C-166/82

composed of: J. Mertens de Wilmars, President, T. Koopmans, K. Bahlmann and Y. Galmot (Presidents of Chambers), P. Pescatore, A. O'Keeffe, G. Bosco, O. Due and U. Everling, Judges,

Advocate General: G. Reischl Registrar: H. A. Rühl, Principal Administrator

gives the following

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JUDGMENT

Facts and Issues

JUDGMENT OF 7. 2. 1984 — CASE 166/82

for by Law N o 306, was compatible with measures for putting an end to the the common organization of the market infringement and that, on the contrary, in milk and milk products was referred the text of the draft law entailed new, . to the Court of Justice by the Tribunale and more serious, unilateral action by Amministrativo Regionale per il Veneto a Member State interfering with the [Regional Administrative Tribunal for machinery for fixing the producer sale Veneto] under Article 177 of the EEC price for milk, the Commission once Treaty. By judgment of 6 November again requested the Italian Government, 1979 (Case 10/79 Toffoli ν Regione on 9 March 1982, to rectify the situation Veneto [1979] ECR 3301), the Court and allowed it a further period of one ruled that it was incompatible with the month in which to do so. common organization of the market in milk and milk products for a Member State to fix directly or indirectly the 9. By a letter of 15 April 1982 the producer price for milk. Italian Government replied to the Commission, stating inter alia that the alleged aggravation of the infringement, 5. Subsequently, on 26 May 1981, the referred to in the reasoned opinion of Commission delivered to the Italian 26 May 1981, was unfounded. Republic the reasoned opinion required by Article 169 of the EEC Treaty and requested it to comply with the opinion 10. Following that reply, the Com­ within a period of two months. mission brought the present action by an application lodged at the Court Registry on 4 June 1982. 6. By a telex message of 5 October 1981, the Italian Government informed the Commission that it undertook to lay 11. Upon hearing the report of the before the Italian Parliament a draft law Judge-Rapporteur and the views of the repealing Article 11 of Law N o 306 and Advocate General the Court decided to to replace Articles 11 and 12 with other open the oral procedure without any provisions. preparatory inquiry.

Law No 306/75, has failed to fulfil its that judgment and draws particular obligations under the Treaty establishing attention to the following passage: ". . . the European Economic Community; national legislation designed to promote and encourage, by any method, the establishment of a uniform producer price for milk, by agreement or by Order the Italian Republic to pay the authority, at the national or regional costs. level is, by its nature, outside the bounds of the powers given to Member States and runs contrary to the principle established by Regulation No 804/68, in The Italian Government contends that particular Article 3 thereof, of attaining a the Court should: target producer price for the milk sold by Community producers during the milk year on the Community market and on external markets." Reject the complaint that the defendant failed to adopt any measure capable of affording an effective guarantee that the system provided for by Article 11 of Law The Commission observes that, accord­ No 306/75 would not be applied ing to a consistent line of decisions by pending its formal repeal; the Court, merely to lay before the national parliament a draft law designed to repeal a national provision which is incompatible with the rules of Com­ Dismiss as inadmissible the applicant's munity law is not sufficient to prevent a request that the scope of the application State from failing to fulfil its obligations be extended to the "measures" whose in the future. It is necessary for the adoption was proposed to the Italian unlawful situation actually to be brought Parliament as a replacement for Articles to an end and for the obligations II and 12 of Law No 306/75, which are imposed by Community law to be fully due to be repealed. discharged. Member States may not plead provisions or practices existing in their internal legal orders in order to justify non-compliance, or belated compliance, with their obligations. However, according to the Commission, III — Submissions and argu­ the Italian Republic continues to keep m e n t s of t h e p a r t i e s Article 11 of Law No 306/75 in force and has failed to adopt any measure capable of affording an effective guarantee that it will not be applied pending its formal repeal. 1. In its application the Commission refers to the Toffoli judgment, mentioned above, in which the Court analysed the system introduced by Law N o 306/75 for fixing the producer sale price for Finally, the Commission observes that milk, in the light of the provisions the draft law laid before the Italian Par­ governing the common organization of liament for the purpose of replacing the market in that sector. The Article 11 is also inconsistent with the Commission refers to paragraph 11 of applicable rules of Community law.

