C-351/85
ECLI:EU:C:1987:60
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FABRIQUE DE FER DE CHARLEROI v COMMISSION
OPINION OF MR ADVOCATE GENERAL DA CRUZ VILAÇA delivered òn 4 February 1987 *
Mr President, directed equally against Article 14 C of Members of the Court, Commission Decision No 3485/85/ECSC 3 of 17 November 1985 which extended the system of monitoring and production quotas 1. Two steel undertakings — one Belgian, for a further two years. Article 14 C corres Fabrique de fer de Charleroi SA, and the ponds to Article 14 D of Decision No other German, Dillinger Hüttenwerke AG 2760/85/ECSC, except for the third — seek the annulment of Commission condition of Article 14 D which was Decision No 2760/85/ECSC of 30 repealed. September 1985, ' which inserted Article 14 D in Decision No 234/84/ECSC of 31 January 1984 on the extension of the system of monitoring and production quotas for 7. According to the applicants, the certain products of undertakings in the steel Commission has merely maintained or 2 industry. confirmed the system established by the former Article 14 D, whilst mitigating the 2. Article 14 D provides as follows: conditions for its application in a manner which is likely to create even more serious distortions of competition to the detriment 'The Commission may grant additional of traders who are discriminated against, in supplementary quotas up to a maximum of so far as it no longer excludes the allocation 25 000 tonnes per quarter to an under of a supplementary quota where the under taking: taking concerned has received aid, two factors that were previously regarded as 3. (i) which is the sole undertaking in the incompatible. country in which it is situated;
4. (ii) which is confronted with exceptional 8. According to Fabrique de fer de difficulties, even after receiving a Charleroi, in the light of Article 58 (3) of quota supplement under the the ECSC Treaty, no genuine 'extension' of provisions of Article 14; the system of production quotas is involved, but only an amendment of that system. 5. (iii) which has not received aids under the provisions of Decision No 1018/85/ ECSC.' 9. The Commission objects to the applicants' request, which it regards as an A — Subject-matter of the application extension of the subject-matter of the proceedings that may involve consideration 6. In their replies, both of the applicants ask of the categories of aid permitted under the new Article 14 C and consequently of the the Court to treat their applications as extent of the fresh distortions of compe tition resulting from that provision. * Translated from the Portuguese. 1 — Official Journal 1985, L 260, p. 7. 2 — Official Journal 1984, L 29, p. 1. 3 — Official Journal 1985, L 340, p. 5.
OPINION OF MR DU CRUZ VILAÇA—JOINED CASES 351 AND 360/85
10. For my part, I am in favour of No 1243/85/ECSC and No 2760/85/ accepting the applicants' request. ECSC, was adopted with a view to permitting supplements to the production quota, and to that part of the quota which 11. Although it relates to an individual may be delivered in the common market, to decision, I believe that the precedent estab be granted when undertakings experience lished by the judgment in Alpha Steel· exceptional difficulties due to the level of constitutes an expression of the general the quarterly abatement rate set for certain principles of the proper administration of categories of products. Article 14 itself laid justice and of the rationalization of the down the criteria for fixing supplements of proceedings, which are also applicable in that kind. this case. It would be contrary to those prin ciples to oblige the applicants to make a fresh application against a provision which, adopted in the course of the proceedings, replaced the provision previously in force, 14. However, the Commission has taken whilst maintaining in substance the same the view, on a number of occasions, that system and entailing merely an adjustment those criteria do not permit account to be or a strengthening of the arguments put taken in all cases of the specific circum forward initially. stances of undertakings affected by the quota system so as to enable them to overcome the exceptional difficulties B — The contested decisions viewed in resulting therefrom or, in any event, to connection with the quota system achieve more successfully the objectives of that system in specific cases which may 12. In view of the crisis in the steel arise. That is why a number of additions industry, which became acute from 1975 were subsequently made to Article 14 of onwards, the Commission took action, at Decision No 234/84/ECSC, including first indirectly, to combat the effects of Article 14 D which laid down the new structural overcapacity of production. criteria permitting, under the conditions Accordingly, between July 1977 and June established by that provision, the grant of a 1980 delivery programmes were established quota supplement over and above the which the undertakings were requested to additional quota. As we know, Decision No apply. However, that indirect action proved 3485/85/ECSC repealed one of the to be inadequate and, for that reason, conditions laid down by Article 14 D for the Commission adopted Decision No the grant of a supplementary quota. 2794/80/ECSC of 31 October 1980, pursuant to Articles 47 and 58 of the ECSC Treaty, which established a system of production quotas as from 31 October 1980. C — Nature of the contested decisions and The quota system has been extended and admissibility of the applications amended on several occasions, in particular by Decision No 234/84/ECSC and, more recently, by Decision No 3485/85/ECSC.
