Avis juridique important

61973J0173

European Court reports 1974 Page 00709 Greek special edition Page 00351 Portuguese special edition Page 00357 Spanish special edition Page 00325 Swedish special edition Page 00321 Finnish special edition Page 00323

Summary

1 . AIDS GRANTED BY MEMBER STATES - PLANS - IMPLEMENTATION IN CONTRAVENTION OF ARTICLE 93 ( 3 ) OF THE EEC TREATY - POWERS OF THE COMMISSION

3 . AIDS GRANTED BY MEMBER STATES - CONCEPT - PUBLIC CHARGES DEVOLVING UPON UNDERTAKINGS IN A SECTOR OF INDUSTRY - REDUCTION - AIM - EXEMPTION - CLASSIFICATION AS AID ( EEC TREATY, ARTICLE 92 )

Parties

IN CASE 173/73, GOVERNMENT OF THE ITALIAN REPUBLIC, REPRESENTED BY A . MARESCA, AMBASSADOR, ACTING AS AGENT, ASSISTED BY 'VICE AVVOCATO DELLO STATO' I . M . BRAGUGLIA, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE ITALIAN EMBASSY APPLICANT, V THE COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISERS A . MARCHINI-CAMIA AND M . VAN ACKERE, ACTING AS AGENTS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ITS LEGAL ADVISER P . LAMOUREUX, 4, BOULEVARD ROYAL DEFENDANT,

Subject of the case

APPLICATION FOR THE ANNULMENT OF THE COMMISSION DECISION OF 25 JULY 1973, TAKEN ON THE BASIS OF ARTICLE 93 ( 2 ), FIRST SUBPARAGRAPH, AND ( 3 ) OF THE EEC TREATY, ON ARTICLE 20 OF ITALIAN LAW NO 1101 OF 1 DECEMBER 1971 ON THE RESTRUCTURING, REORGANIZATION AND CONVERSION OF THE TEXTILE INDUSTRY .

Grounds

1 BY APPLICATION OF 9 OCTOBER 1973 THE GOVERNMENT OF THE ITALIAN REPUBLIC ASKED, ON THE BASIS OF ARTICLE 173 OF THE EEC TREATY, THAT THE COURT SHOULD ANNUL THE COMMISSION DECISION OF 25 JULY 1973 ON ARTICLE 20 OF THE ITALIAN LAW NO 1101 OF 1 DECEMBER 1971 ON THE RESTRUCTURING, REORGANIZATION AND CONVERSION OF THE TEXTILE INDUSTRY ( OJ OF 11 SEPTEMBER 1973, NO L 254, P . 14 ).

2 THE ACTION IS BASED ON THREE SUBMISSIONS DESCRIBED AS 'PRELIMINARY', RELATING TO THE FORM AND PRELIMINARY PROCEDURE OF THE DECISION, AND THREE SUBMISSIONS DESCRIBED AS 'SUBSIDIARY', RELATING TO ITS SUBSTANCE .

3 THE APPLICANT GOVERNMENT OBJECTS FIRST OF ALL TO THE FACT THAT IT IS DECLARED IN ARTICLE 1 OF THE CONTESTED DECISION THAT : 'THE ITALIAN REPUBLIC SHALL ABOLISH THE TEMPORARY AND PARTIAL REDUCTION OF SOCIAL CHARGES PERTAINING TO FAMILY ALLOWANCES PROVIDED FOR IN ARTICLE 20 OF LAW NO 1101 ...; IT FEELS THAT THE TERMS OF THIS ARTICLE IMPLY THAT THE DECISION IS INTENDED TO HAVE A DIRECT EFFECT IN ITALY'S DOMESTIC LEGAL ORDER .

4 BY ITS SECOND SUBMISSION THE APPLICANT COMPLAINS THAT THE DECISION DID NOT FIX A PERIOD OF TIME FOR COMPLIANCE AND SUBMITS THAT IN THE ABSENCE OF THIS ELEMENT, WHICH IS ESSENTIAL TO THE LEGALITY OF THE DECISION, THE LATTER BE CONSIDERED VOID .

5 THE THIRD SUBMISSION CONTENDS THAT THE PRELIMINARY PROCEDURE UNDER ARTICLE 93 ( 1 ) WAS NOT PROPERLY CONDUCTED .

6 IT IS ACCEPTED THAT THOUGH ARTICLE 20 OF ITALIAN LAW NO 1101 CREATED AN INNOVATION WITH REGARD TO THE PREVIOUS LEGAL POSITION OF THE ITALIAN TEXTILE INDUSTRY AND SMALL CRAFTS, THERE WAS NO PRIOR NOTIFICATION TO THE COMMISSION OF THE ADOPTION OF THIS PROVISION AS PRESCRIBED BY ARTICLE 93 ( 3 ).

7 IN ORDER TO ENSURE THE PROGRESSIVE DEVELOPMENT AND FUNCTIONING OF THE COMMON MARKET IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 92, ARTICLE 93 PROVIDES FOR CONSTANT REVIEW OF AIDS GRANTED OR PLANNED BY THE MEMBER STATES, AN OPERATION WHICH ASSUMES CONSTANT COOPERATION BETWEEN THESE STATES AND THE COMMISSION .

