CJEC, May 30, 1989, No 305-87

THE COURT

1 By an application lodged at the Court Registry on 5 October 1987, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by maintaining in force and applying certain provisions of its legislation with regard to the conclusion, by nationals of other Member States, of legal acts in respect of immovable property situated in border regions, the Hellenic Republic has failed to fulfil its obligations under Articles 7, 48, 52 and 59 of the Treaty.

2 In the Hellenic Republic, the sole article of the Presidential Decree of 22 to 24 June 1927 provides that the acquisition by foreign natural or legal persons of ownership of immovable property, or other real rights therein, with the exception of mortgages, situated in border regions of the country is prohibited on pain of absolute nullity of the legal act in question, criminal sanctions and the removal from office of any notary who infringes that prohibition. The same penalties are laid down by that provision in respect of the prohibition against letting or any other form of assignment to such persons of the right to use urban immovable property situated in the border regions of the country for a period of more than three years. That provision also prohibits on pain of the same sanctions the letting or assignment of the use of agricultural immovable property; that prohibition may be lifted only by a decision of the Ministers for the Interior, Agriculture and National Defence, adopted on the basis of an opinion of a special commission. Furthermore, Articles 1, 2, 3, 4 and 5 of Emergency Law No 1366 of 2 to 7 September 1938 prohibit, in respect of both Greek nationals and nationals of other Member States, the conclusion of legal acts relating to immovable property situated in the border regions or on an island or islet forming part of the Hellenic Republic, or in a coastal area or an area in the interior of the country designated a border region. However, by virtue of that law, natural persons of Greek nationality or legal persons under the management of Greek nationals may validly conclude such a legal act if they produce an attestation from the Ministry of Agriculture certifying that there are no objections to the conclusion of the legal act on security grounds. On the other hand, persons other than those mentioned above are permitted to conclude such legal acts only if the decree designating the area as a border region is revoked.

3 It is apparent from the documents before the Court that by various decrees, areas covering approximately 55% of Greek territory were designated border regions under the Presidential Decree of 1927 and the Emergency Law of 1938.

4 The Commission considers that in so far as the abovementioned provisions prohibit, restrict or make subject to conditions not imposed on Greek nationals the acquisition by foreigners, whether natural or legal persons, who are nationals of one of the other Member States of rights in immovable property situated in Greek frontier regions, they give rise to discrimination against such persons, contrary to Articles 7, 48, 52 and 59 of the Treaty.

5 Consequently, by letter of 18 April 1984, the Commission gave formal notice to the Greek Government of the alleged infringement, thereby initiating the procedure provided for in Article 169 of the Treaty.

6 On 2 April 1985, the Commission delivered to the Greek Government the reasoned opinion provided for in the first paragraph of Article 169 of the Treaty.

7 The Hellenic Republic informed the Commission that it was in the course of amending the legislation complained of and it would ensure the equal treatment of Greek nationals and those of other Member States.

8 However, since no measure has been adopted, the Commission has brought this action.

9 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

10 It should be pointed out at the outset that during the written procedure before the Court, the Greek Government did not contest the Commission' s complaints and merely made reference to the existence of a draft law which had been communicated to the Commission and approved by it.

11 It was only at the hearing that the Greek Government argued for the first time that the rules at issue were justified as a measure adopted under Article 224 of the Treaty, without stating, however, how the conditions for the application of that provision were fulfilled in this case. Since, moreover, that submission was not supported by any new evidence, the Court is unable to consider it.

12 According to the Commission, the Greek rules infringe Articles 7, 48, 52 and 59 of the Treaty. In that regard, it should be pointed out first that the general prohibition of discrimination on grounds of nationality laid down in Article 7 of the Treaty has been implemented, in regard to their several domains, by Articles 48, 52 and 59 of the Treaty. Consequently, any rules incompatible with those provisions are also incompatible with Article 7 (see the judgments of 21 June 1974 in Case 2-74 Reyners v Belgium ((1974)) ECR 631, of 14 July 1976 in Case 13-76 Donà v Mantero ((1976)) ECR 1333 and of 9 June 1977 in Case 90-76 van Ameyde v UCI ((1977)) ECR 1091).

13 Article 7 of the Treaty provides that: "Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited"; it applies independently only to situations governed by Community law in regard to which the Treaty lays down no specific prohibition of discrimination.

14 In this case, the Commission considers that the Greek rules infringe Articles 48, 52 and 59 of the Treaty. It must therefore be considered first whether the contested rules are compatible with those provisions.

15 With regard to freedom of movement for workers, it should be pointed out that at the time that the action was brought, that matter was governed by the transitional provisions of Articles 44 to 47 of the Act concerning the conditions of accession of the Hellenic Republic to the European Communities and the adjustments to the Treaties (Official Journal 1979, L 291, p. 17). Those provisions suspended, until 31 December 1987, the operation of Articles 1 to 6 and 13 to 23 of Regulation No 1612-68 of the Council of 15 October 1968 on freedom of movement for workers within the Community (Official Journal, English Special Edition 1968 (II), p. 475), implementing the rights guaranteed by Articles 48 and 49 of the Treaty, but not the application of Articles 48 and 49, in particular, in regard to workers from other Member States who were lawfully employed in the Hellenic Republic before 1 January 1981 and continued to be employed there after that date or those who were lawfully employed there for the first time after that date.

