C-230/78

and

Minister of Agriculture and Forestry,

Minister for Industry, Trade and Craft TRADES , and

S.PA. ZUCCHERIFICI MERIDIONALI

on the validity and interpretation of Article 2 (2) of Regulation (EEC) No 3331/74 of the Council of 19 December 1974 (Official Journal 1974, L 359, p. 18), on the allocation and alteration of the basic quotas for sugar,

JUDGMENT OF 27. 9. 1979 — CASE 230/78

The facts of the case, the course of the the 1968/69 to 1972/73 marketing years, procedure and the observations and to allocate it to such undertakings. submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Article 24 of Regulation No 3330/74 Justice of the EEC may be summarized provides that the Member States shall as follows: allot a basic quota to each undertaking which used its basic quota during the 1974/75 marketing year; the article lays down the method for establishing such I — Facts and procedure basic quotas and adds in paragraph (3) that the Council, acting by a qualified majority on a proposal from the Commission, shall adopt "the general (a) Regulations relevant to the case rules for the application of this article and any derogations therefrom". Those quota arrangements are applicable from The basic regulation on the common 1 July 1975 to 30 June 1980. organization of the market in sugar, Regulation No 3330/74, (Official Journal 1974, L 359, p. 1) divides the On the basis of the said Article 24 (3) quantities of sugar produced by the Council adopted Regulation No producers into three categories (cf. 3331/74 (Official Journal 1974, L 359, p. Article 23 et seq.). Each Member State is 18) which in Article 2 (1) permits the required to fix for each of its sugar Member States to reduce the basic undertakings an annual basic quota quotas of the producer undertakings; known as "Quota A" within the basic such reduction may not exceed, for the quantity allotted to it by the regulation, whole period from 1 July 1975 to 30 established with reference to the June 1980 5 % of the "original" basic production of such undertakings during quota.

(b) Facts In fact the Decree of 7 December 1977, which constituted the sole exercise of the The decree of 28 February 1976 power conferred on Italy by Article 2 (2) (Gazzetta ufficiale No 74 of 20 March of Regulation No 3331/74, increased by 1976), amending two prior decrees, 27% the production quota allocated to allocated to the sugar undertakings Zuccherifici Meridionale by way of a operating in Italy basic quotas for sugar series of reductions, which in no instance pursuant to Article 24 of the basic Regu­ exceeded 1%, in the quantity previously lation No 3330/74. Article 2 of the allocated to the four other undertakings. decree altered the quotas with effect from the 1976/77 marketing year pursuant to the derogation referred to in Eridania and Societa Italiana have Article 2 (1) of Regulation No 3331/74. requested the annulment of the Ministerial Decree of 7 December 1977 altering the basic quotas of the sugar On 20 February 1976 S.p.A. Zuccherifici referred to in the Ministerial Decree of Meridionali (hereinafter referred to as 28 February 1976 in implementation of "Zuccherifici Meridionali") submitted a Article 2 (2) of Regulation No 3331/74. restructuring plan for the development of beet processing and sugar producing. That plan was approved by a joint The Third Chamber of the Tribunale Ministerial Decree of 13 December 1976. Amministrativo Regionale of Latium, by It forms part of the general tendency an order of 3 July 1978, stayed the discernible in Italy to transfer beet proceedings before it and requested the production to the south. The plan Court of Justice to deliver a preliminary formed the subject-matter of cor­ ruling on the validity and, in the respondence between the Government of alternative, on the interpretation of the Republic of Italy and the Article 2 (2) of Regulation No 3331/74 Commission of the European Com­ in relation to the following questions: munities.

