultural market trends and to act quickly when necessary, the Council may confer on it wide powers of discretion and action in that sphere, and when it does so the limits of those powers must be determined in the light of the essential general aims of the market organization ".

In the light of those decisions, I think that the literal interpretation put forward by the Association, which leads to a restrictive interpretation of the implementing powers conferred on the Commission by Article 8(2 ), is not consistent with the grant of potentially wide powers, the principle underlying the division of executive powers in the context of the agricultural policy, which corresponds to the clear need to ensure flexible and effective management of the common market organization .

That is all the more true since, on a correct view of the situation, this case is not so much concerned with deciding whether the Commission has a specific power ( for example, as in Rau, the power to carry out direct sales at reduced prices of butter held in intervention stocks ) as with verifying whether the Commission may decide, on the basis of an assessment of economic circumstances, on the most appropriate way of exercising a power which has undoubtedly been granted to it ( in this case, that of adopting a special intervention measure ).

In this case, therefore, I do not believe that any decisive factor indicating that the Commission did not have the power to adopt special intervention measures with varying effects according to region can be inferred from the mere fact that the terms of Article 8(2 ) of the regulation do not contain a specific authorization to do so . On the contrary, since the measure is silent on that point it must be considered, in accordance with the decisions of the Court mentioned above, that in the absence of an express restriction the measure itself does not prohibit a special measure involving geographical differentiation .

That also appears to be confirmed by the fact that, as in the case of other measures in the context of other market organizations, Article 8(4 ) gives the Commission a wide discretion in regard to implementation, although it must be exercised in accordance with the management committee procedure . In this case that procedure was in fact followed, since the Commission duly adopted the contested measures only after having referred them to the management committee and after that committee failed to give an opinion .

Finally, it should be noted that the Council, which adopted Regulation No 2727/75, has essentially confirmed, notwithstanding a certain hesitation, that the terms of Article 8(2 ) do not exclude the adoption of special measures differing from region to region .

5 . It remains instead to be considered whether, in accordance with the logic of the abovementioned judgment in Rau, limits are to be inferred from the objectives pursued by the regulation, rather than the letter of Article 8 .

In that connection it must be emphasized that Regulation No 1143/76, amending Regulation No 2727/75, completed the reform of the common organization of the market in cereals by setting up a system characterized by :

the abolition of regional differences in the intervention price for common wheat; the unification of the intervention price for cereals in the entire Community; enhanced unity of the market ( in the sense that the level of external protection was increased by introducing an additional factor in the calculation of the target price, so as to ensure a sufficient margin to ensure market fluidity and make it possible for the flow of trade to produce a balance between excess production in surplus areas and shortages in deficit areas ) incentives for the production of common wheat of breadmaking quality through the introduction of a single reference price higher than the intervention price . ( 1 )

The question which may be asked is the following : are special intervention measures varying from region to region, such as those contained in Regulation No 400/68, not likely to endanger the implementation of the principles of unified prices, a unified market and support for the price of common wheat of breadmaking quality in relation to the reference price?

In fact, it may be observed that a special purchase into intervention, limited in quantity and unequally divided among the Member States, amounts essentially to support and, therefore, to a distribution of additional income which does not correspond in equal measure to the production of each Member State . That is what happened in this case, where the quantity of common wheat of breadmaking quality accepted under the special measure in the Federal Republic of Germany was significantly higher than that purchased in the other Member States, particularly France, although its total production of cereals was at that time approximately three times that of Germany .

However, that argument is not convincing . Special intervention measures are intended to support the price of common wheat of breadmaking quality in relation to the single reference price . Inasmuch as such a measure must be adapted to what is strictly necessary ( see the fifth recital in the preamble to Regulation No 1143/76 ), the Commission may, rather than buying "à guichet ouvert" ( that is to say, without limit as to quantity ), provide for limited purchases below a certain ceiling . In those circumstances, it is normal that the total quantity should be divided in differing proportions among the Member States . The market situations differ by virtue of the influence of various factors, such as the volume of production, the yield of the areas under cultivation, production costs and the availability of outlets, and therefore the need for support also varies . It is precisely in relation to the need for support that special measures to maintain the single reference price must be adapted, so that intervention must be more energetic where the market is more depressed; obviously, if intervention does not distinguish between different economic situations, the measures will be "unbalanced" and ultimately distortive .

Consequently, when a special measure consists in the possibility of buying limited quantities into intervention, apportionment of the total quota in a manner varying according to regional requirements ( obviously on the basis of objective criteria ) is an appropriate way of attaining the objective of supporting the single Community reference price . Once such an objective has been attained and prices have returned to the desired level ( taking account of the reference price ), the normal patterns of trade will correct the imbalance between surplus areas and deficit areas in accordance with the mechanisms of the single market .