2. In its defence, the Italian Govern- The Italian Government takes the view ment does not deny that Article 11 of that the measures proposed to the Law No 306/75 is incompatible with the national parliament for the purpose of relevant provisions of Community law. replacing Articles 11 and 12 of Law However, it emphasizes that the alleged No 306/75 will put an end to the infringement resides in the fact that it infringement. Nevertheless, it contends maintained in force Article 11 of Law that national measures which have been No 306/75 and failed to adopt any neither approved nor brought into force measure capable of affording an effective may not and should not be discussed in guarantee that the article would not be the context of the present case. applied pending its formal repeal. In laying the draft law before the national parliament, which is still in the process of examining it, its intention was indeed to 3. In its reply, the Commission points comply with the Commission's reasoned out that the Italian Government's opinion. defence confirms that the relevant legislative provisions are still in force, since the draft law which provides for their formal repeal is still being considered by the Italian Parliament. Furthermore, the provisions of Article 11 were, the Italian Government claims, only very rarely applied in practice, and the Ministry of Agriculture and Forestry, Moreover, the Commission claims that, after consulting the regional authorities contrary to the assertions of the Italian and trade organizations, has requested Government, the proposed measures for the regional authorities, as the addressees replacing Articles 11 and 12 do not fall of Article 11, to refrain from applying outside the scope of the present case. In it in future. The Italian Government its opinion, the action taken by a observes that, whilst it is true that the Member State in the course of an provisions, since they have not been infringement procedure such as the repealed, are still in force de jure, it is present, and in particular the action none the less incorrect to say that no taken in response to the complaints measure was taken to afford an effective contained in the reasoned opinion, forms guarantee that they would not be applied part of the causa petendi of the pending their formal repeal. application made under the second paragraph of Article 169 of the EEC Treaty. Such action is, it claims, nothing other than the manifestation, in the form of conclusive acts, of the State's legal opinion on the subject-matter of the In its reply to a question from the Court, proceedings; it is, indeed, a reply to the the Italian Government explained that legal arguments put forward by the the central and regional authorities had Commission both in its letter drawing agreed to refrain from applying the attention to the infringement and in its aforesaid Article 11. It admits that the reasoned opinion. agreement has no legal force and is not binding on the regional authorities. As far as the application of Article 11 in the past is concerned, the Italian Govern- The Commission maintains that, since it ment submitted to the Court a list of the is to be inferred from article 171 that the cases in which it had been applied. judgment given should eliminate any

5. In its reply to a question from the 4. In its rejoinder, the Italian Govern­ Court, the Commission stated that the ment observes that the present pro­ action is not exclusively concerned with ceedings are concerned with establishing Article 11. It repeated the quotation, whether the Italian Republic is still in cited earlier, from the Toffoli judgment breach of Community law inasmuch as it and observed that the application has failed to repeal, either de facto or de concerned all the provisions of Law No jure, the system for fixing the producer 306/75 — namely Articles 10 and 11 — sale price for milk laid down by Article which allowed for intervention by public 11 of Law No 306/75. The scope of the authorities designed to encourage the proceedings cannot be altered or determination, by agreement or by the extended by the Commission so as to authorities, of a uniform producer price encompass the draft law proposed by the for milk.

JUDGMENT OF 7. 2. 1984 — CASE 166/82

IV — Oral procedure represented by Gianluigi Campogrande, also acting as Agent, presented oral argument. At the sitting on 4 October 1983, the Government of the Italian Republic, The Advocate General delivered his represented by Ivo M. Braguglia, acting opinion at the sitting on 8 November as Agent, and the Commission, 1983.

Decision

1 By application lodged at the Court Registry on 4 June 1982, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty seeking a declaration that, by adopting and maintaining in force certain provisions of Law N o 306 of 8 July 1975 (Gazzetta Ufficiale della Repubblica Italiana N o 194 of 23 July 1975, p. 5012) on the formation of the producer sale price for milk, the Italian Republic had failed to fulfil its obligations under Regulation N o 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products (Official Journal, English Special Edition 1968 (I), p. 176).

5 In the meantime the Court, in reply to a question submitted for a preliminary ruling the Tribunale Amministrativo Regionale per il Veneto [Regional Administrative Tribunal for Veneto] in connection with a dispute concerning the application of Article 11 of the Law, delivered a judgment on 6 November 1979 (Case 10/79 Toffoli v Regione Veneto [1979] ECR 3301) in which it held that it was incompatible with the common organization of the market in milk and milk products established by Regulation Nó 804/68 for a Member State to fix directly or indirectly the producer price for milk. Paragraph 12 of that judgment reads as follows: "In sectors covered by a common organization of the market, a fortiori when that organization is based on a common price system, Member States can no longer take action, through national provisions taken unilaterally, affecting the machinery of price formation at the production and marketing stages established under the common organization. It follows that national legislation designed to promote and encourage, by any method, the establishment of a uniform producer price for milk, by agreement or by authority, at the national or regional level is, by its nature, outside the bounds of the powers given to Member States and runs contrary to the principle established by Regulation No 804/68, in particular Article 3 thereof, of attaining a target producer price for the milk sold by Community producers during the milk year on the Community market and on external markets."

JUDGMENT OF 7. 2. 1984 — CASE 166/82

6 Subsequently, the Commission delivered to the Italian Republic, on 26 May 1981, a reasoned opinion as provided for by Article 169 of the Treaty and requested it to comply therewith within two months. In its reasoned opinion the Commission refers to the aforesaid judgment, from which it quotes the passages cited above, and in conclusion states that the Italian Republic, by applying the machinery for fixing the producer sale price for milk set up by Law No 306/75, has failed to fulfil its obligations under the Treaty.