15. (a) Neither Decision No 2760/85/ 13. Article 14 of Decision No 234/84/ ECSC nor Decision No 3485/85/ ECSC, subsequently amended by Decisions ECSC is directed at addressees who are identifiable and individually distinguished, 4 — Judgment of 3 March 1982 in Case 14/81 Alpha Steel v both decisions being couched instead in Commission [1982] ECR 749, at p. 763, paragraph 8 of the decision. general and abstract terms.
FABRIQUE DE FER DE CHARLEROI v COMMISSION
16. However, the applicants maintain — in annulment of the decision, without neces particular the applicant in Case sarily being the only or virtually the only 360/85 — that both of those decisions person affected. 5 conceal — as regards Article 14 D, and subsequently Article 14 C — a true indi vidual decision designed to promote a 22. So far as general decisions are Danish undertaking, Det Danske Stal- concerned, two conditions of admissibility valsevaerk (DDS), which, in their view, is are laid down by the second paragraph of the only undertaking able to benefit from Article 33 of the ECSC Treaty. the machinery embodied in that provision.
23. In the first place, it is necessary — but 17. Under the system established by the also sufficient — for the applicants to claim ECSC Treaty, the conditions for the formally that there has been a misuse of admissibility of applications for annulment powers and to rely on cogent grounds in lodged by legal persons against Commission support of that claim which will have to be decisions — which differ from the established only when the substance of the conditions of admissibility laid down by the case is considered. 6 second paragraph of Article 173 of the EEC Treaty — vary according to whether the decisions challenged are general decisions or 24. Secondly, the misuse of powers must individual decisions. affect the applicants. In my view, the Court's interpretation of that requirement is suffi ciently broad: there does not have to be a 18. As is well known, only undertakings 'false' general decision which deliberately and associations may submit applications of conceals an individual decision and that kind. applications against general decisions in the true sense are admissible where the applicant is the subject or at any rate the 19. However, they may challenge only indi victim of the misuse of powers alleged. 7 vidual decisions (and recommendations) concerning them or general decisions (and recommendations) which they consider to 25. The Court's recent judgments in Joined involve a misuse of powers affecting them Cases 140, 146, 221 and 226/82 8and in (second paragraph of Article 33 of the Case 250/83, 9 in which the applications ECSC Treaty). 5 — Judgment of 23 April 1956 in Joined Cases 7 and 9/54 Groupement des industries sidérurgiques luxembourgeoises v High Authority [1954-56] ECR 175, at p. 192; judgment of 15 July I960 in Joined Cases 24 and 34/58 Chambre 20. The Court has already clarified the syndicate de la sidérurgie de l'Est de la France v High conditions in which those requirements may Authority [1960] ECR 281, at p. 292; judgment of 23 February 1961 in Case 30/59 De Gezamenlijke Steenkolen- be regarded as satisfied. mijnen in Limburg v High Authority [1961], ECR 1, at pp. 16 and 17. 6 — Judgment of U February 1955 in Case 3/54 Assideri High Authority [1954-56] ECR 63, at p. 69; judgment of 16 July 21. So far as individual decisions are 1956 in Case 8/55 Fédération charbonnière de Belgique (Fédéchar) v High Authority [1954-56]ECR 245, at p. 257. concerned, they need not be addressed to 7 — Fédéchar, supra, at p. 257; however, for a somewhat more the applicant; it is sufficient if, though restrictive formulation, see the judgment of 9 June 1964 in Joined Cases 55 to 59 and 61 to 63/63 Ferriere di Modena addressed to another person, they affect the and Others v High Authority [1964] ECR 211, at p. 228. interests of the applicant ('concerning 8 — Judgment of 21 February 1984 Walzltahl-Vereinigung and them') in such a way as to enable him to Thyssen v Commission [1984] ECR 951, at pp. 982 to 984. 9 — Judgment of 15 January 1983 in Case 250/83 Finsider v show that he has a real interest in the Commission [1981] ECR 131, at pp. 150 and 151.