Assembly prescribed in the third (6) Are the limits to the power to alter subparagraph of Article 43 (2) of the the "basic quotas" of processing Treaty improperly omitted? undertakings in the present case restricted to those limits arising from (2) Has the duty contained in Article the necessity to implement the 190 of the Treaty requiring reasons above-mentioned plans or can other to be stated, and indeed sufficiently limits be discerned (for example, stated, been fulfilled? limits deriving from the protection of the right of undertakings to carry on their operations or from the (3) Does the application of the power in inviolability of quotas which have question to the Italian processing been entirely exhausted in the industry constitute an infringement previous marketing year, perhaps on of the prohibition of discrimination the view that the power to reduce between producers within the quotas applies only to the part of Community laid down with regard basic quotas which has not been to common organizations of the covered by the production of market in Article 40 (3) of the individual undertakings, etc.)? Treaty? (7) Is the direct applicability of the regu­ (4) Can it be considered that the lation within the Italian legal system exercise of a discretionary power of (second paragraph of Article 189 of substantial scope, both as regards its the Treaty) compatible with preconditions and its effect on the provisions intended to govern its quotas themselves, constitutes an implementation? infringement of the right of under­ takings to produce the so-called basic quotas which is inherent in the The order making the reference was economic activity of individuals? received at the Court Registry on 16 October 1978. Accordingly, does the existence of any guarantee that economic activities can be carried on, since In accordance with Article 20 of the Protocol on the Statute of the Court of they are included in the category of fundamental rights which it is the Justice of the EEC written observations purpose of the Community system to were lodged by Eridania, represented by Mauro De Andre and Antonio protect, affect the validity of the provision in question? Sorrentino, by the Società Italiana, represented by Antonio and Frederico Sorrentino, by the Government of the With regard to interpretation: Republic of Italy, represented by Adolfo Maresca, its Ambassador, acting as (5) Does Regulation No 3331/74 or Agent, assisted by Ivo Maria Braguglia, the Community system contain Avvocato Generale dello Stato [State discernible and specific criteria by Advocate General], by Zuccherifici which the agencies of the Italian Meridionali, represented by Vincenzo State must be guided in appraising Marone, Pietro Cattaneo, Giorgio whether the "restructuring plans" Pinotti and Giuseppe Guarino, by the which they intend to adopt or assist Council of the European Communities, are in accordance with those set out represented by Daniel Vignes, a Director in the regulation (defined briefly with the Legal Department of the without specific details in Article 2 Council, acting as Agent, and by the (2))? Commission of the European

In so far as the European Parliament appears to have been consulted such (a) Observations of the plaintiffs in the consultation took place only with regard main action to Article 2 (1) of Regulation No 3331/74. In this connexion the Par­ With regard to the first question Eridania liament asked for a reduction in the and Società Italiana observe that Regu­ discretion which the initial proposal of lation No 3331/74 was adopted on the the Commission left to the Member basis of the provisions of Article 24 (3) States by authorizing them to reduce the of basic Regulation No 3330/74. quotas by maximum of 10%. The Council complied with that request, Article 2 of Regulation No 3331/74 reducing that maximum level from 10% nevertheless authorizes Italy not only to to 5% in the final version of the regu­ reduce by 5% the quotas to which the lation; nevertheless, the Council inserted various undertakings are entitled but also the second paragraph into Article 2 to apply unlimited reductions to such which conferred upon the Italian quotas. A provision of this nature affects administration an appreciably wider the definition as such of the common discretion. organization of the markets; there is no doubt that it is accordingly necessary in connexion with that provision to follow Having regard to the substantive nature the procedure laid down in the third of paragraph (2) it would not only have subparagraph of Article 43 (2) of the been judicious in political terms but was Treaty which prescribes a proposal from also necessary from a legal point of view to submit it for fresh consultation with the Commission, consultation with the Assembly and action by the Council the Assembly. acting on a qualified majority. With regard to the second question Article 24 (3) of Regulation No Eridania and Società Italiana, the 3330/74, in implementation of which the plaintiffs in the main action, maintain provision in question was enacted, that the statement of the reasons for indeed does not make express provision Regulation No 3331/74 (second part of for consulting the Assembly, but the the third recital) constitutes a statement