1 1 In its defence the Italian Government interpreted the Commission's arguments to mean that the Italian Republic had failed to fulfil its obligations because it continued to maintain in force Article 11 of Law No 306/75 and had not adopted any measure capable of affording an effective guarantee that the article would not be applied pending its formal repeal. In that regard the Italian Government stressed that the article had very seldom been applied in practice and that the minister responsible had, after consulting the regions and trade organizations, requested the regions not to apply it in future. It further contended that the draft law fell outside the scope of the present proceedings and should not therefore be discussed within the context thereof.

1 2 In its reply, the Commission made no comment on the Italian Government's description of the failure with which the Italian Republic was charged. On the other hand, the Commission maintained that the scope of the present action extended to the draft law laid before the Italian Parliament. It argued that the action taken by a Member State, during the infringement procedure, with regard to the matters covered by the procedure and the representations made in the reasoned opinion, formed part of the causa petendi of the application made under the second paragraph of Article 169.

13 In its rejoinder the Italian Government acknowledged that the Italian Republic had infringed Community law by adopting and formally main­ taining in force the system provided for by Article 11 of Law N o 306/75. However, it requested the Court to dismiss the remainder of the application as inadmissible.

18 On the other hand, the Italian Government's contention that the action relates solely to Article 11 of Law No 306/75, to the exclusion of any other provision of that Law, cannot be upheld.

19 According to the letter formally inviting the Italian Republic to submit its observations, the failure with which it is charged relates to "the measures contained in the Italian Law which provide for the fixing of regionalized milk prices". In both the reasoned opinion and the application to the Court,

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the Commission's conclusions refer to the "machinery for fixing the producer sale price for milk set up by Law N o 306/75" and, in the intro­ ductory sentence of the application, the Commission defines the subject- matter of the action as being the adoption and maintenance in force of certain provisions of Law N o 306 of 8 July 1975 concerning the formation of the producer sale price for milk". Even if those phrases fail to specify, as precisely as might have been wished, the provisions to which the procedure relates, they none the less suggest that the scope of the procedure goes beyond Article 11 alone.

20 It is true that, after the draft law had been submitted to the Commission, the discussions between the parties and the arguments put forward by the Commission centred on Article 11 and on the amendments which the draft was designed to make to that article. However, the reference which not only the reasoned opinion but also the application makes to the judgment of the Court of 6 November 1979, in particular the quotations from the decision, demonstrate that the action is not concerned solely with the fixing of prices by public authorities under Article 11 but extends to the other provisions of the Law in question in so far as they are intended to promote and encourage the establishment of a uniform price by agreement.

24 It follows from that interpretation that Article 11 of Law N o 306/75, which provides for the fixing of a uniform producer price for milk by a committee appointed by order of the Chairman of the Regional Authority concerned, constitutes an infringement of Community law. It should be added that neither the fact that the provision in question has only seldom been applied in practice nor the existence of an agreement between the central and regional authorities to desist from applying it is sufficient, as indeed the Italian Government itself has acknowledged, to put an end to the infringement.

25 On the same grounds, Community law prohibits any legislative measure which provides for any intervention whatsoever on the part of a public, national or regional authority with a view to promoting and encouraging the establishment by agreement of a uniform producer price for milk. Such is indeed the case with Article 10, which provides for the convening of the parties by the Regional Authority and requires publication of the price agreed upon in the Regional Official Gazette.

26 It must therefore be held that, by adopting and maintaining in force Law No 306 of 8 July 1975, the Italian Republic has failed to fulfil its obligations under Regulation N o 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products, in so far as Article 10 of the said Law provides that the Regional Authority is to convene the parties concerned with a view to negotiating the producer price for milk

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and that the price agreed upon must be published in the Regional Official Gazette and in so far as Article 11 provides that, in the absence of agreement, the price is to be fixed by a committee appointed by the Chairman of the Regional Authority.

1. Declares that, by adopting and maintaining in force Law No 306 of 8 July 1975, the Italian Republic has failed to fulfil its obligations under Regulation No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products, in so far as Article 10 of the said Law provides that the Regional Authority is to convene the parties concerned with a view to negotiating the producer price for milk and that the price agreed upon must be published in the Regional Official Gazette and in so far as Article 11 provides that, in the absence of agreement, the price is to be fixed by a committee appointed by the Chairman of the Regional Authority;

O P I N I O N O F MR REISCHL — CASE 166/82

2. For the rest, dismisses the application as inadmissible;

3. Orders the parties to bear their own costs.

M e r t e n s de Wilmars Koopmans Bahlmann Galmot

Pescatore O'Keeffe Bosco Due Everling