OPINION OF MR DU CRUZ VILAÇA — JOINED CASES 351 AND 360/85
were held to be admissible, would seem to countries concerned are Ireland, cited by show that the requirement in question has Fabrique de fer de Charleroi, and the not been interpreted restrictively. Netherlands and Luxembourg, cited by Dillinger Hüttenwerke. Ireland's steel undertaking does not manufacture products 26. The distinction between an individual subject to the quota system whilst the decision and a general decision is made, Netherlands' steel undertaking and according to the Court, 10 on the basis not Luxembourg's steel undertaking have not of the form but of the content and the scope obtained quota increases under Article 14 of of the measure. That is a distinction which, Decision No 234/84/ECSC. the Court has held, is important not only in order to determine the conditions of admissibility of an application but also to 30. The Commission challenges the define the range of arguments which the applicants' allegations on that point. applicants are entitled to put forward in Ireland's steel undertaking manufactures support of their claim. products that are subject to the quota system and the possibility cannot be ruled out in theory that the Netherlands' steel undertaking may experience exceptional 27. In this case, both of the applicants difficulties. The Commission does not contend that the contested decisions involve include Luxembourg amongst the three a misuse of powers. In their view, by countries with only one steel undertaking. providing for the grant of a supplementary quota over and above the additional quota to undertakings which satisfy the conditions of Article 14 D (subsequently Article 31. However, the applicants' argument is 14 C), the Commission sought not to supported by the reference to the Council's achieve the objectives of the ECSC Treaty, communication of 25 July 1985 which states specifically the protection of the common that the Council has given its assent to the market in steel during a crisis, but rather to Commission's proposal for a decision grant a quota supplement to the Danish amending Decision No 234/84/ECSC on steel undertaking DDS. the quota system 'for the benefit of Denmark's only steel producer'.
28. The Commission therefore attempted, 32. According to the applicants, even if the according to the applicants, to resolve a measure in question is regarded not as a particular case under cover of a decision disguised individual decision but as a couched in general and abstract terms. general decision, the provisions under consideration are still vitiated by a misuse of powers. 29. Proof of this is said to lie in the fact that DDS is the only undertaking in a position to benefit from the allocation of the 33. The applicants maintain that, in supplementary quota provided for in Article substance, by referring to an undertaking 14 D / C . There are other Member States of 'which is the sole steel undertaking in the the Community which have only one steel country in which it is situated' for the undertaking, but none of those undertakings purposes of guaranteeing 'supply as far as fulfils the other necessary requirements. The steel products are concerned', the Commission confers on a Member State the 10 — Judgments referred to in footnote 7, supra, at pp. 256, 227 and 228 respectively. right to ensure that it is supplied by a
FABRIQUE DE FER DE CHARLEROI v COMMISSION
