C-1253/79

JUDGMENT OF 4. 2. 1982 — CASE 1253/79

so long as changes made are of the Treaties, such as Article 24 of method rather than of substance. the Merger Treaty, relating to the 2. Since the Economic and Social adoption of Community regulations. Committee and the Court of Auditors 3. Article 110 of the Staff Regulations of are not shown in the Treaties as Officials which imposes the obligation institutions of the three Communities to consult the Staff Committee applies it follows that consultation with the only to the general provisions for Economic and Social Committee and giving effect to the Staff Regulations the Court of Auditors is not manda- by each institution. Consultation with tory when a regulation amending the the Staff Committee is not therefore Staff Regulations of Officials is necessary for the adoption of a regu- adopted. Although, according to the lation amending the Staff Regulations. second paragraph of Article 1 of the Staff Regulations, the Economic and 4. Discrimination consists of treating in Social Committee and the Court of an identical manner situations which Auditors are treated as Community are different or treating in a different institutions for the purposes of the manner situations which are identical. Staff Regulations that treatment, the The situation of a serving official object of which is to ensure that the differs considerably from that of a Staff Regulations are applied to the pensioner, so that there is no discrimi- officials and other servants of those nation in a case where the two bodies and to identify the Community legislature accords to appointing authority for those pensioners treatment which is not employees, does not however extend identical to that applied to serving to the application of the provisions of officials.

APPLICATION in the terms set out in the pleadings,

THE 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

JUDGMENT

been altered since 1 November 1969 (for country of origin or of that of the seat of example, BFR 13.66 = D M 1). the institution to which they belonged. This state of affairs was condemned by Mr Advocate General Mayras in his After the collapse in 1971 of the inter- opinion in Case 28/74 Gillet [1975] national system of fixed exchange rates, ECR 475. which is at the heart of those provisions, the parities came to reflect less and less the purchasing power of the currencies In 1974 the Commission submitted involved and their value on the inter- proposals to the Council with a view to national money market. Officials who abolishing the anomalies in the rules had transfers made to countries the value governing the payment of remuneration of whose currency had increased in and pensions brought about by the relation to the parities notified to the break-down in the international system International Monetary Fund were thus of fixed exchange rates. able to realize gains on the exchange rate, as compared with transfers made in The proposal for a Council regulation normal market conditions. amending the Staff Regulations of Officials, submitted to the Council by the Commission on 13 June 1974 In accordance with the legal position (Official Journal 1974, C 88, p. 25) existing prior to 1 April 1979 the provided for an amended version of weighting provided for in Article 64 of Article 17 (4) of Annex VII to the Staff the Staff Regulations to reflect the living Regulations : standards at the place where the official performed his duties had to be applied to the whole of the remuneration, including "Transfers provided for in paragraphs the p a n to be transferred to another (2) and (3) shall be made on the basis of country pursuant to Article 17 of Annex the par values referred to in the last

If they C 99, p. 5). That proposal was rejected declared their domicile to be in a by the Staff Regulations Committee, to country whose currency had diminished which it had been referred. The Council in value, the weighting in respect of that obtained the opinion of the European country was applied to their pension in Parliament and of the Court of Justice. accordance with Article 82 (1) of the By resolution of 7 July 1977 (Official Staff Regulations. Article 45 of Annex Journal C 183, p. 55), the Parliament VIII to the Staff Regulations gave them approved the proposal taking note of the opportunity of having their pensions "the Commission's assurance that its paid in the strong currency of their proposal will in no way affect the real

The . . . regulation should come into effect on 1 January 1979, ... and should apply from 1 April 1979. However, for pensioners in receipt of allowances whose net financial benefits will be less The Council did not succeed in 1978 in than those under the existing arrange- adopting the regulation proposed by the ments, the regulation will apply only Commission on 6 October 1976 (Official from 1 October 1979 . . . " Journal C 271, p. 5) "on the procedure for applying the European unit of account (EUA) to the legal acts adopted by the institutions of the European Communities". The Commission there- fore set to work to bring up to date, in (b) On 21 December 1978, the Council the light of the situation thereby created, adopted Regulation No 3085/78 the exchange rates in respect of remun- (Official Journal L 369, p. 6), amending, eration for officials which was envisaged with particular reference to the monetary by the proposal of 1 April 1977. In an parities to be used, Regulation N o annex to its report in 1978 on the yearly 259/68 laying down the Staff Regu- survey of the level of remuneration (Doc. lations of Officials of the European COM(78) 6735 final of 29 November Communities and the Conditions of 1978), the Commission sent the Employment of Other Servants of the following communication to the Council Communities, Regulation N o 2530/72 on which neither the Parliament, the and Regulation N o 1543/73 concerning Court of Justice or the Staff Regulations certain special measures. The regulation Committee was consulted: embodies the wording of the communi-

