C-543/79

APPLICATION in the terms set out in the pleadings,

T H E COURT (First Chamber)

composed of: G. Bosco, President of Chamber, A. O'Keeffe and T. Koopmans, Judges,

Advocate General: F. Capotorti Registrar: J. A. Pompe, Deputy Registrar

gives the following

BIRKE ν COMMISSION AND COUNCIL

1. Background provisions After the collapse in 1971 of the inter­ national system of fixed exchange rates, which is at the heart of those provisions, This case should be seen against the the parities came to reflect less and less background of the following provisions: the purchasing power of the currencies involved and their value on the inter­ (a) In the version in force until 31 national money market. Officials who March 1979, Article 63 of the Staff made transfers to countries the value of Regulations of Officials provided that: whose currency had increased in relation to the parities notified to the Inter­ "An official's remuneration shall be national Monetary Fund were thus able expressed in Belgian francs. to realize gains on the exchange rate, as compared with transfers made in normal It shall be paid in the currency of the market conditions. country in which the official performs his duties. In accordance with the legal position existing prior to 1 April 1979 the Remuneration paid in a currency other weighting provided for in Article 64 of than Belgian francs shall be calculated on the Staff Regulations to reflect the living the basis of the par values accepted by standards at the place where the official the International Monetary Fund, and in performed his duties had to be applied to force on 1 January 1965." the whole of the remuneration including the part to be transferred to another The relevant parity was BFR 12.50 to country pursuant to Article 17 of Annex DM 1 and BFR 8 to LIT 100. VII. This led to an increase in the weighting for officials assigned to In accordance with Article 17 of Annex countries such as Italy where the value of VII to the Staff Regulations, an official the currency had decreased in relation to may have part of his emoluments the parities notified to the International transferred, either regularly or on an Monetary Fund and to a reduction in the exceptional basis, to a country other than weighting for officials assigned to the one in which he performs his duties. countries whose currency had gained in Until 31 March 1979 Article 17 (4) value in relation to the parities of the provided that such transfers were to be Fund. However, the applicant maintains

that the increase made in the weighting "Transfers provided for in paragraphs was very slight. For example, the (2) and (3) shall be made on the basis of weighting for Italy was increased, in the par values referred to in the last figures, from 100 to 146.9, whereas the paragraph of Article 63 of the Staff exchange rate had fallen from LIT 12.5 Regulations; the amounts transferred for BFR 1 to LIT 28 for BFR 1. shall be multiplied by a coefficient representing the difference between the weighting for the country in whose currency the transfer is made and the weighting for the country in which the official is employed." Pensioners were able to derive special advantages from these provisions, if they declared their domicile to be in a country whose currency had diminished On 1 April 1977 the Commission in value, the weighting in respect of that submitted to the Council a proposal for a country was applied to their pension in Council regulation introducing the accordance with Article 82 (1) of the European unit of account (EUA) into the Staff Regulations. Article 45 of Annex Staff Regulations of Officials (Official VIII to the Staff Regulations gave them Journal C 99, p. 5). That proposal was the opportunity of having their pensions rejected by the Staff Regulations paid in the strong currency of their Committee to which it had been country of origin or of that of the seat of referred. The Council obtained the the institution to which they belonged. opinion of the European Parliament and This state of affairs was condemned by of the Court of Justice. By resolution of Mr Advocate General Mayras in his 7 July 1977 (Official Journal C 183, opinion in Case 28/74 (Gillet, [1975] p. 55) the Parliament approved the ECR 475). proposal taking note of "the Com- mission's assurance that its proposal will in no way affect the real value of the payments made to officials in the form of remuneration, pensions and allowances". At the sitting the Commissioner From 1974 onwards the Commission has responsible for administration, Mr submitted proposals to the Council with Tugendhat, stated: 'The object of the a view to abolishing the anomalies in the Commission's system is financial rules governing the payment of re- neutrality, and what we think that our muneration and pensions brought about system can achieve is an equality of by the breakdown in the international purchasing power. What we want is that system of fixed exchange rates. a Commission official of a given grade, whether he is working in Brussels or Luxembourg or London or any other part of the Community, should be able to buy exactly the same quantity of The proposal for a Council regulation goods as his equal in another part of the amending the Staff Regulations of Community... The problem of transfers Officials, submitted to the Council by is also one that has preoccupied the the Commission on 13 June 1974 Commission. There is a proposal for an (Official Journal C 88, p. 25) provided amendment of the Staff Regulations now for an amended version of Article 17 (4) under consideration. In our view, that of Annex VII to the Staff Regulations as amendment must be adopted no later follows : than the present draft regulation and

