CJEC, May 17, 1972, No 93-71

1 (1) By order of 3 November 1971, received at the Court registry on 17 November 1971, the pretore di lonato has referred to the Court two questions concerning the interpretation of regulation (eec) no 1975-69 of the council of 6 October 1969 and of regulation (eec) no 2195-69 of the Commission of 4 November 1969 relating principally to the grant of subsidies to farmers for slaughtering their milk cows.

2 The first question asks the Court to rule "whether the provisions of regulation no 1975-69 and of regulation no 2195-69 are directly applicable in the Italian legal system and, if this question is answered in the affirmative, whether they create individual rights which national Courts must protect ". The second question asks, in essence, whether, where the conditions set out in article 5 (1) and (2) and in articles 6 and 9 of regulation no 2195-69 have been fulfilled, those regulations, in so far as they are concerned with the slaughtering subsidy, confer on the farmer concerned a right as against the member state to which he belongs to the payment of that subsidy, this being a right to which the national Court must afford immediate protection and which that state cannot render subject to additional conditions, in particular as to the period allowed for payment under article 10 of regulation no 2195-69.

3 These questions were referred to the Court in view of the fact that the plaintiff in the main action believed that she had complied with all the conditions to which the abovementioned regulations render subject the grant of a subsidy for slaughtering milk cows and had brought before the pretore di lonato an application for an injunction ordering the Italian ministry for agriculture and forestry to pay the subsidy. Moreover it appears from the documents in the case that the national authorities, while granting the subsidy on a "provisional authorization ", suspended payment on the ground that it was subject to the prior adoption by the Italian parliament of legislative provisions allocating the necessary funds.

4 Since these two questions are closely connected a joint reply may be given to them.

5 (2) the second paragraph of article 189 of the treaty provides that a regulation shall have "general application "and "shall be... Directly applicable in all member states ". Therefore, because of its nature and its purpose within the system of sources of community law it has direct effect and is, as such, capable of creating individual rights which national Courts must protect.

6 Since they are pecuniary rights against the state, these rights arise when the conditions set out in the regulation are complied with and it is not possible at a national level to render the exercise of them subject to implementing provisions other than those which might be required by the regulation itself. It is in the light of these considerations that the questions put should be answered.

7 (3) with regard to the conditions which the farmer must fulfil in order to be able to claim payment of the subsidy, the authority obliged to pay the subsidy and the period within which payment must be made, reference should be made to articles 1 to 4 and 12 of regulation no 1975-69 and to articles 3, 7, 9 And 10 of regulation no 2195-69.

8 Article 1 of regulation no 1975-69 provides that "farmers having at least two milk cows may, on application, receive a subsidy for slaughtering on the conditions specified below ", set by article 3 (1) of that regulation at 200 u. A. For each milk cow slaughtered.

9 Article 2 of that regulation provides that "the granting of the subsidy is, in particular, subject to the written undertaking of the recipient : (a) to give up the production of milk entirely and (b) to have all milk cows on his farm slaughtered during a period to be determined and at the latest by 30 April 1970 ".

10 Article 4 (1) of the same regulation provides that "for farmers having two to five milk cows the subsidy shall be paid when the applicant submits proof that he has fulfilled the undertaking referred to in article 2 (b) ".

11 article 12 of the regulation states that the "European agricultural guidance and guarantee fund, guidance section, shall reimburse the member states 50 per cent of the subsidies' concerned, thereby implying that the member states are to pay these subsidies to the farmers.

12 according to article 3 of regulation no 2195-69 "the application for the grant of the subsidy shall be lodged with the competent authority appointed by each member state during the period from 1 to 20 December 1969 "and was to contain certain information and declarations.

13 article 7 of that regulation provides that "the slaughtering period referred to in article 2 (b) of regulation (eec) no 1975-69 shall last from 9 February to 30 April 1970 ".