domestic undertaking, contrary to the 38. Decision No 2760/85/ECSC was fundamental principles and objectives of the adopted at the end of September 1985 with ECSC Treaty and the basic rules of the a view to taking effect as from 1 July (one quota system. In an attempt to ensure the quarter), but at a time when its period of survival of an undertaking by the allocation validity had only three months still to run. of supplementary means and in order to enable it to overcome exceptional diffi culties, 11the decisions in question pursue an 39. It was quite clear that, as regards the aim which is incompatible with the objective first quarter, only DDS would benefit from laid down in Article 2 of the ECSC Treaty, the decision and it was in the light of the namely to secure 'the most rational distri interests of that undertaking that the bution of production at the highest possible Council gave its assent to the proposal for a level of productivity'. At the same time, decision, as if the latter were applicable to those decisions infringe the rules which DDS alone. require that sacrifices should be shared out equally amongst all the undertakings in the Community, regardless of their nationality 40. As regards the second quarter, the or their geographical location. Commission itself acknowledges, in its defence, that it was to be foreseen that no other undertaking would fulfil the 34. Ultimately, in seeking to ensure that a conditions laid down by Article 14 D domestic market is supplied by the only during the fourth quarter of 1985. undertaking established on it, the contested decisions contribute, according to the 41. This means that throughout its short applicants, to the disintegration of the period of validity, namely two quarters, it common market, which is manifestly was well known or it was anticipated that contrary to the fundamental principles only DDS would be able to benefit from governing that market. Decision No 2760/85/ECSC, and that is what happened in practice. 35. (b) My opinion on the preliminary issue now under consideration is as follows: 42. If that was the case, the decision which replaced it in respect of the subsequent 36. Articles 14 D and 14 C were added to, period must also be vitiated by the same or incorporated in, decisions whose defect. provisions are essentially of a legislative nature and are worded in such a way as to be capable of being applied to all under 43. That fact is so closely connected with takings which fulfil or may come to fulfil, at the substance of the case that, if considered present or in the future, the objective decisive, it would entail the annulment of conditions which they lay down. the decisions in question on account of a misuse of powers.
37. However, there is a small but significant set of circumstances which brings the 44. However, the Court has already 2 contested decisions 'dangerously' close to emphasized, on various occasions, 1 that being in the nature of individual decisions adopted in order to resolve the case of the 12 — Judgment of II July 1968 in Case 6/68 Zuckerfabrik Watenstedtv Council [1968] ECR 409, at p. 415; judgment Danish undertaking DDS. of 5 May 1977 in Case 101/76 Koninklijke Scholten Honig v Council and Commission [1977] ECR 797, at p. 808; judgment of 17 June 1980 in Joined Cases 789 and 790/79 11 — Sec the preamble to Decision No 2760/85/ECSC. Calpak vCommission [1980] ECR 1949, at p. 1959.
OPINION OF MR DU CRUZ VILAÇA —JOINED CASES 351 AND 360/85
'the nature of a measure as a regulation is II in respect of which the majority of the not called in question by the possibility of quotas allocated to DDS were granted. determining more or less precisely the number or even the identity of the persons to whom it applies at a given moment as 50. Even though there is no doubt that only long as it is established that it is applied by a portion of the production quota may be virtue of an objective legal or factual sold in the common market, there are two situation defined by the measure in relation possible approaches: either the Commission to the objective of the latter'. can reduce the abatement rates when calcu lating the production quotas allocated to steel undertakings as a whole, or, instead, in order to prevent a negative impact on 45. Quite frequently, it is specific situations prices, it can take action by fixing higher which give rise to the adoption of measures abatement rates so as to reduce the overall of a general nature and which become the output of the Community's steel industry. focus of the discussions which lead to the adoption of those measures.