that, I think, covers another point about apply from 1 April 1979. However, for which there has been concern." pensioners in receipt of allowances whose net financial benefits will be less than those under the existing arrangements, the regulation will apply The Council did not succeed in 1978 in only from 1 October 1979." adopting the regulation proposed by the Commission on 6 October 1976 (Official Journal C 271, p. 5) "on the procedure for applying the European unit of account (EUA) to the legal acts adopted (b) On 21 December 1978 the Council by the institutions of the European adopted Regulation No 3085/78 Communities". The Commission there­ (Official Journal 1978 L 369, p. 6), fore set to work to bring up to date, in amending, with particular reference to the light of the situation thereby created, the monetary parities to be used, Regu­ the exchange rates in respect of remun­ lation No 259/68 laying down the Staff eration for officials which was envisaged Regulations of Officials of the European by the proposal of 1 April 1977. In an Communities and the Conditions of annex to its report in 1978 on the yearly Employment of Other Servants of the survey of the level of remuneration Communities, Regulation No 2530/72 (COM (78) 673 final of 29 November and Regulation No 1543/73 concerning 1978) the Commission sent the following certain special measures. The regulation communication to the Council on which embodies the wording of the communi­ neither the Parliament, the Court of cation from the Commission of 29 No­ Justice nor the Staff Regulations vember 1978 and also the formula Committee was consulted : contained in the proposal of 1 April 1977 concerning the weighting to be applied to amounts transferred. The Council added, however: "From that date the " . . . The first two paragraphs of Article difference between the net amounts 63 are to be replaced by the following: resulting from the implementation of the 'Officials' remuneration shall be regulation and those received in expressed in Belgian francs. It shall be September 1979 shall be reduced by Vio paid in the currency of the country in per month". The regulation fixes 1 July which the official performs his duties. 1978 as the relevant date for calculating Remuneration paid in a currency other remuneration paid in a currency other than Belgian francs shall be calculated on than Belgian francs on the basis of the the basis of the exchange rates used for exchange rates used for the the implementation of the general budget implementation of the general budget of of the European Communities on . . . " the Communities and goes on to state that that date shall be changed at the time of the annual review of remuner­ The Commission urges the Council to ation. adopt the aforementioned article before the end of the year as well as Article 17 of Annex VII which is the result of the Council's studies relating to the (c) Hand in hand with the bringing up amendment to the Staff Regulations . . . to date of the rates of exchange, the Council adopted Regulation No 3086/78 of 21 December 1978 (Official Journal The . . . regulation should come into L 369, p. 8) adjusting the weightings effect on 1 January 1979 . . . and should applicable to the remuneration and