8 THE SUBMISSIONS AMOUNT TO THE ASSERTION THAT A NEW AID GRANTED BY A MEMBER STATE IN CONTRAVENTION OF PARAGRAPH ( 3 ) MUST BE TREATED IN THE SAME WAY AS AIDS GRANTED LEGALLY AND, CONSEQUENTLY, SHOULD BE SUBJECT ONLY TO THE PROCEDURE PRESCRIBED BY ARTICLE 93 ( 2 ), INCLUDING THE COMPULSORY FIXING OF A TIME LIMIT .

9 MOREOVER, THE SPIRIT AND GENERAL SCHEME OF ARTICLE 93 IMPLY THAT THE COMMISSION, WHEN IT ESTABLISHES THAT AN AID HAS BEEN GRANTED OR ALTERED IN DISREGARD OF PARAGRAPH ( 3 ), MUST BE ABLE, IN PARTICULAR WHEN IT CONSIDERS THAT THIS AID IS NOT COMPATIBLE WITH THE COMMON MARKET HAVING REGARD TO ARTICLE 92, TO DECIDE THAT THE STATE CONCERNED MUST ABOLISH OR ALTER IT, WITHOUT BEING BOUND TO FIX A PERIOD OF TIME FOR THIS PURPOSE AND WITH THE POSSIBILITY OF REFERRING THE MATTER TO THE COURT IF THE STATE IN QUESTION DOES NOT COMPLY WITH THE REQUIRED SPEED .

10 FINALLY, THE THIRD SUBMISSION RELATING TO PROCEDURAL IRREGULARITIES HAS NOT BEEN ADEQUATELY DEVELOPED AND IS THUS INADMISSIBLE .

11 THE ABOVE SUBMISSIONS MUST THEREFORE BE DISMISSED .

AS TO THE SUBSIDIARY SUBMISSIONS

12 THE APPLICANT GOVERNMENT MAINTAINS FIRST THAT, BY ENCROACHING UPON A FIELD RESERVED BY THE TREATY TO THE SOVEREIGNTY OF MEMBER STATES - THAT OF THE LEVYING OF INTERNAL TAXATION - THE DECISION IS VITIATED BY REASON OF ABUSE OF POWERS .

13 THE AIM OF ARTICLE 92 IS TO PREVENT TRADE BETWEEN MEMBER STATES FROM BEING AFFECTED BY BENEFITS GRANTED BY THE PUBLIC AUTHORITIES WHICH, IN VARIOUS FORMS, DISTORT OR THREATEN TO DISTORT COMPETITION BY FAVOURING CERTAIN UNDERTAKINGS OR THE PRODUCTION OF CERTAIN GOODS .

14 AS TO THE ARGUMENT THAT THE CONTESTED MEASURE HAS NO PURPOSE OTHER THAN TO RECTIFY THE AMOUNT OF CHARGES PAYABLE BY THE TEXTILE INDUSTRY TO THE STATE INSURANCE SCHEME, IN THIS CASE RELATING TO FAMILY ALLOWANCES, IT IS CLEAR THAT THE ITALIAN FAMILY ALLOWANCE SCHEME IS INTENDED, AS IS THE CASE WITH ALL SIMILAR SCHEMES, TO ENSURE THAT THE WORKER OBTAINS A SALARY WHICH MEETS THE NEEDS OF HIS FAMILY .

15 THE ABOVE OBSERVATIONS IN RESPECT OF CHARGES UNDER THE FAMILY ALLOWANCE SCHEME PAYABLE OUT OF THE PROFITS OF AN UNDERTAKING APPLIES, ON THE SAME BASIS, TO THE RELATIONSHIP BETWEEN THE DIFFERENT BRANCHES OF INDUSTRY .

16 THE ARGUMENT THAT THE CONTESTED REDUCTION IS NOT A 'STATE AID', BECAUSE THE LOSS OF REVENUE RESULTING FROM IT IS MADE GOOD THROUGH FUNDS ACCRUING FROM CONTRIBUTIONS PAID TO THE UNEMPLOYMENT INSURANCE FUND, CANNOT BE ACCEPTED .

17 AS TO THE ARGUMENT THAT THE SOCIAL CHARGES DEVOLVING UPON EMPLOYERS IN THE TEXTILE SECTOR ARE HIGHER IN ITALY THAN IN THE OTHER MEMBER STATES, IT SHOULD BE OBSERVED THAT, IN THE APPLICATION OF ARTICLE 92 ( 1 ), THE POINT OF DEPARTURE MUST NECESSARILY BE THE COMPETITIVE POSITION EXISTING WITHIN THE COMMON MARKET BEFORE THE ADOPTION OF THE MEASURE IN ISSUE .

18 IN ADDITION, THE SOCIAL CHARGES PAYABLE BY EMPLOYERS ARE PART OF THE MORE GENERAL CATEGORY OF LABOUR COSTS .

19 THE ITALIAN TEXTILE INDUSTRY IS IN COMPETITION WITH TEXTILE UNDERTAKINGS IN THE OTHER MEMBER STATES, AS IS SHOWN BY THE SUBSTANTIAL AND GROWING VOLUME OF ITALIAN TEXTILE EXPORTS TO OTHER MEMBER STATES OF THE COMMON MARKET .

20 ACCORDINGLY, THE SUBSIDIARY SUBMISSIONS MUST ALSO BE DISMISSED .

Decision on costs

21 IN PURSUANCE OF ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE OF THE COURT OF JUSTICE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .

22 THE APPLICANT HAS FAILED IN ITS SUBMISSIONS .

Operative part

ON THOSE GROUNDS, THE COURT HEREBY : 1 . DISMISSES THE ACTION; 2 . ORDERS THE APPLICANT TO BEAR THE COSTS .