of reasons for the provision in question may restrict the scope of such guarantee. which is at the very least tautological. Nevertheless, in granting Member States extremely wide powers to reduce the basic quotas of sugar undertakings without laying down limits, conditions Not only is there a failure to indicate the and criteria for the exercise of such reasons justifying so significant a powers the balance to be struck between departure from the system of quotas, but the public interest and the rights of nothing is said concerning the charac­ individuals was not attained at the outset teristics of the restructuring plans, either by a rule of law but instead is left as to the criteria on the basis of which exclusively to the arbitrary discretion of the Commission must draw up its the administration. opinion, or as to the limits within which such plans are to achieve a reduction in the quotas allocated to the various With regard to the fifth, sixth and seventh undertakings. questions, Eridania and Società Italiana consider that the provisions in question do not make it possible to discern criteria The third question must be answered in or limits circumscribing the power to the affirmative. The plaintiffs in the main reduce the quotas which has been action claim that, comparing the system conferred upon the Italian Republic. of quotas established in a general way by Article 24 (1) and (2) (first and se­ cond subparagraphs) of Regulation No The question whether the Italian 3330/74 and by Article 2 (1) of Regu­ administration may act directly in this lation No 3331/74, on the one hand, sphere or whether such action must be and the provisions of the third sub­ preceded by domestic legislation remains paragraph of Article 24 (2) of Regulation a question of the interpretation of the No 3330/74 and of Article 2 (2) of provisions of Italian constitutional law. Regulation No 3331/74, on the other, Italian producers are subject to powers of reduction very much wider than those (b) Observations of the Government of applicable to producers in other the Italian Republic countries. The provisions in question accordingly infringe the prohibition on discrimination set out in Article 40 (3) and in Article 7 of the Treaty. With regard to the first question the Government of the Italian Republic observes that the Commission, in its proposal for the regulation, made With regard to the fourth question, provision for a "room for manoeuvre" of Eridania and Società Italiana consider 10%. According to that proposal the that Article 2 (2) of Regulation No quotas were to be altered only if "the 3331/74 is unlawful because it infringes structure of the sugar economy of the fundamental rights, in particular the regions concerned is thereby improved". right of individuals freely to engage in economic activities. Naturally, it must be conceded that, particularly in the sphere In fact the possibility of reducing the of rights of an economic nature, the quotas in order to have regard for the guarantee accorded by fundamental need to restructure the sugar economy in rights is not absolute because it must be a specified region was already contained reconciled with the public interest which in the proposal submitted for the opinion

First of all it is clear from the case-law of the Court (judgment of 14 May 1974 in With regard to the second question the Case 4/73 Nold v Commission [1974] Italian Government considers that the ECR 491) that fundamental rights must additional power granted to Italy by be viewed in the light of the social Article 2 (2) of Regulation No 3331/74 function of the property and activities has been furnished with an adequate protected so that rights of this nature statement of reasons "in view of its may be subject to certain limitations in special situation in this sector" (third accordance with the public interest and recital). The details concerning that the objectives of general interest pursued particular situation are in fact contained by the Community. in the 14th recital of the preamble to Regulation No 3330/74. That recital is such as to supplement the statement of reasons contained in the third recital of the preamble to Regulation No 3331/74. With further reference to the obser­ vations summarized above the Italian Government considers that power to modify the quotas is fully compatible With regard to third question the with the fundamental right of free judgments of the Court make clear that enterprise claimed by the sugar under­ different treatment is justified where the takings.

JUDGMENT OF 27. 9. 1979 — CASE 230/78

Zuccherifici Meridionali observes that The fifth question is concerned to the questions concerning validity serve establish whether there is a Community no purpose. With regard to the first definition of the words "restructuring question it maintains that Article 43 is plans" employed in Article 2 (2) of not applicable because it refers only to Regulation No 3331/74. proposals which the Commission had to put forward within a period of two years following the entry into force of the Restructuring plans are a technical Treaty concept applicable on the same terms in both Community law and in the If it is considered that Article 43 is domestic law of the Member States. The applicable it follows from Article 149 of above-mentioned plans are characterized the Treaty that amendments made by the by the fact that they must take account Council to proposals from the of both the agricultural and the Commission — of whatever scope — industrial aspects of structural problems. need not be "returned" to the Assembly for its consideration.