pensions of Officials and Other Servants Brussels to those in Rome and vice versa. of the European Communities following This figure is used for calculating the the amendment of the provisions of the weightings within the Community Staff Regulations concerning the because it expresses the relationship of monetary parities to be used in prices from one town to another in a implementing the Staff Regulations, reversible manner and because it is which amended the value of the therefore possible to make not only weighting according to the various places bilateral price comparisons but also mul- of employment. In order to do that the tilateral ones. According to this method, Commission and the Council of the the weighting is obtained by dividing the European Communities used a formula "Fisher" index calculated as described the intended result of which was that in above, by the corresponding rate of the case of each official or other servant exchange used to convert the remuner- employed outside Belgium or Luxem- ation of officials into the respective bourg the remuneration for April 1979 national currencies in accordance with would be maintained at the same level as Article 63 of the Staff Regulations. In that of the previous month. However, in October and November 1975 a the applicant's view, as far as the comparative study of prices was carried disposable amount of his remuneration is out in all the capitals of the Community. concerned that formula resulted in the changes to which he refers in detail in these proceedings, namely a reduction of about 25%. (d) Regulation No 3987/78 of 21 De- cember 1978 adjusting the weighting applicable to the remuneration and In fixing the weighting referred to in pensions of Officials and Other Servants Article 64 of the Staff Regulations, the of the European Communities employed Council and the Commission have, since or having a home in Italy (Official 1967, used the following procedure for Journal L 369, p. 10) provides: comparing the level of prices between Brussels and the various other places of employment. The Statistical Office of the "Having regard to the proposal from the European Communities, in conjunction Commission, with the competent national offices, carries out regular price surveys in respect of goods and services considered Whereas the weighting for Italy should as representing typical items of be corrected in line with the findings of household expenditure for officials in the the statistical surveys carried out by the various places of employment. In respect Statistical Office of the European of each item the relationship is calculated Communities, between the price in Brussels and the price prevailing in the town which is used as the point of reference for the has adopted this regulation: place where the official performs his duties. By the use of this weighting it is possible to calculate the relative pur- Article 1 chasing power of currencies in the countries where the officials of the Community perform their duties. For 1. With effect from 1 January 1978, the example, the index calculated using the weighting applicable to the remuneration "Fisher" method expresses in a single of officials employed in Italy shall be figure the relationship of prices in 146.4.

The weightings for Italy given in Article The statistical inquiries to which the 1 of Regulation (Euratom, ECSC, EEC) Commission referred were conducted by No 1461/78 is repealed with effect from the Statistical Office in May 1976 in the 1 January 1978." province of Varese. An inquiry into rent levels was then taken into account. The ensuing report found that there was a difference of 8.5% between the That regulation was adopted in the weighting for Italy, calculated for Varese following circumstances: by the Statistical Office to be (121.5 to the base 100 for Brussels) and the weighting for Italy adopted by the Council (112.04 to the base 100 for The fall in the value of the Italian lira Belgium). Of that 8.5%, 6.7% was which depreciated rapidly at the end of attributed to the widening gap between 1975 and the beginning of 1976 and the the cost of living index in Italy and monetary measures taken by the Italian Belgium from December 1975 to June Government as a result brought about 1976. According to the Statistical Office strong inflationary pressure. It led the approximately 2 % could be attributed to staff representatives at Ispra to submit a the difference in price levels between the number of pay demands based on their Varese and Rome regions. claims that the weighting for Italy no longer reflected the widening gap between the cost of living in Brussels and Ispra and that the weighting calculated On 21 December 1976 the Council according to the "Fisher" method led in adopted Regulation No 3177/76 particular to a large gap between the par (Official Journal L 359, p. 1) which from value of the lira in relation to the Belgian 1 July 1976 fixed the weighting at 189.3 franc on the currency markets and the for Italy as against 157.8 for Belgium equivalent value in lire of the re­ and from 1 January 1977 at 120 for Italy muneration paid to officials at Ispra and considerably reduced the external pur­ as against 100 for Belgium. chasing power of the remuneration.