I therefore consider that in the light of the provisions of Regulation No 2727/75, as amended by Regulation No 1143/76, including those provisions dealing with procedural matters, and of the objective which the regulation seeks to achieve, the Commission had the power to adopt the special intervention measure at issue in this case .

( b ) The validity of Regulation No 2727/75 of the Council, as amended by Council Regulations Nos 1143 and 1146/76

6 . The national court has asked the Court of Justice whether the abovementioned measures are valid if it considers that they authorize the Commission to adopt special measures varying from region to region .

It must be pointed out first of all that, as can be seen from the foregoing considerations, the Council regulation which confers on the Commission the power to adopt special intervention measures is Regulation No 2727/75 ( in particular Article 8 ).

The sole issue is the validity of that regulation as a basic measure .

No question can be raised, on the other hand, as to the validity of Regulation No 1146/76 . That regulation has no effect on the powers at issue and merely regulates other aspects concerning the implementation of special and particular measures, such as, in particular, the arrangements for returning cereals to the market .

7 . It can be seen from the observations made in section ( a ) above that the possibility of adopting special intervention measures varying from region to region is objectively justified by the need to restrict the measure itself to what is strictly necessary, having regard to the situation on the various markets, and to support the price of common wheat of breadmaking quality in relation to the single reference price .

Moreover, in the judgment of 1 July 1974 in Case 11/74 Union des Minotiers de la Champagne v France (( 1974 )) ECR 877, the Court recognized that the system of regional prices for cereals applied before the reform of 1975 was not discriminatory inasmuch as it was based on objective criteria. That system provided for the fixing of intervention prices for each area of production, which led to stable differences in the prices themselves from one region to another. It was therefore a system in which elements of regionalization were much more pronounced than under the system provided for in Regulation No 2727/75, which, unlike the previous system, is based on the principle of both a single intervention price and a single reference price, and provides for regionalization, on the basis of objective criteria, exclusively in regard to specific possibilities such as particular and special intervention measures. The solution adopted by the Court in the abovementioned judgment thus appears to me to apply a fortiori in this case.

Provision for special measures, if necessary regionalized, is therefore not in conflict with the prohibition of discrimination and clearly has a basis inasmuch as the possibility of regional differences is based, as has been seen, precisely on the objectives of the regulation as set out in its preamble.

( c ) The discriminatory character of Regulation No 400/86

In that regard it should be pointed out that according to the settled case-law of the Court ( see, most recently, Rau, cited above, and the judgment of 17 June 1987 in Joined Cases 424 and 425/85 Frico v Voedselvoorzienings In - en Verkoopbureau ( 1987 ) ECR 2755 ) the prohibition of discrimination expressed in the second subparagraph of Article 40(3 ) of the EEC Treaty, as a specific enunciation of the general principle of equality, does not prevent like situations from being treated differently where such treatment is objectively justified.

In this case, the Commission argued that the difference of treatment in question was based on consideration of the following factors:

from September 1985 to January 1986 the relationship between the market price and the intervention price in France was approximately 1% higher than the same relationship in Germany;

in the same period, French exports showed a particularly favourable trend;

in January 1986 the French authorities indicated their intention to dispose of part of the stocks held by the intervention agency.

Those facts were not contested. However, the Association considers that their importance was overestimated, which led to the adoption of a measure which did not reflect the requirements of the market and placed French producers at a disadvantage.

In this case, the essential factor which the Commission took into account in adopting the measure at issue was the difference in the price index between the German market and the French market. It is common ground that that difference was small but it is nevertheless a fact which demonstrates the existence of slightly stronger demand on the French market. Furthermore, the Court has no evidence indicating that the Commission overestimated that difference in apportioning the special intervention quotas between the two countries. It can be seen from earlier practice that in one case, in 1980, ( 2 ) in regard to a price difference of approximately the same order of importance, the Commission adopted a measure analogous to that at issue here in dividing proportionally between the two countries the quantities covered by the special intervention measure. On the other hand, in 1983, ( 3 ) at a time when the French price was 1% above the German price, the special intervention quota granted to France was none the less higher than that granted to Germany, which seems to be in contrast with the assessment made in this case.

However, it cannot be denied that those measures were adopted in different economic contexts, which may explain the fact that the solutions adopted are not perfectly uniform from one case to the next. Furthermore, that does not permit the inference that in the case now before the Court the data concerning prices were wrongly assessed, giving rise to the adoption of unjustified measures. That is all the more true inasmuch as in this case the indication resulting from the prices factor was, as has been seen, confirmed by the favourable forecasts of the French authorities in regard to the capacity of the national market to absorb existing stocks. ( 4 )

10. It is true that following the adoption of Regulation No 400/86 German prices rose further while French prices declined steadily to a level below the intervention price. Moreover, the proportion of wheat in respect of which the benefit of the special intervention measure was sought and obtained in the Federal Republic, approximately 97%, was much higher than that in France, where only 11.7% of the wheat offered was accepted.