cation from the Commission of 2. Facts and procedure 29 November 1978 and also the formula contained in the proposal of 1 April 1977 concerning the weighting to be applied to amounts transferred. The regulation fixes 1 July 1978 as the relevant date for The applicant complains that the calculating remuneration paid in a transfers pursuant to Article 17 of Annex currency other than Belgian francs on VII, made at his request through the the basis of the exchange rates used for institution, have become more expensive. the implementation of the general budget For example, in the case of a transfer of of the Communities and goes on to state D M 1 000 made on behalf of an official that that date shall be changed at the employed in Italy, for which in March time of the annual review of remuner- 1979 the exchange value at the old ation. exchange rates was LIT 170 750 ( D M 1 = BFR 13.66 and LIT 100 = BFR 8) — this was deducted from the remuneration actually paid in March to the person concerned in Italy — in April the (c) Hand in hand with the bringing up exchange value was LIT 293 111, on the to date of the exchange rates, the basis of the new exchange rates provided Council adopted Regulation No 3086/78 for in Article 63 of the Staff Regulations of 21 December 1978 (Official Journal (LIT 1000 = D M 2.43) and of the L 369, p. 8) adjusting the weightings adjustment resulting from application of applicable to the remuneration and pensions of Officials and Other Servants the weighting 1.4040 ( = 98.7/ ) corre- of the European Communities following 70.3 the amendment of the provisions of sponding to the ratio between the new the Staff Regulations concerning the weighting for Germany (98.7) and the monetary parities to be used in new weighting for Italy (70.3). Thus, for implementing the Staff Regulations the same transfer of D M 1 000 a which amended the value of the deduction of LIT 293 111 (LIT 122 361 weighting according to the various places more than the previous deduction) was of employment, in such a way that every made from the remuneration paid to official or temporary employee employed the person concerned at his place of elsewhere than in Belgium or Luxem- employment for the month of April. bourg received the same level of re- muneration in April 1979 as his re- muneration for the preceding month. Since the point of departure — the In the case of the applicant, an official in amount of the remuneration in Belgian Grade C 1, Step 8, whose total re- francs — remained in effect ex hypothesi muneration is LIT 1 738 225 (pay the same, as regards payment statement for April 1979) and whose transactions, and the end of the monthly transfers corresponded to D M procedure — calculation operations of 407, FF 4 788 and BFR 4 281, the the amount of the payment in national increased cost of the transfers amounted currency — ought itself normally to to: remain the same, therefore as soon as one of the parameters of payment, for example the exchange rate, was altered, LIT 889 995 (April exchange value of it was then necessary to adjust the the transfers) second parameter (weighting) in such a way as to ensure the neutrality of the transaction. LIT 661 712 (March exchange value)/ LIT 228 183

1. Declare null and void the decisions Order the applicant to pay the costs; adopted by the defendant, the practical effects of which are to be Subject to all necessary reservations. found in the applicant's pay statement for April 1978 (and, so far as necessary, subsequent statements) and 3. In his reply, the applicant claims that stem from the application of Regu- the Court should: lations Nos 3085 and 3086/78 of the Council of Ministers; In the alternative, appoint a panel of experts who would be instructed to 2. Rule that Regulations Nos 3085 and advise the Court, on the basis of such 3086/78 of the Council of Ministers information as the parties may be obliged are inapplicable pursuant to Article to give it, regarding the consequences for 184 of the EEC Treaty, Article 156 of officials and servants of the introduction the EAEC Treaty and the third of the amendment to Article 17 of Annex paragraph of Article 36 of the ECSC VII to the Staff Regulations as it appears Treaty; in Regulation N o 3085/78.