cannot be held that the Council failed to In reply to a question put by the Court state the factors characterizing the of Justice the Council emphasizes that all situation in Italy. the provisions of Regulation No 3331 /74 are undoubtedly in the nature of It is in the context of the further implementing legislation. The provision function of the implementation at in Article 2 (2) of the said regulation national level of the regulatory falls entirely within the scope of Article provisions with which the national auth­ 24 (2) of Regulation No 3330/74 which orities are charged that the obligation to is concerned to reduce the quotas of state reasons must be complied with in undertakings which did not exhaust their full. This is also the context of the clari­ quotas between 1968 and 1975. fications requested in the fifth and sixth questions submitted. Likewise, the complaint concerning the circumstance that the Parliament was not With regard to the third question Zuc­ consulted is in fact unfounded. The cherifici Meridionali observes that the Council considered the proposal of the very distinctive nature of the situation in Commission on three occasions, on 21 Italy itself justifies the different and 22 October 1974, on 18 and 20 legislative treatment applied to Italy. November and on 10 December, before adopting it on 19 December. On 21 and In broaching the fourth question Zuc­ 22 October it discussed in particular the cherifici Meridionali maintains that the provision which was to become Article 2 common organization of the market of the future Regulation No 3331/74 does not place a restriction on private and gave special consideration to the economic initiative but on the contrary Italian problem. protects it. As for Parliament, it debated the Furthermore, the production quotas do proposal of the Commission on two not constitute a rigid and inviolable limit occasions, on 14 November and 9 to the free exercise of economic activity December. and their scope is limited exclusively to relations between the Member States. In the preamble to the Resolution of 9 December (Official Journal 1974, C 155, The seventh and last question falls p. 45) it is stated that the Parliament outside the purview of the Community "feels it necessary, however, in view of legal order. Consequently, it must be considered inadmissible. the grave anxieties at present being felt in agriculture, to consider the new Council decisions which have come to its

With regard to the second question the third recital of that to Regulation No Council claims that the general nature of 3331/74). a law prevents the legislature from providing all the details for the enactment of the law in its statement of reasons and furthermore that it is for the The Commission also refers to the 14th particular implementing decision to set out in detail the reasons for such a recital of the preamble to Regulation No 3330/74 which must be read in decision. conjunction with the third recital of the preamble to Regulation No 3331/74. The settled case-law of the Court of Justice confirms that the reasons for a The provision in question is situated provision which forms part of a group of within a three-fold framework. First, it provisions must be appraised in the was necessary to maintain the system of context of that group. quotas. Secondly, it was necessary to provide for an adjustment to the quotas in order to keep the system from becoming too rigid and excluding all freedom of competition, which is the With regard to the third question the reason for the adoption of Article 2 (1) Council considers that the power to of Regulation No 3331/74. Thirdly, it reduce quotas at the expense only of appeared necessary to lay down more certain sugar undertakings situated in flexible rules for Italy. The Italian sugar Italy is justified on objective grounds, industry has derived considerable benefit that is to say the objective need to from the system of quotas. Nevertheless restructure the sugar industry in Italy. it does not appear to be economically Whilst the other Member States entirely justified to conserve the status quo in that exhausted their basic quotas in the industry as that could ensure an course of the years 1968 to 1975 the entrenched advantage for existing sugar Italian sugar undertakings used, on undertakings, of which certain are run average, less than 90% of theirs. That is down, and would perpetuate beet the reason for the provision in question. growing in unsuitable regions at the It was nevertheless impossible to reduce expense of regions more suited to sugar the quotas of Italian undertakings which production. It is thus necessary to re­ did not attain their quotas solely on the structure the industry by modernizing basis of their performance. The Council undertakings and by removing beet preferred to relate such reduction to the growing to regions better suited to that restructuring of the Italian sugar-beet purpose. Accordingly, a reduction in sector and the Italian sugar industry, on the view that this was the sole means of quotas in excess of the usual reduction (5%) had to be made available for Italy, reaching an objective solution. which is the reason for the provision in Article 2 (2) of Regulation No 3331/74.

