CJEC, February 7, 1973, No 39-72

1 By application lodged with the registry on 3 July 1972, the Commission has brought before the Court, under article 169 of the eec treaty an action for a declaration that, in not taking the measures necessary to permit in its territory effective application within the prescribed period of the system of premiums for slaughtering dairy cows (hereinafter called " premiums for slaughtering ") and of premiums for withholding milk and milk products from the market (hereinafter called " premiums for non-marketing "), the Italian Republic has failed in the obligations imposed on it by regulation No 1975-69 of the Council of 6 October 1969 a system of premiums for slaughtering cows and for withholding milk and milk products from the market (oj l 252, p.1) and of regulation No 2195-69 of the Commission of 4 November 1969 establishing methods of implementing the aforementioned regulation (oj l 278, p.6);

2 Regulation No 1975-69, as modified especially by regulation No 580-70 of the Council of 26 March1970 (oj l 70, p.30), introduced, with a view to reducing the surpluses of milk and milk products existing at that time in the community, a system of premiums to encourage the slaughtering of dairy cows and the withholding of milk and milk products from the market.

The procedure for putting the system into operation was set out by the Commission in regulation No 2195-69 as amended and amplified on various subsequent dates.

As a result of these provisions, the member states were bound to take comprehensive measures, within the time limits laid down, to put the system into operation, especially as regards the making and verification of applications by farmers, the registration of the undertaking under which the applicants agree to give up completely the production or supply of milk, the notification to the Commission of the number and magnitude of the applications received, the control of the carrying out of the undertakings and finally the payment of the premiums to those entitled.

3 As regards the premiums for slaughtering, the aforementioned regulation fixed 1 to 20 December 1969 as the period in which the applications for the premium had to be made to the competent national authority, and from 9 February to 30 April 1970 as the period for slaughtering. For dairy cows calving between 1 April and 31 May 1970, the period was extended for thirty days after the day of calving.

The payment of the premiums had to be made, in accordance with the rules laid down by articles 4 of regulation No 1975-69 and 10 of regulation No 2195-69, within a period of two months from proof of slaughtering, save that as regards the balance due to farmers who had owned more than five dairy cows the payment was postponed for a period of three years.

4 On the other hand, as regards premiums for non-marketing, the applications had to be received by the competent national authority from 1 December 1969, and the first payment was to be made within three months from the signing of the undertaking by the applicant.

5 Because of an improvement observed in the sector of milk and milk products, the Council, by regulation No 1290-71 of 21 June 1971 (oj l 137, p.1), revoked the system of premiums for slaughtering and non-marketing provided for by regulation No 1975-69.

6 After the entry into force of regulations Nos 1975-69 and 2195-69 the Italian government presented a draft law to the parliament containing the necessary provisions for the application in Italy of the system of premiums for slaughtering and non-marketing.

By a circular of 23 March1970 the minister of agriculture gave directions to the provincial inspectorate as to the investigation of the applications already made in anticipation of the approval of the legislative measure which in particular, had to release the funds necessary to give effect to the regulation.

According to the explanations furnished by the Italian government, doubts appeared during the parliamentary debates as to the expediency of putting into effect the community regulations regarding premiums for non-marketing, and accordingly the relative provisions were struck out of the draft law, and parliament postponed its decision with regard to them.

In these circumstances there has been No measure implementing the system of premiums for non-marketing in the Italian Republic.

7 Thus, law No 935 of 26 October 1971 regarding " applying the community regulations in the sector of zoo technology and in the sector of milk products ", published in the gazzetta ufficiale No 294 of 22 November 1971, only contains provisions authorizing the government to take steps to implement the payment of the premiums for slaughtering and provides the financial means for the payment of these premiums only.

In execution of this law, the putting into effect of the system of premiums for slaughtering was secured by a decree of 22 March1972, whilst a subsequent decree of 27 March1972 put at the disposal of the administration the financial means necessary for the payment of the premiums for slaughtering.

It appears from information furnished in the course of the proceedings that the payment of the premiums to those entitled commenced about the end of the month of October 1972.