51. In the first case, as the applicant maintains, the increase in the total tonnage 46. If the view is taken that those measures to be allocated amongst the undertakings in fact constitute general decisions in the does not preclude its being necessary, true sense, as the Commission maintains, pursuant to the contested decision, to that should not preclude them from being deduct 25 000 tonnes from that total, which challengeable on the basis of a misuse of are reserved to DDS. powers, as provided for by the second paragraph of Article 33 of the ECSC Treaty, where they have not been adopted 52. In the second case, even if the for a lawful purpose. Commission wished to take action by means of the abatement rates in order to offset the fall in prices, all the other undertakings, 47. From that point of view, I consider that including the applicant, would have to bear the applicants have relied on cogent, or the consequences of more serious cuts in plausible, grounds in support of their alle production. gation that the contested decisions involve a misuse of powers and therefore satisfy one of the requirements laid down by the second 53. For its part, the applicant in Case paragraph of Article 33 for an application to 360/85 also claims that its position on the be admissible. market places it in direct competition with DDS, with the result that its sales possi bilities are directly and substantially affected by the grant of a special quota to that 48. The requirement that there must be a undertaking. misuse of powers concerning them remains to be considered. 54. In 1984, according to the applicant, DDS's production amounted to approxi 49. The applicant in Case 351/85 claims to mately 460 000 tonnes, of which 310 000 be in direct competition with DDS, the sole tonnes — that is to say approximately beneficiary of the contested decisions, since two-thirds of the total — consisted of it produces the steel falling within Category reversing-mill plates (falling within
FABRIQUE DE FER DE CHARLEROI v COMMISSION
Category II), which made up virtually the supplementary quantity of 100 000 tonnes whole of the applicant's production. which thus inevitably exceeds the existing volume of demand. 55. Similarly, the applicant maintains, 71.4% of the additional quota obtained by 61. That leads to adverse repercussions on DDS under Article 14 of Decision No the system of prices, which has an unfa 234/84/ECSC is also made up of vourable impact on the position of the reversing-mill plates falling within Category applicant, a direct competitor of DDS, II. particularly on the German market.
56. Since, out of a total production of 62. Those consequences are all the more 310 000 tonnes of reversing-mill plates, unfortunate as the coefficient relating to the approximately 257 000 tonnes were utilization of the applicant's production exported in 1984, it is permissible, according capacity for Category II was — the to the applicant, to start from the premise applicant maintains — only 26.4% in 1984, that the supplementary quantity of 100 000 as against 51.2% in the case of DDS, and it tonnes per year from which DDS ultimately must be borne in mind that, with the allo benefited was sold largely in other Member cation of the supplementary quota, that rate States of the Community. could exceed 60% in the case of DDS, as against 26 % in the case of the applicant. 57. The applicant concludes that, as a result, employment and marketing oppor 63. Notwithstanding the circumstances tunities for competing undertakings are alleged by the applicants, it is doubtful reduced. whether they satisfy in this case the requirement ¡aid down at the end of the second paragraph of Article 33 of the ECSC 58. The applicant also maintains that this 13 Treaty. fact is particularly striking if the specific features of the quota system are borne in mind. 64. Moreover, the applicants argued their case by reference to the relationship between their own position and the 59. Dillinger Hüttenwerke maintains that particular circumstances of DDS, as if an the Commission fixes the abatement rates individual decision had been addressed to for production on the basis of the volume of DDS. demand, and attempts to adjust the level of supply accordingly. In order to ensure that 65. In my view, however, it is possible to the grant of additional quotas to under come to an affirmative conclusion, in the takings confronted with 'exceptional diffi light of the more recent case-law of the culties', within the meaning of Article 14, Court which is cited above (see footnotes 7, does not upset the market balance, Article 8 and 9). 9a of Decision No 234/84/ECSC (and Article 9 of Decision No 3485/85/ECSC) provides for the creation of a reserve not 66. In the first place, the reference to the exceeding 3 % of overall steel demand, specific situation created by the allocation which is to be set up each quarter at the of supplementary quotas to DDS constitutes time when the abatement rates are set. a good illustration of the manner in which the general decisions, allegedly vitiated by a misuse of powers, may affect the applicants. 60. According to the applicant, who has not been contradicted on this point by the 13 — Sec lhe Opinion of Mr Advocate General Lenz in Finisider Commission, Article 9 does not apply to the [1985] ECR 132, at p. 137.