JUDGMENT OF 4. 2. 1982 — CASE 1253/79

In any case, it is incumbent upon The first argument put forward by the the Commission to ensure that applicant is based on breach of the implementation of the regulations principle of vested rights. The basis of submitted by it to the Council and the second argument is that, by adopted by the latter is not detrimental drastically amending the conditions laid to officials and servants. In the discharge down in the Staff Regulations, so as to of its duty to assist officials (Article 24 of bring about a considerable reduction in the Staff Regulations) it was therefore the net remuneration received by officials under an obligation to lay down by way and servants, the Commission radically of implementing measures transitional altered the whole structure of the procedures for providing compensation, Staff Regulations and undermined which should be coterminous with the fundamental conditions in such a manner legal and contractual obligations of the

BATTAGLIA v COMMISSION

As regards the allegation of insufficient consultation, the Commission observes that the applicant's view would be well founded if, after a first proposal from the The Parliament was certainly not led Commission was put forward and before into error but acted in full knowledge of the Council adopted any decision on it, a the circumstances. It is in fact quite clear quite new proposal was submitted, that is from its opinion that it was perfectly to say one concerning other matters or aware that the proposal for updating of making substantial amendments (cf. a the rates related also to transfers and contrario Case 41/69 ACF Chemiefarm that the consequence thereof would be [1970] ECR 661). In the same way, the an increase in the cost of such consultation procedure provided for in transactions when the country of Article 10 of the Staff Regulations does destination was one with a strong not have to be repeated every time a currency. Nevertheless, its opinion was minor alteration is made. In this case, by that it was "appropriate . . . to abandon

JUDGMENT OF 4. 2. 1982 — CASE 1253/79

the exchange ratios introduced in 1965," right to make transfers arose after the since the proposed updating would not Staff Regulations were amended. have the result of "affecting the rights of staff." It is wrong to claim that the assurances given regarding the "financial neutrality" of the operation extended also to the consequences of the updating of the rates for transfers.

BATTAGLIA v COMMISSION

of Annex VII, since transfers of a part of amount paid in Belgian francs or officials' remuneration, although within German marks in respect of the pension. the limits laid down in a "code of good On the other hand, in the case of serving conduct" established in June 1974, officials, the increase in the amount of became a means of obtaining "strong funds required for the transfers is currencies" at a rate much lower than nowhere near that proportion since at the market rate, with consequent adverse the most only 3 5 % of remuneration may effects on the Community budget. be transferred. In extreme cases, those of transfers to Germany of 3 5 % of the remuneration for March of an official employed in Italy, the increased cost of the transfer might at the most be around The staff could not have been under any 2 5 % of the total remuneration for April. misapprehension any more than the Par- liament as to the practical repercussions on transfers of the updating of exchange rates. An administrative circular dis- tributed in May 1978 drew attention to As regards the circular laying down "the disappearance of certain advantages detailed arrangements for transfers of now available" in that area and indicated part of the emoluments of officials that the transfers would thereafter be (Administrative Notice N o 230), it was made on the basis of the value of the not intended to avoid an increase in the European unit of account, giving an cost for certain officials of making such example of the results of the calculations. transfers and it did not in fact do so; its It was therefore out of the question to object was to enable all officials to conclude that the operation would be continue to transfer the same nominal absolutely neutral from the financial amount of foreign currency as pre- point of view, since the object was to viously. The applicant therefore has eliminate unjustified advantages in the nothing to gain by criticizing that future. provision, which is not in any way detrimental to him.

authority responsible for the Staff Regu- strong currency, and in particular the lations to enact with immediate effect Federal Republic of Germany, an official provisions adopting those regulations to would suffer a loss of 4 2 % on the economic realities. transferable 3 5 % of his salary. It cannot therefore, in the last analysis, be admitted that Mr Tugendhat's statement 3. In his reply, the applicant observes on the "neutrality" of the operation does that the text of Article 24 of the Merger not extend to the sphere of transfers, Treaty refers to the institutions when it is known that the expenses in "concerned" and not to the institutions respect of health, investment and savings as listed in the Treaties, the reason being by European officials are the result of that where decisions relating to staff are commitments specifically referred to in concerned it is appropriate to consult all the measures implementing Article 17 of the "institutions" which employ officials; Annex VII. Moreover, consideration of this applies to the Economic and Social the resolution embodying the opinion of Committee and the Court of Auditors. the Parliament is sufficiently explicit both Furthermore, although in form the regu- as to the intentions of that institution lation is a measure falling solely within and as to the information which was the Council's area of responsibility the given to it. fact remains that since Article 110 of the Staff Regulations provides that the Staff Committee must be consulted on the After indulging in a long inventory adoption of general implementing of international and Community legal measures within each institution, the theory and case-law, the applicant asserts same must a fortiori apply to a measure that the European institutions them- such as the amendment of the Staff selves, whilst rejecting the theory of Regulations which in principle is much vested rights, consider that the right of wider in scope. the authority responsible for the Staff Regulations unilaterally to amend those regulations does not extend so far as to The Parliament was not consulted on all enable it to reduce the emoluments of the new provisions.