On the preliminary objection

8 The defendant, without going into the merits of the dispute, claims that the pursuit of the action commenced by the Commission is No longer warranted because of the circumstances.

The difficulties which had originally delayed the payment of the premiums for slaughtering having been overcome, the payment of these premiums is in process and therefore the raison d'être of the proceedings instituted by the Commission has disappeared.

As for the omission to pay the premium for non-marketing, the situation has become in the meantime irremediable, because it would No longer be possible physically to comply retroactively with the obligations which should have been performed during the period provided by the community provisions in question.

In these circumstances, the action brought by the Commission has lost its purpose on both counts, so that it only remains for the Court to hold that there is No need to give a decision.

9 The object of an action under article 169 is established by the Commission's reasoned opinion, and even when the default has been remedied subsequently to the time limit prescribed by paragraph 2 of the same article, pursuit of the action still has an object.

This object holds in the present case since, as regards the premiums for slaughtering the obligation placed on the Italian Republic is far from being completely performed; the question of the payment to those entitled of interest on the overdue payments, is not settled, and the complaints developed by the Commission in the course of the proceedings relate not only to the delay in carrying out the regulations but also to certain of the methods of application which have in effect weakened their efficacity.

10 As regards the non-performance of the provisions relating to the premiums for non-marketing, the defendant cannot in any case be allowed to rely upon a fait accompli of which it is itself the author so as to escape judicial proceedings.

11 Moreover, in the face of both a delay in the performance of an obligation and a definite refusal, a judgment by the Court under articles 169 and 171 of the treaty may be of substantive interest as establishing the basis of a responsibility that a member state can incur as a result of its default, as regards other member states, the community or private parties.

12 The preliminary objection raised by the defendant must therefore be rejected.

Merits

13 It is convenient to consider separately the manner in which the defendant has implemented the provisions regarding the premiums for slaughtering, and its refusal to implement the provisions regarding the premiums for non-marketing.

1. With regard to the premiums for slaughtering

14 The regulations of the Council and of the Commission have provided precise time limits for the carrying into effect of the system of premiums for slaughtering.

The efficacy of the agreed measures depended upon the observation of these time limits, since the measures could only attain their object completely if they were carried out simultaneously in all the member states at the time determined in consequence of the economic policy the Council was pursuing.

Over and above this, as has been stated by the Court in its judgment of 17 May 1972 (case 93-71 orsolina leonesio v ministry of agriculture of the Italian Republic, request for a preliminary ruling made by the pretore di lonato), regulations Nos 1975-69 and 2195-69 conferred on farmers a right to payment of the premium as from the time when all the conditions provided by the regulations were fulfilled.

It consequently appears that the delay on the part of the Italian Republic in performing the obligations imposed on it by the introduction of the system of premiums for slaughtering constitutes by itself a default in its obligations.

15 Apart from this delay in implementation, the Commission has raised certain complaints with regard to the manner in which the Italian government has given effect to the provisions of the system in question.

This criticism concerns more especially the fact that the provisions of the community have been distorted by the procedure in giving effect to them adopted by the Italian authorities and that these same authorities have not taken into consideration an extension of the time allowed for the slaughter.

16 Whilst the Italian law No 935 is limited to making the necessary financial provisions for giving effect to the system of premiums for slaughtering and to enabling the government to institute the appropriate administrative measures for giving effect to the community regulations, the decree of 22 March1972 provides, in the first article, that the provisions of the regulations " are deemed to be included in the present decree ".

In substance the same decree, apart from some procedural provisions of a national character, confines itself to reproducing the provisions of the community regulations.

17 By following this procedure, the Italian government has brought into doubt both the legal nature of the applicable provisions and the date of their coming into force.

According to the terms of article 189 and 191 of the treaty, regulations are, as such, directly applicable in all member states and come into force solely by virtue of their publication in the official journal of the communities, as from the date specified in them, or in the absence thereof, as from the date provided in the treaty.

Consequently, all methods of implementation are contrary to the treaty which would have the result of creating an obstacle to the direct effect of community regulations and of jeopardizing their simultaneous and uniform application in the whole of the community.