In addition the Commission may, With regard to reply to the seventh pursuant to Article 37 of Regulation No question it is necessary to distinguish 3330/74, bring up the question in the between two legal concepts, namely that Management Committee. of direct applicability and that of direct effect which may, but need not, occur simultaneously (Case 51/76, [1977] ECR Finally, although Article 8 of Regulation 127, paragraph 21). No 3331/74, which lays down a more detailed procedure for the supervision of It is thus perfectly permissible that a reductions which the Member States may regulation should contain in addition to effect pursuant to Article 2 (1) of that provisions having direct effect, provisions regulation, does not expressly apply to which still require implementing the reductions to be made pursuant to measures before they can have such Article 2 (2), nevertheless the general effect. procedure for supervision of the implementation of secondary legislation by the Member States, as laid down by (e) Observations of the Commission the Treaty (Article 169), is always applicable. With regard to the first question the Commission observes that Regulation The fourth question is intended to No 3331/74 has as its legal basis Article establish whether, by providing that an 24 (3) of Regulation No 3330/74. unlimited reduction in the quota of sugar Consequently, consultation with the undertakings may be effected, the Assembly is no longer required. provision in question is in breach of a fundamental right. With regard to the second question the Commission maintains that the statement According to the Council such an of reasons for Article 2 (2) of Regulation unlimited discretion does not in fact exist No 3331/74 is embodied in the second (cf. reply to the third question). sentence of the third recital of the preamble to that regulation. That Furthermore, a reduction in the basic statement must be interpreted within the framework of the third recital, taken as a quota of an undertaking does not mean whole. that it is prohibited from producing the quantity of sugar corresponding to such reduction. On the contrary, the result of In broaching the third question the such a reduction is to transfer that part Commission claims that the principle of of the basic quota to Quota B, which all non-discrimination is applied in the

agricultural sector within a particular A second criterion, based on Community context. This is true, according to the law, consists in the observance of the Commission, of the comparability of the principle of proportionality which is situations in question and of the embodied in the first sentence of the requirements of agricultural policy provision in question ("... in so far as is contained in Article 39 of the Treaty, necessary for the implementation [of which may justify arrangements which restructuring plans]"). appear discriminatory. In its reply to a question put by the Article 2 (2) of Regulation No 3331/74 Court of Justice the Commission states is intended to permit Italy to restructure that the provisions contained in Articles its beet-growing sector and sugar 7 and 8 of Regulation No 3331/74 for industry by moving them from the north the implementation of Article 2 (1) of the to the south of the country. Such said regulation do not refer by analog)' operations form part of a policy of to the application of the other regional development and industrial paragraphs of the latter article. redeployment even at national level. That policy renders it lawful for Italy to With regard to Article 2 of Regulation modify the basic quotas of the sugar No 3331/74 the Commission discerns undertakings to a greater degree than in substantive differences between the the other Member States. arrangements provided for in paragraph (1) and those provided for in paragraphs According to the Commission the fourth (2) and (3). 1 question, as it has been worded, presupposes that there was an actual In the opinion of the Commission the vested right to produce, throughout the exception provided for in paragraph (1) entire period when the quota arrange­ is applicable in the Community as a ments applied, that is to say from the whole. It conforms to specific and 1975/76 to the 1979/80 sugar marketing stringent criteria and it is implemented years inclusive, an unchangeable quantity by a procedure which permits the of sugar covered by the absolute intervention of the Commission on which guarantee of the intervention price. On binding powers are conferred, as is the contrary, the Community legislature shown by Article 8 (3) of the regulation did not intend to fetter itself so rigidly in question. for five years.

plans to which the procedure prescribed III — Oral procedure in Article 8 of Regulation No 3331/74 did not apply. At the hearing on 6 June 1979 Eridania, The Commission concludes from this represented by Antonio Sorrentino and that Regulation No 3331/74 contains Mauro De Andre, Advocates, Società specific arrangements both for the case Italiana, represented by Antonio and provided for in Article 2 (1) and for the Frederico Sorrentino, Advocates, the cases provided for in Article 2 (2) and Government of the Italian Republic, (3). It thus considers that it is impossible represented by Ivo Maria Braguglia, to proceed by analogy in the present Avvocato dello Stato, Zuccherifici case. Meridionali, represented by Giuseppe Guarino, Advocate, the Council of the With regard to the seventh question the European Communities, represented by Commission observes that Article 2 (2) Daniel Vignes, assisted by Miss Cristina of Regulation No 3331/74 makes ex­ Giorgi, and the Commission of the press provision for national implementing European Communities, represented by measures. The direct applicability of that Cesare Maestripieri, presented oral provision cannot consequently be argument. thwarted by a national measure whose sole effect is to give practical form to The Advocate General delivered his that provision. opinion at the sitting on 28 June 1979.