the question of transfers. The table emoluments, as a whole, would not annexed to the report, if indeed the Par- diminish. H e might also have considered liament has examined it, gives a partial, that if the transfers constituted a system and indeed biased, view of matters. The making it possible to compensate for the Parliament was never aware that, as disadvantage which the application of regards transfers to countries with a Article 63 involved for him with respect

to the remaining 6 5 % of his salary, the for a period fixed at five years (cf. compensation would not be discontinued Administrative Notice N o 230 referred without some other form of offsetting to by the Commission, instead of N o measure being substituted for it. In the 233, in which the measure referred to by Commission's view, the texts of the Staff the applicant with regard to the second Regulations of the Communities include part of the submission is indeed provisions which are superfluous or go included).

equality, the submission is not intended consultation with the Staff Committee, in to secure cancellation of the measures addition to the fact that there are six adopted in favour of pensioners. The such committees, that is to say one for applicant does not think, however, that each institution, consultation is optional any justification for the discrimination and may not relate to amendment of the may be reasonably inferred from the real Staff Regulations. There can be no objective situations of the two groups of question therefore of any omission of officials.

3085/78. A comparison between the The grant of compensatory measures previous situation and that which would may be explained by the fact that the have resulted from adoption of the Commission's responsibility was incurred proposal for the introduction of the at the highest level, since the amendment European unit of account is of no of which the applicant complains was in interest in this case. fact prepared by its officials, was then presented to the Parliament and was finally submitted to the Council as a The Court has just made clear in two neutral measure, which it was not. The recent judgments, of 29 October 1980 applicant does not ask for the benefit of (Case 138/79 Roquette [1980] ECR 3333 a guarantee ad vitam aeternam but within and Case 139/79 Maizena [1980] ECR the framework of his claims submitted in 3393), how far the obligation to consult the alternative (see above). Moreover the the Parliament extends; in the Court's Commission understood perfectly that it view, compliance with that obligation had to take measures of that kind, a fact "implies that the Parliament has evidenced by the measures relating to expressed its opinion"; in other words, persons treated as dependent children, once the Parliament's opinion has been

given, as in this case, the argument based defendant did not in any way wish to on the omission of essential procedural indicate that Article 17 of Annex VII requirements cannot be sustained. constituted a source of abuse ab initio but rather that the provision had become The amendment complained of did not open to abuse following developments in in any way lead to a decrease in officials' the monetary market. total remuneration; its only result was to render more costly a facility provided for N o document submitted by the Com- in the Staff Regulations; by analogy, mission to the professional and trade- would the applicant maintain that union organizations has ever contained a officials' remuneration would be cut if general clause regarding financial the Commission increased the rates for neutrality. the building loans granted by it? The alleged superior principle of law relied upon with regard to the concept of The situations of pensioners and of vested rights is unknown in the various serving officials are not comparable national laws relating to the public and the considerable difference in the service or in international organizations financial impact as between them or in Community law. It is true that a constitutes an objective criterion on the system of compensatory measures was basis of which those two staff categories introduced when certain amendments may have (temporarily) different con- were made to the Staff Regulations ditions applied to them. involving a reduction in pecuniary rights. However, in those cases it was merely a question of appropriateness and not of As regards the grant of compensatory any legal requirement. measures applied for by way of alter- native claim, that is to say, a claim on When he entered the service, the the assumption that the amendment in applicant could not have inferred from question is perfectly legal, in what way is the Staff Regulations any certainty that the Commission's action in taking the the "official rate" would remain initiative regarding a procedure, which unchanged for transfer purposes year resulted in a regulation which is legal in after year, even though it might diverge every respect, improper and thus a basis to a considerable extent from the parities for liability? A broad interpretation of ruling in the market. The considerations the duty of assistance would result in which might have influenced the suspending for many years the im- applicant's decision to agree to be bound plementation of an amendment to the by the Staff Regulations must be Staff Regulations which in any case had examined in the light of the circum- been recognized to be in order. stances prevailing when he entered the service; at that time, the so-called "disadvantages" relating to the non- transferable portion of 6 5 % of his salary IV — O r a l p r o c e d u r e did not exist.

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 that in which he performs his duties. Until 31 March 1979 Article 17 (4) provided that such transfers were to be made through the institution which he serves "at the official exchange rate ruling on the date of transfer". The "official exchange rate" 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 = D M 1).