14 article 9 of the same regulation determines the manner in which the farmer must provide the proof laid down by article 4 (1) of regulation no 1975-69.

15 article 10 of regulation no 2195-69 states that "payment of the subsidy referred to in article 4 (1)... Of regulation (eec) no 1975-69 shall take place within two months of the establishment of proof of the slaughtering in accordance with article 9 of this regulation ".

16 it follows from article 5 (1) of regulation no 2195-69 that the grant of the subsidy was further subject to the finding by the Commission "that the applications lodged may be allowed to proceed ", which finding was made in respect of all applications submitted under article 3 of that regulation, by article 1 (a) of regulation no 140-70.

17 article 10 of regulation no 1975-69 empowers the Commission to authorize member states "to impose additional conditions "for the grant of the subsidy concerned and article 19 of regulation no 2195-69 sets out such conditions, requiring the member states to notify the Commission in appropriate cases of the provisions adopted by them pursuant to that article. It is common ground however that Italy did not make use of this possibility. It is also established that the Italian Republic adopted the technical measures provided for by articles 4, 5 (2) 6, 8 and 11 of regulation no 2195-69.

18 (4) the effect of all these provisions is that once all the conditions laid down in regulations nos 1975-69 and 2195-69 were fulfilled, those regulations conferred on farmers a right, which national Courts must protect, to payment of the slaughtering subsidy by the member state to which they belonged; such rights could be exercised in each case at the end of the period of two months following the establishment of the proof of slaughter as provided in article 10 of regulation no 2195-69.

19 as from that time, the abovementioned regulations give the farmer the right to require payment of the subsidy without that member state' s being able to rely on arguments based on any legislative provisions or administrative practices to withhold such payment. This finding is reinforced by the seventh recital of the preamble to regulation no 2195-69 which emphasizes that "it should be ensured that subsidies are paid in all member states within the same period ".

20 nevertheless, the Italian government has stated that the regulations in question did not create the right to payment of the subsidy where the national legislature had not allocated the necessary funds for this purpose.

21 the first paragraph of article 5 of the treaty provides that "member states shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this treaty or resulting from action taken by the institutions of the community ". If the objection of the Italian government were upheld it would have the result of placing farmers in that state in a less favourable position than their counterparts in other member states in disregard of the fundamental rule requiring the uniform application of regulations throughout the community. Moreover, regulations nos 1975-69 and 2195-69 lay down exhaustively the conditions on which the creation of the individual rights in question depend and these do not include considerations of a budgetary nature.

22 so as to apply with equal force with regard to nationals of all the member states, community regulations become part of the legal system applicable within the national territory, which must permit the direct effect provided for in article 189 to operate in such a way that reliance thereon by individuals may not be frustrated by domestic provisions or practices.

23 budgetary provisions of a member state cannot therefore hinder the direct applicability of a community provision and consequently of the exercise of individual rights created by such a provision.

24 the costs incurred by the government of the Italian Republic and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national Court, the decision on costs is a matter for that Court.

The Court

In answer to the questions referred to it by the pretore di lonato by order of that Court dated 3 November 1971, hereby rules:

1. A community regulation has direct effect and is, as such, capable of creating individual rights which national Courts must protect. Pecuniary rights against the state, conferred by such a regulation, arise when the conditions set out in the regulation are complied with and it is not possible at a national level to render the exercise of them subject to implementing provisions other than those which might be required by the regulation itself.

2. Once all the conditions laid down in regulations nos 1975-69 and 2195-69 were fulfilled, those regulations conferred on farmers a right, which national Courts must protect, to payment of the slaughtering subsidy by the member state to which they belonged; such rights could be exercised in each case at the end of the period of two months following the establishment of the proof of slaughter as provided in article 10 of regulation no 2195-69.

As from that time, the abovementioned regulations give the farmer the right to require payment of the subsidy without that member state's being able to rely on arguments based on any legislative provisions or administrative practices to withhold such payment.