We are of course dealing with factors related to the effect of the measure, which therefore emerged only subsequently but are not for that reason without value or significance. In fact, they are factors in the nature of forecasts and subject as such to a margin of uncertainty, but which the Commission could not reasonably exclude from its own assessments, particularly since in this case it was specifically required to take account of them, especially with regard to price trends, under the clear provisions of Article 2 of Regulation No 1629/77.

None the less, by their very nature such factors, for the purposes of judicial review, constitute mere indications which acquire probative force only if they form part of an overall pattern of evidence which is sufficiently detailed and conclusive. In this case, as has been seen, it does not appear that the Commission was wrong in its assessment of market trends before the adoption of the regulation. Furthermore, the subsequent developments could well have been influenced by new circumstances which arose and were difficult to analyse in advance. Under those circumstances, I consider that the trend in prices and the conduct of traders in France in the months following February 1986 give rise to some doubt as to the appropriateness of the measures but do not make it possible to conclude that at the time at which they were adopted the Commission had made a manifestly wrong assessment.

I therefore conclude that there is sufficient objective justification for the difference of treatment provided for in Regulation No 400/86 and that it is therefore not unlawfully discriminatory.

( d ) The statement of the reasons on which the regulation is based

In this case, the statement of the reasons on which the measure is based is certainly succinct, although more precise than that to be found in measures with a similar content ( see, in particular, Commission Decision 80/533/EEC, cited above ).

However, it is clear that Regulation No 400/86 was adopted on the basis of a set of regulations which set out the purpose of special measures and, in particular, the criteria on which their application depends.

Regulation No 400/86, as well as referring expressly to the regulations on which it is based ( see the first and second recitals in the preamble ), also indicates the factors ( the level of prices and marketing possibilities ) of which account was taken and which justified the fixing of a maximum quantity to be bought into intervention in each Member State.

Moreover, those two aspects ( prices and marketing possibilities ) are essentially those on which the application to the Court for judicial review is based.

Consequently, even if further details might have been desirable, precisely in order to avoid confusion as to the way in which the Commission had exercised its powers, it none the less appears to me that the statement of the reasons on which the measure at issue is based is adequate, having regard to its nature, and fulfils the requirements of making the persons concerned aware of the scope of the measures and their justification and enabling the Court subsequently to exercise its powers of judicial review.

I therefore propose that the Court should declare that there is no factor of such a kind as to affect the validity of the regulations at issue in this case.

(*) Original language : Italian .

( 1 ) The reference price plays a double protective role. On the one hand, it is the basis ( higher than that used for other cereals ) for the calculation of the target price and, therefore, for the determination of the level of external protection; on the other, it is a parameter in relation to which possible support measures ( special intervention measures ) may be adjusted.

( 2 ) See Commission Decision 80/533/EEC of 14 May 1980, OJ 1980, L 138, p . 11 .

( 3 ) See Commission Regulation No 1428/83 of 2 June 1983, OJ 1983, L 145, p . 26 .

( 4 ) On the other hand, the Commission' s argument to the effect that account was taken, as an additional factor, of the positive trend of French exports in the period from September 1985 to February 1986 seems weaker. Exports, as an external component of demand, contribute to determining the level of prices. It can therefore be concluded that the data concerning prices on which the Commission based its decision already reflects, at any given time, the effect of exports.

( 5 ) In particular, in Eridania, the Court decided that :

"According to the established case-law of the Court, the statement of reasons required by Article 190 of the Treaty must be appropriate to the nature of the measure in question. It must show clearly and unequivocally the reasoning of the Community authority which adopted the contested measure so as to inform the persons concerned of the justification for the measure adopted and to enable the Court to exercise its powers of review.

It is also clear from that case-law, as confirmed most recently in the Court' s judgment of 28 October 1982 in Joined Cases 292 and 293/81 Société Jean Lion et Cie, Société Loiret & Haentjens SA and Others v Fonds d' intervention et de régularisation du marché du sucre ( 1982 ) ECR 3887, that the statement of the reasons on which regulations are based is not required to specify the often very numerous and complex matters of fact or of law dealt with in the regulations, provided that the latter fall within the general scheme of the body of measures of which they form part. Consequently, if the contested measure clearly discloses the essential objective pursued by the institution, it would be excessive to require a specific statement of reasons for each of the technical choices made by the institution" ( paragraphs 37 and 38 ).