President of that institution on 23 May submit to the Council a proposal based 1976. The staff representatives ques- on these points: tioned the statistical method used to fix the weighting and sought to have it amended. They considered the large gap between the purchasing power parities — The 1967 list of consumer goods to and the monetary parities of remuner- be brought into line with that used ation paid in lire to be incompatible with for the 1975 inquiry; the principle of the equal treatment of officials. That was the result in particular of the fact that prices of imported goods react very much more quickly to the appreciation of a currency on the — The prices adopted in 1975 to be currency markets than the general price adopted and extrapolated to 1978 level. Equality of treatment in regard to using common indices (namely for pay can be attained only by reference to Rome and Brussels); a common European “basket” of goods and services which are qualitatively and quantitatively identical. The Commission representatives rejected that basis of — Justification of the use of those prices reference but they did agree that the by the need to introduce a system purchasing power parities used to enabling weightings to be regularly calculate the weighting might present adjusted. some distortion. By a telex message of 12 December 1977 the staff representatives asked the member of the Commission responsible for administrative matters, Mr Tugendhat, to make representations to the Council in order to have the The Commission representatives said weighting for 1977 acknowledged to be that the method proposed should apply provisional. to the weighting as from 1 January 1978 while the staff representatives believed there was justification for applying it from an earlier date and reserved their freedom of action before the Council on In May 1978, in addition to an this point. They also pointed out that adjustment of the weightings to the some disparity still remained owing in increased cost of living, the Commission particular to the differences in prices proposed to the Council a supplementary between Rome and Varese. increase of 5% in the weightings for Italy, the United Kingdom and Ireland.

After the adoption on 21 December 1978 vantages, which could have been to some of Regulation No 3087/78, in January degree offset by the advantages of the 1979 the administration of the method previously applied, remained. Commission calculated and paid the Those disadvantages stem for example arrears due in respect of the period from from the fact that in Italy property values 1 January 1978 to 30 June 1978. At the do not increase in the same way as in the same time there were paid the arrears Federal Republic of Germany or from due in respect of the period from 1 July the fact that officials employed in Italy 1978 to 31 December 1978 under have to use a bigger portion of their Council Regulation No 3084/78 of salary to purchase currency if they do 21 December 1978 adjusting the re­ not wish to spend their holidays in Italy. muneration and pensions of Officials and Other Servants of the European Communities and the weightings applied If an official had to change a part of his thereto (Official Journal L 369, p. 1), remuneration, say 35%, into German which fixed the weighting for Italy at marks at a bank, a servant employed at 146.8 with effect from 1 July 1978. Ispra obtained 34% less in January 1976 and in March 1979 3 5 % less than his colleague in Brussels.

Under the new system the figures are : salary to a country other than that in which they were employed. — Net salary BFR 73 419 The applicant's complaint was received — Paid LIT 796 370 at the Commission on 21 January 1979. — Transfers: (BHW) DM2 020.00 On 28 September 1979 the Commission (Others) DM 1 803.38 replied to the complaints of 21 June 1979 and once again to the complaints of 11 — Sum in lire LIT 1 120 595 April 1979. — Total sum LIT 1 916 965 This application was submitted and On 15 April 1979 the loss was: received at the Court on 11 October 1979 at the same time as 199 other — Total sum LIT 467 755 parallel applications (Cases 530 to — Of total salary 24.4% 729/79 and 781/79). — Of March salary 37.0% It was subsequently decided that this case should become a test case. 3. Written procedure By a letter of 27 December 1979 the applicant amended his application to By identical complaints submitted under challenge in addition to the salary Article 90 (2) of the Staff Regulations a statement for April 1979 that for January large number of officials at Ispra made 1979. objection to a -.reduction of approxi- mately 26% in their actual remuneration By a letter of 8 February 1980 the which they claimed was the result of the Commission submitted its observations application of Regulations Nos 3085 and on the amendment of the application 3086/78. They claimed that those regul- contending that the time-limit for ations were unlawful and that Regulation bringing an action against the statement No 3087/78 had not been given of 15 January 1979 had expired in sufficient retroactive effect and asked for October 1979. measures to be taken to make up for the loss in purchasing power which they In its rejoinder of 19 June 1980 the claimed had taken place in 1976 and Commission withdrew that objection. 1977. On hearing the report of the Judge- Rapporteur and the views of the The applicant sent his complaints to the Advocate General, the Court (First Commission on 27 March and 11 April Chamber) decided to open the oral 1979. procedure on admissibility without any preparatory inquiry. On 12 July 1979 the Commission rejected his complaints. II — Conclusions of the parties By fresh complaints submitted in June 1979 and identical in form a large 1. The applicant claims that the Court number of officials at Ispra objected to should: the application to their remuneration for April 1979 of Regulations Nos 3085 and I. As against the first defendant: 3086/78 and the updated exchange rates fixed by those regulations and to the 1. Declare unlawful and annul the changes in the method whereby officials salary statements issued by the transferring a part of their monthly first defendant for January and