16 Thus, Article 9(1) of Regulation No 1612-68, which provides that "a worker who is a national of a Member State and who is employed in the territory of another Member State shall enjoy all the rights and benefits accorded to national workers in matters of housing, including ownership of the housing he needs", is applicable to such workers.

17 It should be pointed out that, in its application, the Commission asked the Court to declare that the Greek legislation is contrary, not to Article 9 of Regulation No 1612-68, but to Article 48 of the Treaty.

18 It should be noted in that regard that, on the one hand, Regulation No 1612-68 was adopted under Article 49 of the Treaty, according to which the Council is to issue directives or make regulations setting out "the measures required to bring about... freedom of movement for workers, as defined in Article 48..." and that, according to Article 48(3) itself, freedom of movement for workers entails the right "to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action ". It follows that access to housing and ownership of property, provided for in Article 9 of Regulation No 1612-68, is the corollary of freedom of movement for workers and is for that reason covered by the prohibition of discrimination against a national of a Member State who wishes to take employment in another Member State, laid down in Article 48 of the Treaty.

19 Therefore, in so far as the Greek legislation makes the right of workers who are nationals of other Member States and who were lawfully employed in the Hellenic Republic before or after 1 January 1981 to conclude any legal act relating to immovable property subject to conditions not imposed on Greek nationals, it constitutes an obstacle to freedom of movement for workers and is for that reason contrary to Article 48 of the Treaty.

20 With regard to freedom of establishment, Article 52 of the Treaty guarantees the right of nationals of a Member State who wish to work as self-employed persons in another Member State to be treated in the same way as nationals of that Member State and prohibits all discrimination on grounds of nationality arising under the legislation of the Member States and hindering access to or exercise of such activities.

21 As the Court has held on several occasions (see, most recently, the judgment of 14 January 1988 in Case 63-86 Commission v Italy ((1988)) ECR 29), the said prohibition is concerned not solely with the specific rules on the pursuit of an occupation but also with the rules relating to the various general facilities which are of assistance in the pursuit of that occupation.

22 In particular, as is apparent from Article 54(3)(e) of the Treaty and the General programme for the abolition of restrictions on freedom of establishment of 18 December 1961 (Official Journal, English Special Edition, Second Series IX, p. 7), the right to acquire, use or dispose of immovable property on the territory of a Member State is the corollary of freedom of establishment.

23 Under those circumstances, the Greek legislation, which makes the exercise of the right to purchase or use immovable property by nationals of other Member States subject to restrictions not imposed on Greek nationals, is a hindrance to the exercise of freedom of establishment which is contrary to Article 52 of the Treaty.

24 Similarly, with regard to freedom to provide services, access to ownership and the use of immovable property is guaranteed by Article 59 of the Treaty in so far as such access is appropriate to enable that freedom to be exercised effectively.

25 Among the examples mentioned in the General programme for the abolition of restrictions on freedom to provide services of 18 December 1961 (Official Journal, English Special Edition, Second Series IX, p. 3) is the right to acquire, use or dispose of immovable property or rights therein.

26 In that regard, the Court has already decided (judgment in Case 63-86, cited above) that persons providing services cannot be excluded from the benefit of the fundamental principle of non-discrimination in regard to access to ownership and the use of immovable property. That is the case, in particular, in the circumstances envisaged in the third paragraph of Article 60 of the Treaty.

27 Consequently, the restrictions laid down in the Greek legislation concerning the acquisition by nationals of other Member States of immovable property from which or in which a service is provided constitute an obstacle to the exercise of the freedom to provide services and are therefore contrary to Article 59 of the Treaty.

28 Since it has been established that the Hellenic Republic has failed to fulfil its obligations under Articles 48, 52 and 59 of the Treaty, there is no need to consider whether there has been a specific infringement of Article 7 of the Treaty in so far as the Commission has not referred to any situations other than those covered by the aforesaid Articles 48, 52 and 59.

29 It follows from all of the foregoing that, by maintaining in force and applying the sole article of the Presidential Decree of 22 to 24 June 1927 and Articles 1, 2, 3, 4 and 5 of Emergency Law No 1366 of 2 to 7 September 1938 with regard to the conclusion, by nationals of other Member States, of legal acts in respect of immovable property situated in its border regions, the Hellenic Republic has failed to fulfil its obligations under Articles 48, 52 and 59 of the EEC Treaty.

Costs

30 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Hellenic Republic has failed in its submissions, it must be ordered to pay the costs.

On those grounds,

THE COURT

hereby:

(1) Declares that, by maintaining in force and applying the sole article of the Presidential Decree of 22 to 24 June 1927 and Articles 1, 2, 3, 4 and 5 of Emergency Law No 1366 of 2 to 7 September 1938 with regard to the conclusion, by nationals of other Member States, of legal acts in respect of immovable property situated in its border regions, the Hellenic Republic has failed to fulfil its obligations under Articles 48, 52 and 59 of the EEC Treaty;

(2) The Hellenic Republic is ordered to pay the costs.