C-39/72

JUDGMENT OF 7. 2. 1973 — CASE 39/72

effect of Community Regulations and 5. For a State unilaterally to break, of jeopardizing their simultaneous according to its own conception of and uniform application in the whole national interest, the equilibrium of the Community. between advantages and obligations flowing from its adherence to the 4. It cannot be accepted that a Member Community brings into question the State should apply in an incomplete equality of Member States before or selective manner provisions of a Communitiy brings into question the Community Regulation so as to discriminations at the expense of their render abortive certain aspects of nationals, and above all of the Community legislation which it has nationals of the State itself which opposed or which it considers places itself outside the Comunity contrary to its national interests. In rules. the same way, practical difficulties This failure in the duty of solidarity which appear at the stage when a accepted by Member States by the Community measure has to be put fact of their adherence to the into effect cannot permit a Member Community strikes at the fundamen­ State unilaterally to opt out of tel basis of the Community legal observing its obligations. order.

In Case 39/72

COMMISSION OF THE EUBOPEAN COMMUNITIES, represented by its Legal Advisers, Armando Toledano-Laredo and Giancarlo Olini, acting as agents, having chosen its address for service in Luxembourg in the chambers of its Legal Adviser, Emile Reuter, 4 boulevard Royal,

applicant,

v

Advocate-General: H. Mayras Registrar: A. Van Houtte

gives the present

JUDGMENT

Issues of fact and of law

I — Statement of the facts Until that date, Member States were required to see that the system of The Council, considering that the premiums was applied in a correct situation in the sector of milk and milk manner and within the time limits products in the Community involved stipulated. substantial and growing surpluses, which As regards the premiums for needed to be limited, — by Regulation No slaughtering, the national authorities 1975/69 of 6 October 1969 (OJ L 252, p. were required to take the measures 1), as amended by Regulation No necessary to permit, on the one hand, the 1386/70, instituted a system of premiums submission of applications for premiums for slaughtering cows and for and the slaughtering of the cows within withholding milk and milk products the stipulated time limits, which expired from the market. respectively on 9 January and 30 June The methods of implementing this 1970, and, on the other hand, the system were established by Regulation verification of the applications submit­ No 2195/69 of the Commission of 4 ted. November 1969 (OJ L 278, p. 6), as amended especially by Regulation No. For the purpose of this verification, it 2240/70 of the Commission dated 4 was necessary to mark all dairy cows November 1970 (OJ L 242, p. 12). kept on the holding, to determine the The system instituted by Regulation No number of dairy cows conferring 1975/69 was repealed, as regard entitlement to a premium, taking applications for premiums made after 30 account of the cows kept on the holding June 1971, by Regulation No 1290/71 of at a particular date between, for Italy, 1 the Council dated 21 June 1971 stopping September 1968 and 30 November 1969, the grant of premiums for slaughtering to register the undertaking of the farmer cows and for withholding milk and milk to give up the production of milk products from the market (OJ L 137, p completely and to slaughter all the dairy 1). cows and provide a descriptive form to

accompany each dairy cow in all to the implementation of Regulations transactions until slaughter. Nos. 1975/69 and 2195/69, a draft law, which had already received the As regards the premium for withholding milk and milk products from the market, approval of the appropriate committee of the Senate and which had still to be the national authorities had to take measures concerning, in particular, the approved by the Chamber of Deputies. submission of applications in accordance On 26 October 1971 there was with the stipulated conditions, the promulgated Law No 935, 'applying the verification of the applications, the Community Regulations in the sector of determination of the number of cows zoo technology and in the sector of milk conferring entitlement to a premium, the products' (OJ of the Italian Republic No registration of the undertaking by the 294 of 22 November 1971). breeder to give up completely the The first paragraph of the first Article of disposal of milk or milk products by this Law provides that the Minister of way of sale or gift, as well as the survey Agriculture and Forestry shall establish, of all the businesses concerned with the by statutory instrument made with the collection of the products in the approval of the Minister of Health, the applicant's area. procedure for the investigation of The Member States were required to applications and the settlement of the make payment of the premiums for premiums for slaughthering cows. slaughtering cows within a period of two Paragraph 3 of this Article authorizes for months from the production of proof of this purpose the setting aside of a slaughter, and the first annual payment thousand million lire in the provisional of the premium for nonmarketing within estimates for 1970 of the Ministry of a period of three months from the Agriculture and Forestry.

Forestry for 1971. already submitted, in anticipation of the approval of the legislative measure On 21 February 1972 the Commission required to release the funds necessary gave a reasoned opinion, delivered on 28 for the implementation of Regulations February, in which it invited the Italian Nos 1975/69 and 2195/69. Republic to take within a period of one month the steps necessary to implement The Commission, observing the absence the system of premiums for slaughtering in Italy of implementing legislation or dairy cows and premiums for