3. In the alternative to 2. above, rule that the applicant is entitled to 7. In the alternative to 6. above rule remuneration which also takes that the applicant is entitled to account of the purchasing power remuneration which, after trans­ of the Italian lira in the province fers of the same amounts in of Varese from the time at which accordance with Article 17 of the applicant was posted to Ispra, Annex VII to the Staff Regu­ but from no later than January lations, leaves a disposable 1976; amount in lire corresponding to the amount in lire which the applicant had until March 1979, 4. In the alternative to 2. and 3. rule with of course an adjustment to that the applicant is entitled to the new legal situation arising out of Council Regulations Nos 3085 remuneration which takes account and 3086/78 having to be made of the purchasing power of the during a transitional period from Italian lira, taking Rome as the actual increases in salary in the base, from the time at which the future, but not from adjustments applicant was posted to Ispra, but on the basis of Articles 64 and 65 from no later than January 1976; (1) of the Staff Regulations;

5. Rule that from and including April 1979 the applicant has 8. As a final alternative to 6. and been entitled to remuneration 7. above rule that the applicant is entitled to remuneration in corresponding to at least what he accordance with Article 4 of was paid in Italian lire up to and Council Regulation No 3985/78; including March 1979 after making the same transfers under Article 17 of Annex VII to the 9. Rule that the first defendant must Staff Regulations as up to March correct the applicant's statement 1979 but increased by the in accordance with the obligations percentage of the salary under 2. to 8. above and pay the adjustment applied from April ensuing increased amount;

2. Order the applicant to bear the costs. 2. Order the defendants to pay the costs. In his observations on the Council's application the applicant claims that the The Commission contends that the Court Court should : should: — Dismiss the Council's application for a preliminary ruling on admisibility I. 1. Reject the conclusions as and only consider the admissibility of inadmissible as against the the application together with the Commission in so far as they substance as a whole. directly or indirectly challenge the correctness of the weighting for Italy applied to the applicant's salary statements for January and Ill — Submissions and argu- April 1979 by alleging Council m e n t s of t h e p a r t i e s Regulation No 3087/78 of 21 December 1978 to be vitiated by a mistake; 1. In his application the applicant claims that his action is admissible for the following reasons : 2. Reject the rest of the application as unfounded as far as the — Jurisdiction of the Court: the acts Commission is concerned; adversely affecting him are Council regu- lations. But the Council acts on 3. Order the applicant to pay the proposals from the Commission which costs. may not claim that it merely applies the provisions adopted by the Council. However, the applicant considers the II. In the alternative to 1.1. grant leave primary act adversely affecting him to be for the Commission to give its views the salary statements for January and within a period to be fixed by the April 1979. As an incidental matter the Court on the question of the merits lawfulness of the provisions on which of the claims set forth above; they are based must be examined.

The applicant further relies on the principle of the equal treatment of officials. It follows from that principle — Interest in bringing the action: every that all officials in the service of the official has a right to protection and European institutions should receive the assistance (see Articles 24, 58 and 76 of same pay for the same work. In any the Staff Regulations). That represents a event it is not permissible for an official written and unwritten subjective right. at Ispra to be in effect treated worse than There should also be taken into his colleagues in Brussels or Luxembourg consideration Article 62 of the Staff just because he has to stay in Ispra and Regulations which contains the not Brussels or Luxembourg. There is no mandatory provision that an official may other reason however for the unequal not waive his entitlement to remuner­ treatment. Moreover acquired rights of ation. Conversely, the obligor vis-à-vis the applicant have been infringed as well. the official may not have the right to For many years he has received a salary withhold or reduce the amount of an on the basis of valid provisions of official's remuneration. From Article 64 Community law. It was the adjustments of the Staff Regulations, which deals in 1978 which first diminished his