Decision

1 By an order of 3 July 1978 which was received at the Court of Justice on 16 October 1978, the Tribunale Amministrativo Regionale of Latium referred a number of questions to the Court under Article 177 of the EEC Treaty concerning the validity and interpretation of Regulation No 3331/74 of the Council of 19 December 1974 on the allocation and alteration of the basic quotas for sugar (Official Journal 1974, L 359, p. 18).

5 In the first question the Tribunale asks whether the prior consultation with the Assembly prescribed in Article 43 (2) of the Treaty was improperly omitted in the procedure followed for the adoption of Article 2 (2) of Regu­ lation No 3331/74.

6 The allocation to undertakings of basic quotas for the 1975/76 to 1979/80 sugar marketing years forms the subject-matter of the provisions of Article 24 of Regulation (EEC) No 3330/74 of the Council of 19 December 1974, on the common organization of the market in sugar (Official Journal 1974, L 359, p. 1). Those provisions require the Member States to effect that allocation within the framework of a basic quantity fixed for each Member State and in accordance with certain criteria which are based in particular on the "reference output" of the undertakings in question, that is to say, their average annual sugar output for the 1968/69 to 1972/73 marketing years multiplied by a certain coefficient; however, the provisions in question specify certain cases in which different criteria may be applied. Furthermore, Article 24 (3) provides that "That Council, acting by a qualified majority on a proposal from the Commission, shall adopt the general rules for the application of this article and any derogations therefrom". It should be noted that in the course of drawing up basic Regulation No 3330/74 the views of the Assembly were heard on the draft of those provisions.

ERIDANIA v MINISTER FOR AGRICULTURE AND FORESTRY

9 The first question submitted by the national court thus amounts to asking whether in the present case the provisions of Regulation No 3331/74 and in particular Article 2 (2) thereof which were enacted on the basis of the above- mentioned Article 24 (3) do not go beyond the limits of the implementation of the principles of the basic regulation.

10 The doubts set out in this connexion by the Tribunale Amministrativo stem in particular from the derogations contained in Article 2 of Regulation No 3331/74. According to Article 2 (1) Member States may reduce the basic quotas fixed in accordance with Article 24 of Regulation No 3330/74 by an amount not exceeding 5%; paragraph (2) provides that the Italian Republic may "alter" the same quotas "in so far as is necessary for the implementation of restructuring plans for the beet and sugar sectors".

JUDGMENT OF 27. 9. 1979 — CASE 230/78

11 Although the power of the Italian Republic to alter those quotas pursuant to Article 2 (2) is not subject to specific quantitative limits its exercise is nevertheless subject to the existence of restructuring plans — which, as the last sentence of the provision states, must be submitted to the Commission for its opinion before 1 July 1978 — and such exercise may not exceed what is necessary for the implementation of such plans. The exercise of that power is thus subject to clearly specified limitations.

12 It should be remarked in this connexion that the power in question corresponds to a concern which was already expressed in the basic regu­ lation. The latter makes provision for the temporary granting by Italy of adaptation aid to beet and cane producers and the statement of reasons for such exceptional arrangements refers to the particular situation of Italy where the production of such products is adversely affected owing to climatic reasons and, more particularly as regards beet production, by difficulties arising from the application of modern production techniques.

16 In view of the close connexion which exists between the basic regulation and the regulation adopted in implementation thereof such a means of stating the reasons for the detailed rules specifically pertaining to the common organi­ zation of the market in sugar in Italy must be permitted. It makes sufficiently clear to the competent authorities and to the relevant undertakings the concern which prompted the Council to enact those detailed rules and the objectives which must be pursued in the restructuring plans.

Question 3 (Discrimination)

17 The third question is based on the view that, apart from the possibility of a reduction of 5% in the basic quotas prescribed for the undertakings of all the Member States, only Italian producers are liable to be affected under Article 2 (2) of Regulation No 3331/74 by an additional limitation of their activity. The Tribunale Amministrativo asks whether the fact that the Italian industry alone is exposed to the risk of such a reduction does not constitute an infringement of the prohibition of discrimination between producers within the Community laid down in Article 40 (3) of the Treaty.

