CJEC, November 15, 1983, No 52-83

THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES

1. By application lodged at the court registry on 30 march 1983, the Commission of the European Communities brought an action pursuant to the second subparagraph of Article 93 (2) of the EEC Treaty for a declaration that the French Republic, by not complying within the period prescribed with Commission Decision no 82-245-EEC of 12 January 1983 on an aid scheme in favour of the textile and clothing industry in France (Official Journal, L 137, 26. 5. 1983, p. 24), had failed to fulfil an obligation under the Treaty.

2. It appears from the file that, on 19 February 1982, the French government notified the Commission, in pursuance of Article 93 (3) of the Treaty, of a draft order for the establishment of an aid scheme in favour of the textile and clothing industry under which the state was to take over part of the social security contributions payable by employers in the industry. That aid scheme was later established by order no 82-204 of 1 march 1982, published in Official Journal of the French Republic no 51 of 2 March 1982. Measures for its implementation were notified to the Commission on 16 April 1982 and brought into force by decree no 82-340 of the same date, published in the Official Journal of the French Republic no 90 of 17 April 1982.

3. According to Article 5 of the aforementioned order no 82-204, the taking over by the state of part of the social security contribution is to be subject to the conclusion between the state and the employer of a contract for a period of 12 months specifying the proportion of contributions taken over and the commitments entered into by the employer with regard to the maintenance or creation of employment and attaining a certain level of investment. The Article also provides that no contract may be concluded after 31 December 1982, but contracts concluded before that date may be renewed for a further period of 12 months.

4. The Commission gave the French government formal notice to submit its observations and subsequently, pursuant to the first subparagraph of Article 93 (2) of the Treaty took the aforementioned Decision which led to this action.

5. Article 1 of that Decision provides:

"The French Republic shall, within one month of notification of this Decision, abolish the aid scheme in favour of the textile and clothing industry under which the state takes over responsibility for part of the social security contributions payable by employers in the industry, introduced by order no 204 of 1 march 1982, the implementing rules for which were laid down by decree no 82-340 of 16 April 1982.

Furthermore, the French Republic shall cease to grant aid under the scheme in question from the date of notification of this Decision.

6. The Decision was notified to the French Republic on 21 January 1983 and the French government did not bring an action within the period prescribed by the third paragraph of Article 173 of the Treaty for a declaration that it was void.

7. On 23 February 1983, the French government sent to the Commission a communiqué stating that the procedure for "employment-investment" contracts would be re-implemented, digressively, for a second and final year. The Commission took the view that the issue of the communiqué was tantamount to a refusal by the French government to comply with its Decision and accordingly brought this action.

8. The French government maintains that it has fully complied with the Commission's Decision. It recalls that the Decision was adopted after the period prescribed for the conclusion of contracts had expired. Consequently, no contract was concluded after the notification of the Decision. The government admits, on the other hand, that the French authorities continued to fulfil undertakings into which they had entered by the contracts already concluded. However, it is of the view that it was entitled to interpret the Commission's Decision in a manner which would permit it to observe the principle of the protection of legitimate expectation, which the French authorities would have breached if they had unilaterally abrogated contracts already concluded. The court itself, it is claimed, recognized the existence of that principle in similar circumstances in its judgment of 12 July 1973 (in case 70-72 Commission v Germany (1973) ECR 813).

9. It must be observed that, in contrast to the Decision which led to case 70-72, the Commission's Decision of 12 January 1983 indicated clearly and unequivocally the obligations thereby imposed on the French Republic. It required the latter, from the date of notification, no longer to grant any aid under the scheme in question and, within a period of one month, to abolish the scheme. However, it is common ground that the French Republic continued to pay the aid for which the scheme provided to any employer who had made a contract and that the French government took no steps to abolish the aid scheme within the period prescribed by the Decision.

10. Moreover, the French government's argument with regard to the principle of the protection of legitimate expectation does not relate to the interpretation of the Decision, but constitutes a contention relating to its validity, which could only have been raised in support of an application for a declaration that it was void. In fact, as the court has already stressed in its judgment of 12 October 1978 (case 156-77 Commission v Belgium, (1978) ECR 1881), to allow a member state to which a Decision adopted under the first subparagraph of Article 93 (2) has been addressed a further opportunity to call in question the validity of that Decision on the occasion of an application referred to in the second subparagraph of that Article, in spite of the expiry of the period laid down in the third paragraph of Article 173 of the Treaty, would be impossible to reconcile with the principles governing the legal remedies established by the Treaty and would jeopardize the stability of that system and the principle of legal certainty upon which it is based.

11. In those circumstances, it must be declared that the member state in question has failed to fulfil its obligations, as contended in the Commission's conclusions.

Costs

12. Under Article 69 (2) of the rules of procedure the unsuccessful party is to be ordered to pay the costs. Since the defendant has failed in its submissions it must be ordered to pay the costs.

On those grounds,

THE COURT

Hereby:

1. Declares that the French Republic, by not complying within the period prescribed with Commission Decision no 83-245 of 12 January 1983 on an aid scheme in favour of the textile and clothing industry in France, has failed to fulfil one of its obligations under the Treaty;

2. Orders the French Republic to pay the costs.