JUDGMENT OF 12. 11. 1981 — CASE 543/79

BIRKE ν COMMISSION AND COUNCIL

9/75 Meyer-Burckhardt [1975] ECR Article 188 of the EAEC Treaty. The 1171) as regards actions for damages applicant is therefore entitled to base his between the Communities and their claims for damages on the latter and in servants justify its conclusion that the so doing he is not obliged to fulfil the action for damages is not inadmissible conditions laid down by Article 91. for the same reasons as those in the case of an action for annulment brought pursuant to Article 91 of the Staff Regu

To objection of illegality is merely an preclude actions against the Council to incidental remedy the effects of which establish liability for a wrongful act or are limited. The Court has already stated omission on its part would amount in that the annulment of an individual many cases to excluding altogether any decision based on the finding that the judicial remedy for officials, aimed at general decisions on which it is based are obtaining compensation for the damage defective affects the consequences of the they have suffered. general decision only in so far as the latter are given specific expression in the individual decision which has been

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claim set out in I. 1. of the application in objecting to the statement for January so far as the salary statement which it 1979 concerned only the arrears granted issued is challenged on the ground that pursuant to Regulation No 3087/78 in the calculation of salary shown therein respect of the period from 1 January made on the basis of the Council regu- 1978 to 30 June 1978 and only in so far lations is wrong in law. From the point as those arrears were due from 1 January of view of the requirements as to 1976. Since the periods laid down in the admissibility in disputes between the Staff Regulations for the lodging of administration and its staff, the claims complaints and appeals have expired, the put forward in 1.4. to 8, II and III statements for the months prior to April related to the dispute over the legality of 1979 are no longer subject to appeal. that measure do not give rise to any That, in the Commission's view, makes objection either, provided they refer to the submissions challenging the amount the alleged irregularity in that limited of weighting applied to the statement for way. April 1979 inadmissible.

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This is seen in particular As regards the claim for damages, the where a measure affects several persons Commission once again simply relies on and causes damage to only one of them. the inadmissibility of the claim for That person may seek damages for the annulment. Since the claim for damage caused even if an action for annulment is admissible that objection of annulment would achieve a similar result. the Commission cannot be upheld. The Apart from that, however, the measure applicant in addition asks the Court to remains in force.

in view. From that it follows that it is not complaint which makes the periods laid possible to claim in an action to establish down in Articles 90 and 91 of the Staff liability for a wrongful act or omission Regulations start to run afresh. The that which cannot be obtained in an case-law whereby the time for bringing action for annulment. The Court has in an action when the system of remuner- the meantime not followed that authority ation is revised starts to run from the either and now holds that an action for first monthly salary statement, if the

decision taken is clear from the relevant January 1976 and December 1977. notification of it, accords with the However, the applicant never lodged a requirement of legal certainty which is complaint against those statements in essential for the proper functioning of an 1976 and 1977, let alone an action. Had international organization which has the applicant gone to law and at that officials in more than 80 places of time obtained judicial recognition of the employment. That requirement does not rights which he now asserts, that would conflict with the need for officials to have had no effect on the statements have legal protection since they are given prior to the one contested. The full details about any such reforms of the Community institutions did not in the system of remuneration. If they do not exercise of their powers undertake a then take the opportunity afforded by reform of the system of remuneration the complaint procedure to obtain a legal because the system hitherto in force was remedy they may not invoke the ensuing illegal but because it was capable of loss of their right of appeal granted to being improved. The carrying out of a them by Article 91 of the Staff Regu­ legal reform of that nature is not a lations. That is particularly so if, as in sufficient ground for submitting to this case, a complaint is submitted and judicial review for the first time a state of the claim made therein is unmistakably affairs created by decisions which are no circumscribed and it does not later longer subject to appeal. In the accord with the claims made in the Commission's view that principle must application to the Court. The general apply where a legal reform has a limited inadequacy of the weighting which is retroactive effect as in this case. It is alleged in the application was not difficult to see why previous states of mentioned in the complaint of 21 June affairs to which a limited retroactive 1979 objecting to the salary statement effect does not apply should be treated for April 1979. The complaint objected differently from previous states of affairs only to the reduction of the disposable which are not covered by a legal reform amount of remuneration in lire which applying only to the future. stemmed from the reform of the transfer system provided for by Article 17 of Annex VII to the Staff Regulations. Therefore the proper preliminary procedure under Article 90 of the Staff Regulations which is required for the Court to rule on the substance has not taken place. IV — Oral procedure