18 Moreover, the implementing measures provided both by law No 935 and by the decree of 22 March1972 do not take into account the extension of the time allowed for slaughter by regulation No 580-70, so that Italian farmers have been misled as regards the extension of the time allowed for the slaughter of cows which have calved between 1 April and 30 May 1970.

The default of the Italian Republic has thus been established by reason not only of the delay in putting the system into effect but also of the manner of giving effect to it provided by the decree.

2. As to the premiums for non-marketing:

19 The default in putting into operation the provisions of regulations Nos 1975-69 and 2195-69 with regard to premiums for non-marketing is due to a deliberate refusal by the Italian authorities.

The defendant justifies this refusal by the difficulty of providing an effective and serious inspection and control of the quantities of milk which are not marketed but destined for other use, taking into account both the special characteristics of Italian agriculture and the lack of adequate administration at a lower level.

In any case, according to the Italian government, measures intended to restrict the production of milk were inappropriate to the needs of the Italian economy, which is characterized by insufficient food production.

During the debate stages of regulation No 1975-69 of the Council the Italian delegation made these difficulties known and expressed clear reservations at that time with regard to the carrying out of the regulation.

In these circumstances, complaint ought not to be made against the Italian Republic for having refused to put into effect on its national territory provisions passed in spite of the opposition which it has manifested.

20 According to the third paragraph of article 43 (2) of the treaty, on which regulation No 1975-69 is founded, regulations are validly enacted by the Council as soon as the conditions contained in the article are fulfilled.

Under the terms of article 189, the regulation is binding "in its entirety" for member states.

In consequence, it cannot be accepted that a member state should apply in an incomplete or selective manner provisions of a community regulation so as to render abortive certain aspects of community legislation which it has opposed or which it considers contrary to its national interests.

21 In particular, as regards the putting into effect of a measure of economic policy intended to eliminate surpluses of certain products, the member state which omits to take, within the requisite time limits and simultaneously with the other member states, the measures which it ought to take, undermines the efficacy of the provision decided upon in common, while at the same time taking an undue advantage to the detriment of its partners in view of the free circulation of goods.

22 As regards the defence based on the preparatory work on regulation No 1975-69, the objective scope of rules laid down by the common institutions cannot be modified by reservations or objections which member states have made at the time the rules were being formulated.

In the same way, practical difficulties which appear at the stage when a community measure has to be put into effect cannot permit a member state unilaterally to opt out of observing its obligations.

The community institutional system provides the member state concerned with the necessary means to secure that its difficulties should be reasonably considered within the framework and principles of the common market and the legitimate interests of other member states.

23 In this respect, an examination of the regulations in question and their modifying instruments reveals that in many respects the community legislator has taken into consideration, by means of special clauses, the particular difficulties of the Italian Republic.

In these circumstances, any practical difficulties of implementation cannot be accepted as a justification.

24 In permitting member states to profit from the advantages of the community, the treaty imposes on them also the obligation to respect its rules.

For a state unilaterally to break, according to its own conception of national interest, the equilibrium between advantages and obligations flowing from its adherence to the community brings into question the equality of member states before community law and creates discriminations at the expense of their nationals, and above all of the nationals of the state itself which places itself outside the community rules.

25 This failure in the duty of solidarity accepted by member states by the fact of their adherence to the community strikes at the fundamental basis of the community legal order.

It appears therefore that, in deliberately refusing to give effect on its territory to one of the systems provided for by regulations Nos 1975-69 and 2195-69, the Italian Republic has failed in a conspicuous manner to fulfil the obligations which it has assumed by virtue of its adherence to the European Economic Community.

26 Under the terms of article 69 (2) of the rules of procedure, the unsuccessful party shall be ordered to pay the costs.

The defendant has failed in its pleas.

The Court

Hereby:

1. Declares that the Italian Republic, in not taking the measures necessary to permit the effective application in its territory and within the prescribed time limits of the system of premiums for slaughtering dairy cows and for withholding milk and milk products from the market, has failed to fulfil the obligations which lay upon it by virtue of regulation No 1975-69 of the Council of 6 October 1969 and regulation No 2195-69 of the Commission of 4 November 1969;

2. Orders the defendant to pay the costs.