COMMISSION v ITALY

the payment of the premiums for — order the Italian Republic to pay the slaughtering and gave them instructions costs of the proceedings; for the payment of these premiums. The Italian Government submits that On 27 March 1972 a joint decree was the Court should declare that there is no issued by the Minister of Agriculture and Forestry and the Finance Minister longer any need to give a decision in the presente case. granting an additional credit for 1972. By application lodged on 3 July 1972, the Commission, under Article 169, paragraph 2, of the EEC Treaty, brought IV — Pleas and arguments before the Court failure of which it of the parties complained on the part of the Italian Republic, with regard payment of the The pleas and arguments of the parties premiums for slaughtering cows and the may be summarized as follows: premiums for withholding milk and milk products from the market. The Commission after reviewing the situation in the sector of milk and milk products in the Community, and especially the measures taken by the II — Procedure Council to eliminate surpluses, observes that in its judgment of 17 May 1972 The written procedure followed a regular (Orsolina Leonesio v Minister of course; Agriculture and Forestry of the Italian The Court, on the report of the Republic; request for a preliminary Judge-Rapporteur, after hearing the ruling referred by 'Pretore' of Lonato; Advocate-General, decided to open the Case 93/71; Recueil 1972, p. 287), the oral procedure without a preparatory Court of Justice held that, as from the inquiry; moment when all the conditions

delay — more than two years after the were due to court decisions, and that the coming into effect of Regulation No Italian authorities refused even to accept 1975/69 — Law No 935 of 26 October all the consequences of these, 1971 'applying the Community particularly as regards the payment of Regulations in the sector of zoo interest. technology and in the sector of milk The considerable delay in the products'. promugation of the implementing This Law, moreover, was not of legislation meant, in any case, that the immediate application: its putting into premiums were not and could not be effect depended, on the one hand, on a paid within the time limits laid down by decree by the Finance Minister making the Community Regulations.

premiums. farmers were placed, as regards premiums for slaughtering, in a more The decree of the Finance Minister did disadvantageous position than the not issue until 30 December 1971, and farmers of other Member States, which this made necessary a new decree of 27 is contrary to the fundamental principle March 1972, with a view to the grant of an additional credit for the 1972 of the uniform application of Regulations throughout the Community. financial year. The interministerial decree of the (b) As regards the premium for Minister of Agriculture and Forestry and non-marketing, no implementing measure the Minister of Health was not adopted has been taken by the Italian Republic.

at the end of October 1972. It is proper of a technical or political nature that to notice however that the first payments they considered appropriate, in the

general interest of the Community as non-marketing, The realization of the well as in Italy's own interest. As from objects of the Community requires that the moment however when these the rules of Community law established arguments were not accepted by the by the Treaty itself or by the procedures Council, Regulations No 1975/69 and which it has created shall apply with full 2195/69, which were unanimously force at the same time and with the same adopted, should have been applied in effect over all the territory of the Italy as in all the other Member States. Community, without Member States The Italian Government had the duty to being able to put any obstacles insist that the national Parliament should whatsoever in the way. adopt the measures to give effect to the In these circumstances, it cannot

question. The Italian Republic has The Italian Government claims that a chosen an easy way out: it has simply distinction should be drawn between the neglected to apply the Regulations. Such an attitude cannot be tolerated in the case of premiums for the withholding of framework of the Community. milk and milk products from the market, on the one hand, and the case of It is not true that the Community premiums for slaughtering cows on the authorities have recognized the other hand. inadequate character of the measures taken to limit surpluses in the sector of (a) As regards the premiums for milk and milk products.

It is necessary (c) The argument of the Italian however to bear in mind that the Government, in so far as it persists in allocation of the necessary credits for the relying on budgetary or administrative financing of the system of premiums has rules to justify its failure to act, is quite met with difficulties due to the contrary to the decisions of the Court. concomitance of various substantial According to them, actions for a financial commitments which the Italian declaration of default are intended to State has had to face simultaneously, in assert the Community interests order to resolve the problems created by established by the Treaty against the the adaptation of the economic and inertia or resistance of the Member social structure of the country to new

JUDGMENT OF 7. 2. 1973 — CASE 39/72

does not come under Community law. Moreover, the Italian authorities, In these circumstances the pursuit of the although conscious of the necessity to action by the Commission is neither fulfil loyally their Community obliga constructive nor useful; it would only tions, were aware that doubts had have the gratuitously punitive effect of equally appeared at the Community level penalizing temporary difficulties with as to the rational nature of the measures which the Italian State has been laid down on premiums for the confronted. non-marketing of milk. (b) The intervention provided for in All these considerations taken together had led the Parliament to remove from the sector of premiums for withholding the draft law which it had before it the milk and milkproducts from the market has been found objectively impracticable measures relating to the system of

They have in the majority of Italian farms, the consequence changed the direction of statistics were lacking which would have their policy, especially with regard to permitted, by the survey and control of areas characterized by an insufficiency of the quantity of milk which was not production of the most necessary foods. marketed, the putting into effect of the At the present time it is in any case no Regulations. longer possible physically to meet It is not a question in the present case of retroactively the obligations which disputing the expediency or the validity should have been performed in the of Comunity rules, but of recognizing period laid down by the Community the objective reasons for which they Regulations in question.

COMMISSION v ITALY

In these circumstances it would have the Commission has taken this attitude been in accordance with the spirit of the in certain similar situations. Treaty for the Commission not to The pursuit of the proceedings started pursue the proceedings, which in the by the Commission is therefore present state of affairs can henceforth unwarranted; if the Commission does give rise only to formalism and legalism not desist, the Court should hold that without any practical bearing. Moreover, there is no need to give a decision.

Grounds of judgment

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 March 1970 (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.

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 March 1970 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 Regu­ lation.

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-

COMMISSION v ITALY

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'etre 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.

JUDGMENT OF 7. 2. 1973 — CASE 39/72

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.

COMMISSION v ITALY

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 slaugh­ tering.

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.

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 March 1972 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.

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 Com­ munity 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 priciples of the Common Market and the legitimate interests of other Member States.

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.

Costs

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.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral arguments of the parties;

Lecourt Monaco Pescatore

Donner Mertens de Wilmars

Delivered in open court in Luxembourg on 7 February 1973.

A. Van Houtte R. Lecourt

Registrar President