4 On 21 December 1978 the Council adopted Regulation (Euratom, ECSC, EEC) N o 3085/78 (Official Journal 1978 L 369, p. 6). Article 1 of that regu- lation provides that Article 63 of the Staff Regulations is replaced by the following wording:

JUDGMENT OF 4. 2. 1982 — CASE 1253/79

"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.

(a) through the institution which he serves, regularly have part of his emoluments transferred up to a maximum amount equal to his expatri- ation or foreign residence allowance:

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

BATTAGLIA v COMMISSION

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,

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;

9 As from 1 April 1979 the cost of those transfers in Italian lire at the exchange rate calculated in accordance with the newly worded Article 17 (3) of Annex VII to the Staff Regulations, mentioned above, amounted to LIT 889 895.

10 On 21 June 1979 the applicant filed a complaint under Article 90 (2) of the Staff Regulations regarding the increase in the cost of transfers made by him as from April 1979. On 28 September 1979 the Commission replied by letter, to the effect that, on the one hand, it could not without exceeding its authority fail to apply Council regulations which had properly entered into force and, on the other hand, that in substance it approved the amendments made to the Staff Regulations.

1 1 The applicant therefore brought this action asking the Court (1) to declare void the decision adopted with regard to him, the practical effects of which are to be found in the pay statement for April 1979; (2) to rule that Regu- lations Nos 3085 and 3086/78 are inapplicable pursuant to Article 184 of the EEC Treaty, Article 156 of the EAEC Treaty and the third paragraph of Article 36 of the ECSC Treaty; (3) to rule that the decision expressly rejecting the applicant's complaint is void; (4) to declare that all sums payable in consequence of the annulments are to bear interest; and (5) in the alternative, to declare that it is incumbent upon the Commission to take all steps necessary to compensate for the effects of the said regulations.

12 The applicant relies in the first place on certain grounds based on an infringement of essential procedural requirements. H e maintains that the contested regulations were adopted without the prior consultation with the institutions concerned referred to in Article 24 of the Treaty of 8 April 1965 establishing a single Council and a single Commission of the European Communities (hereinafter referred to as "the Merger Treaty"). The

1 3 The applicant then puts forward arguments concerning the content and effects of the regulations. He criticizes the application of the regulations, maintaining that implementation of the new wording of Article 17 of Annex VII to the Staff Regulations breaches the principle of protection of vested rights; that since the change in the conditions laid down in the Staff Regu- lations involved a considerable reduction of the net remuneration received by officials it radically altered the scheme of the Staff Regulations and undermined the fundamental conditions which were of such a kind as to influence the applicant's decision to agree to be bound by the Staff Regu- lations; and that the application of the text was in breach of formal commitments entered into by the Commission to the effect that it would ensure that the measures proposed by it would be strictly neutral and would not affect the real value of payments made to officials in respect of their remuneration, pensions and allowances.

16 A distinction should however be made between the requirements of Community law applicable to Regulation N o 3085/78, which involves amendment of the Staff Regulations, and those applicable to Regulation N o 3086/78, which adjusts the weightings. A regulation such as Regulation N o 3086/78, which determines the weightings, is adopted by the Council on a proposal from the Commission pursuant to Article 64 of the Staff Regulations, which imposes no obligation involving consultation.

17 As regards Regulation N o 3085/78, it is true that Article 24 of the Merger Treaty provides for consultation with the other institutions concerned, one of those being the Parliament. That consultation, which in particular enables the Parliament effectively to participate in the Community's legislative process, is an essential feature of the institutional balance which the Treaties seek to achieve. Regular consultation with the Parliament constitutes therefore an essential procedural requirement, the disregard of which renders the regu- lation in question void. It is therefore appropriate to consider whether the required consultation in fact took place.

18 On 1 April 1977 the Commission, after giving notice to the Staff Regulations Committee, placed before the Council a proposal for a Council regulation introducing the European unit of account (EUA) into the Staff Regulations (Official Journal 1977 C 99, p. 5). Article 1 concerns substitution of the EUA for the Belgian franc in Article 63 of the Staff Regulations. The proposal incorporated the changes made necessary by the adoption of the EUA, in

Whereas following the introduction of the European unit of account, weightings will no longer be required to correct exchange parities and will henceforth be used principally to take account of increases in the cost of living, as originally intended;

Whereas the Commission has given assurances that its proposals will in no way adversely affect the remunerations and other allowances of officials and other servants of the European Communities;"

JUDGMENT OF 4. 2. 1982 — CASE 1253/79

20 The resolution asks the Commission to introduce, in good time, the administrative arrangements needed to ensure that the application of the European unit of account does not disrupt existing administrative practices or even temporarily harm the interests of the European Civil Service and notes the Commission'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.