3 In accordance with Article 17 of Annex VII to the Staff Regulations an official may have part of his emoluments transferred, either regularly or on an exceptional basis, to a country other than the one in which he performs his duties. Until 31 March 1979 Article 17 (4) provided that such transfers were to be made through the institution to which the official belonged "at the official exchange rate ruling on the date of transfer". The "official rate of exchange" within the meaning of that provision was the last parity accepted by the International Monetary Fund, which had not been altered since 1 November 1969 (for example, BFR 13.66 to DM 1).

4 On 21 December 1978 the Council adopted Regulation (Euratom, ECSC, EEC) No 3085/78 (Official Journal L 369, p. 6), Article 1 of which states that Article 63 of the Staff Regulations is replaced by the following:

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"Officials' remuneration shall be expressed in Belgian francs. It shall be paid in the currency of the country in which the official performs his duties.

Remuneration paid in a currency other than Belgian francs shall be calculated on the basis of the exchange rates used for the implementation of the general budget of the European Communities on 1 July 1978.

This date shall be changed, at the time of the annual review of remuneration provided for in Article 65, by the Council acting by a qualified majority upon a proposal from the Commission as provided in the first indent of the second subparagraph of Articles 148 (2) of the EEC Treaty and of 118 (2) of the Euratom Treaty.

— either in the currency of the Member State of which he is a national,

— or in the currency of the Member State in which either his own domicile or the place of residence of a dependent relative is located,

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— or in the currency of his previous country of employment or of the country in which his institution has its seat, provided that the official in question has been assigned to a post outside the territory of the European Communities;

(b) have regular transfers made in excess of the maximum stated at the beginning of paragraph (a) provided that they are intended to cover expenditure arising in particular out of commitments proved to have been regularly undertaken by the official outside the country where the institution has its seat or outside the country where he carries out his duties.

(c) be authorized, in very exceptional circumstances and for good reasons supported by evidence, to have transferred, apart from the aforementioned regular transfers, sums which he may wish to have available in the currencies referred to in paragraph (a).

10 From 1975 officials employed at the Joint Research Centre at Ispra complained to the Commission that the cost of living in Italy had considerably increased and accordingly requested the weighting for Italy to be revised. They complained in particular that in their opinion the cost of living at Varese was higher than in Rome and they urged the Commission to take account of that difference when fixing the weighting applicable to their remuneration.

11 In 1976, 1977 and 1978 consultations on technical matters took place between representatives of the staff and those of the Commission and Council but no agreement was reached on the amount by which the weighting should be increased or on the date to which it should have retro­ active effect. In the meantime by a series of regulations the Council had increased the weighting for Italy as from 1 January 1976 to 176.6 as against 157.8 for Belgium, as from 1 July 1976 to 189.3 as against 157.8 for Belgium, as from 1 January 1977 to 120 as against 100 for Belgium, as from 1 January 1977 to 132.1 as against 104.5 for Belgium, and as from 1 July 1977 to 130.2 as against 100 for Belgium. In most cases those regulations had a retroactive effect of about six months.

12 On 26 June 1978 the Council adopted Regulation No 1461/78 (Official Journal L 176, p. 1) by which the weighting for Italy was fixed at 137.6 as against 102.3 for Belgium. The recitals in the preamble to that regulation state that "a decision on the Commission proposal for the correction of the weightings for three countries of employment will be taken only in the light of a study to be carried out by the Commission".