18 Discrimination within the meaning of Article 40 of the Treaty cannot occur if inequality in the treatment of undertakings corresponds to an inequality in the situations of such undertakings. It is commonly accepted that the situation in the beet and sugar sectors in Italy differs appreciably from that in the other Member States. The special situation of Italy referred to in the preambles to Regulations Nos 3330/74 and 3331/74 has occasioned special measures intended to improve the structure of the economy in the beet and sugar sectors in Italy as a whole. In certain respects the Italian undertakings enjoy more favourable arrangements than undertakings in the other Member States, for example with regard to the system of aids; in other respects certain Italian undertakings suffer the disadvantages of the special situation of Italy, for example in the case of the reduction in their basic quotas in

22 It follows that an undertaking cannot claim a vested right to the maintenance of an advantage which it obtained from the establishment of the common organization of the market and which it enjoyed at a given time. In those circumstances a reduction in such an advantage cannot be considered as constituting an infringement of a fundamental right.

ERIDANIA v MINISTER FOR AGRICULTURE AND FORESTRY

23 With regard to the first four questions the reply must be that consideration of those questions has disclosed no factor of such a kind as to affect the validity of Regulation No 3331/74, and in particular Article 2 (2) thereof.

Interpretation

Question 5 (Restructuring plans)

24 The Tribunale Amministrativo asks in the fifth question whether Regulation No 3331/74 or Community law in general lay down specific criteria for the appraisal of concept of "restructuring plans".

JUDGMENT OF 27. 9. 1979 — CASE 230/78

Commission to assess what alterations to the basic quotas of the sugar under­ takings are necessary in order to attain that objective.

27 Those factors as a whole show that the concept of "restructuring plans" may refer both to a comprehensive plan for adjusting the sugar market as a whole and to a plan for adjustments whose effects are purely regional even if, in the context of a gradual adjustment of beet production in a certain region, that plan initially concerns a single sugar undertaking alone.

28 The reply to the fifth question must accordingly be that the concept of "restructuring plans" within the meaning of Article 2 (2) of Regulation No 3331/74 is to be defined by its objectives, which are to redress the imbalance between different agricultural regions and to adapt the sugar and beet sectors in Italy to the requirements of the common organization of the market, and also by its effect, which is to allow the competent authorities to undertake a redistribution of the basic quotas between several undertakings.

Question 6 (Discretionary power)

29 In the sixth question the Tribunale Amministrativo asks whether the limits to the power to alter the basic quotas of the undertakings derive exclusively from the necessity to implement the restructuring plans or whether other limits can be discerned.

Question 7 (Direct applicability)

33 The seventh question raises the problem of whether the direct applicability of Regulation No 3331/74 within the Italian legal order pursuant to Article 189 of the Treaty is compatible with the provisions enacted by the Italian auth­ orities intended to govern the implementation of that regulation.

34 The fact that a regulation is directly applicable does not prevent the provisions of that regulation from empowering a Community institution or a Member State to take implementing measures. In the latter case the detailed rules for the exercise of that power are governed by the public law of the Member State in question; however, the direct applicability of the measure empowering the Member State to take the national measures in question will mean that the national courts may ascertain whether such national measures are in accordance with the content of the Community regulation.

JUDGMENT OF 27. 9. 1979 — CASE 230/78

35 The reply to the seventh question must accordingly be that there is no incompatibility between the direct applicability of a Community regulation and the exercise of the power conferred on a Member State to take implementing measures on the basis of that regulation.

Costs

(3) The power conferred by Article 2 (2) of Regulation No 3331/74 to alter the basic quotas is limited not only by the requirements of restructuring plans but also by the objectives of the common organ­ ization of the market in sugar, in particular by the aim of protecting the interests of beet and cane producers, and by the general principles of Community law.

ERIDANIA v MINISTER FOR AGRICULTURE AND FORESTRY

(4) There is no incompatibility between the direct applicability of a Community regulation and the exercise of the power conferred on a Member State to take implementing measures on the basis of that regulation.

Kutscher Mertens de Wilmars Mackenzie Stuart

Pescatore Sørensen O'Keeffe Koopmans

Delivered in open court in Luxembourg on 27 September 1979.

The third question 2783

The fourth question 2784

The fifth question 2785

The sixth question 2786

The seventh question 2787 Conclusions 2788