21 In a communication to the Council dated 29 November 1978 the Commission expressed the desire that Article 1 of its proposal of 1 April 1977 should be amended. The text of the new proposal corresponds to the first two paragraphs of Article 63 as amended by Regulation No 3085/78. In the same communication, the Commission proposed a transitional period of six months, that is to say until 1 October 1979, for pensioners and recipients of allowances whose net emoluments would suffer a reduction following the updating.

22 Regulation N o 3085/78 followed that proposal from the Commission, adding, however, after the proposed transitional provision, a further transitional provision: "From that date the difference between the net amounts resulting from the implementation of this regulation and those received in September 1979 shall be reduced by 1 / 1 0 per month."

27 It is true that, according to the second paragraph of Article 1 of the Staff Regulations, the Economic and Social Committee and the Court of Auditors are treated as Community institutions for the purposes of the Staff Regu- lations. That treatment, the object of which is to ensure that the Staff Regu- lations are applied to the officials and other servants of those two bodies and to identify the appointing authority for those employees, does not however extend to the application of the provisions of the Treaties, such as Article 24 of the Merger Treaty, relating to the adoption of Community regulations.

28 As regards the argument that the Staff Committee should have been consulted, it is sufficient to point out that Article 110 of the Staff Regu- lations, which imposes the obligation to consult the Staff Committee applies only to the general provisions for giving effect to the Staff Regulations by each institution. Consultation with the Staff Committee is not therefore necessary for the adoption of a regulation amending the Staff Regulations.

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C o n t e n t and effects of the regulations

30 The applicant's arguments are based on the premise that he is entitled to have the exchange rate applied to transfers made pursuant to Article 17 of Annex VII to the Staff Regulations maintained at a level enabling him to receive, after making those transfers, a balance of remuneration in Italian lire equal to the amount he received in March 1979, at least until he is clear of the commitments he entered into before April 1979. It should, however, be noted that the exchange rates applied until April 1979 were particularly favourable to officials employed in countries with a weak currency. In fact, the weighting had been fixed so as to take into account the devaluation of the currency in the place of employment, and was applied to the remuner- ation in its entirety, whereas the transfers were made at the exchange rate for the year 1969. As from April 1979 remuneration was calculated on the basis of the updated exchange rates, so as to ensure that each official received the same total remuneration, expressed in national currency, as he received in March 1979. Transfers continued to be made at an exchange rate more favourable than the official rate, although less favourable than the rate previously used, this being achieved by application to the amount transferred of the weighting derived from the relationship existing between the

BATTAGLIA v COMMISSION

weighting fixed for the country in whose currency the transfer was made and the weighting fixed for the country in which the official was employed. This method of calculating the exchange rate was intended to enable an official employed in a country with a weak currency to make the transfers in question in respect of the same part of his total remuneration as an official employed in a country with a strong currency.

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34 On the other hand, after the amendment to the Staff Regulations resulting from Regulation N o 3085/78, it was possible to restore the proper function of the weighting, namely that of reflecting the living conditions in the various places of employment. Although the cost of the transfers was rendered less favourable, the system nevertheless continued to benefit officials employed in a country with a weak currency.

35 It appears therefore that even though there may be limits on the powers of the Community legislature to reduce the benefits enjoyed by officials under a system provided for in the Staff Regulations, the view that in this case those limits have not been observed cannot be upheld.

36 Furthermore the applicant maintains that the absence in the contested regu- lations of transitional provisions in favour of serving officials similar to those of which pensioners have the benefit breaches the principle of non-discrimi- nation.

37 In that respect, it is sufficient to point out that discrimination in the legal sense consists of treating in an identical manner situations which are different or treating in a different manner situations which are identical. The situation of a serving official differs considerably from that of a pensioner, so that there is no discrimination in a case where the Community legislature accords to pensioners treatment which is not identical to that applied to serving officials.

38 The same principle applies regarding the alleged discrimination arising from the fact that the Commission's decision to apply for a period of five years a special policy concerning the values to be taken into consideration regarding the cost of maintenance of persons treated as dependants (Administrative Notice N o 233 of 30 April 1979). The matter of transfers may not be treated on the same footing as the case of the persons referred to by that decision.

On those grounds,

T H E C O U R T (First Chamber)

hereby:

1. Dismisses the application;

2. Orders the parties to bear their own costs.

Bosco O'Keeffe Koopmans