17 By a letter of 4 April 1979 the applicant submitted a complaint under Article 90 (2) of the Staff Regulations concerning the retroactive effect of the weighting for Italy resulting from Regulation No 3087/78. On 13 June the applicant submitted a complaint against the application of Regulations Nos 3085/78 and 3086/78 reflected in his salary statement for April.

18 By letters of 12 July and 28 September 1979 the Commission rejected those complaints.

19 The applicant thereupon brought this action against the Council and the Commission. In substance he asks the Court to:

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(1) Annul the salary statements for January and April 1979 and the decisions on his complaints in so far as they contain particulars of salary calculated on the basis of Council Regulations Nos 3085/78, 3086/78 and 3087/78;

(2) Declare that the applicant is entitled to remuneration which also takes account of the purchasing power of the Italian lira abroad as well as at Varese or, in the alternative, in the province of Varese or, in the further alternative, in Rome from the time at which the applicant was posted to Ispra, but from no later than January 1976;

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Article 91 of the Staff Regulations permits an action to be brought only against acts adversely affecting officials which can emanate only from the appointing authority.

22 In the second case an action for annulment cannot be founded on Article 146 of the EAEC Treaty. Regulations Nos 3085/78 and 3086/78 apply to all Community officials whereas Regulation No 3087/78 applies to all officials employed in Italy. Therefore it is not possible to contend that they are decisions addressed to the applicant or decisions of direct and individual concern to him although in the form of a regulation. The Council further- more claims that the action was not brought within two months of the publi- cation of the regulations in question as required by the third paragraph of Article 173.

23 The action for damages is not admissible either. According to the case-law of the Court, where such a claim originates in the relationship of employment between the persons concerned and the institution, it lies outside the scope of Articles 178 and 215 of the Treaty as far as its admissibility in particular is concerned.

24 The claim that the regulations are inapplicable appears to be founded on Article 156 of the EAEC Treaty which corresponds to Article 184 of the EEC Treaty. That provision enables any party to invoke before the Court the inapplicability of a regulation in proceedings in which it is in issue and in order to do so to plead the grounds specified in the first paragraph of Article 173 of the EEC Treaty. However, it is apparent from the decisions of the Court that a declaration of inapplicability under Article 184 of the Treaty is an incidental remedy of limited effect. The mere possibility of a declaration of inapplicability does not open the way to proceedings against the Council just because it is the institution which adopted the act alleged to be unlawful.

28 T h e applicant's claim for compensation seeks to obtain precisely the same results as those which he would obtain from the annulment of the regu­ lations. T h e C o u r t has held on a number of occasions, in particular in its judgment of 15 December 1966 (Schreckenberg, Case 59/65 [1966] E C R 543) that although a party may take action by means of a claim for compensation without being obliged by any provision of law to seek the annulment of the illegal measure which causes him damage, he may not by this means circumvent the inadmissibility of an application which concerns the same illegality and which has the same financial end in view. T h e claim for compensation is therefore inadmissible.

29 In the circumstances the application is inadmissible in so far as it is directed against the Council and must therefore be dismissed.

30 In its defence the Commission claimed the application to be inadmissible only in regard to some of the applicant's heads of claim. The Court (First Chamber) has decided not to rule on the questions of the admissibility of the application as directed against the Commission before the parties submit arguments on the substance and the documents relating thereto.

OPINION OF MR CAPOTORTI — CASE 543/79

Costs 31 Under Article 69 (2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs.

32 However, under Article 70 of the Rules of Procedure the costs incurred by the institutions in proceedings brought by employees of the Communities are to be borne by those institutions.

Delivered in open court in Luxembourg on 12 November 1981.

A. Van Houtte G. Bosco Registrar President of the First Chamber

OPINION OF MR ADVOCATE GENERAL CAPOTORTI

(see Case 167/80, [1981] ECR 1512)