OPINION OF MR DU CRUZ VILAÇA — JOINED CASES 351 AND 360/85
It is the application of those decisions that adopting the measure (subjective misuse of reveals the adverse effects they may have. powers), or between the lawful aim of the measure and the result objectively achieved by the inexcusably negligent exercise of the 67. Secondly, even if the view is taken that powers conferred (objective misuse of 5 the contested measures were not adopted powers). 1 with the intention of or with a view to affecting the applicants individually, the fact 71. In either case, any examination of a remains that the applicants were the misuse of powers is invariably based on a ultimate 'victims' of those measures or were teleological rationale and on the conflicting affected by them, in a situation which is relationship between the measure adopted common only to certain steel undertakings, and the purpose assigned to it or the namely those which are in competition with purpose which it is objectively intended to the beneficiary of the contested provisions serve. in relation to the categories of products in respect of which the supplementary quotas 72. It is that relationship between the means were granted. and the end that I propose to examine below.
68. Support for the conclusion that the 73. (b) In the first place, it is necessary to applications are admissible is to be found in 14 identify clearly the contested measure which the English and Portuguese versions of is alleged to be vitiated by a misuse of the ECSC Treaty which, in my view, are powers. particularly eloquent inasmuch as the terms used at the end of the second paragraph of Article 33 are 'affecting them' and 'que as 74. It is clear that the measures challenged afecte' respectively, corresponding to the by the applicants are Commission Decisions French expression 'à leur égard' and the No 2760/85/ECSC and No 3485/85/ECSC Italian expression 'in loro riguardo'. (Article 14 C) and not just any individual measure implementing those decisions which allocates supplementary quotas to a particular undertaking. 69. Since the conditions laid down in the second paragraph of Article 33 for an application to be admissible may thus be 75. That is how the subject-matter of the regarded as satisfied, I now turn to the action was defined by the applicants in their substance of the case. respective applications, and the arguments concerning the reasons on which those indi vidual measures are based are therefore not valid except in so far as they may contribute D — Substance towards the examination of the question whether the contested decisions involve a misuse of powers. 70. (a) A misuse of powers arises where there is a divergence between the aim 15 — Reference to those two conceptions of a misuse of powers pursued by the legislature in conferring on a are to be found in the case-law of the Court. See, for the first (traditional) meaning, the judgment of 12 June 1958 in body or institution the powers needed for Case 2/57 Hauti fourneaux de Chasse v High Authority the adoption of a measure and the aim [1958] ECR 119, at p. 207; see also the judgment of 18 March 1980 in Joined Cases 154, 205, 206, 226 to 228, 263 pursued by that body or institution in and 264/78, 39, 31, 83 and 85/79 Valsabbia v Commission [1980] ECR 907, at p. 1020, paragraph 130 of the decision. For misuse of powers in the objective sense see, 14 — Diaro da República, Series I, No 215, 2nd Supplement, 18 for instance, Fédéchar [1954-56] ECR 292, at pp. 302 and September 1985. 303.
FABRIQUE DE FER DE CHARLEROI v COMMISSION
76. (c) Those decisions were adopted in the 82. That is summarized in Article 2 which exercise of the powers conferred on the provides that 'through the establishment of Commission by the ECSC Treaty, in a common market' and having regard to the particular Article 58 thereof. ultimate or long-term objective of 'economic expansion', 'growth of employment' and 'a rising standard of 77. The wording of that provision does not living', the European Coal and Steel reveal clearly and unequivocally the entire Community 'shall progressively bring about range of objectives pursued by the authors conditions which will of themselves ensure of the Treaty in making provision for the most rational distribution of production recourse to the quota system. at the highest possible level of productivity, while safeguarding continuity of employment and taking care not to provoke 78. However, certain specific indications fundamental and persistent disturbances in may be derived from its wording. Further, the economies of Member States'. the reference to 'the principles set out in Articles 2, 3 and 4' constitutes a funda mental guideline. Finally, the Court has specified in its case-law which objectives of 83. Article 3 sets out in detail those the quota system must find expression in the objectives and the action which is designed rules applicable thereto. to contribute to their attainment. Article 4 clarifies the requirements of the common 79. Some of the objectives pursued by market in coal and steel. Article 58 of the ECSC Treaty are clearly apparent from its wording. A system of production quotas is established where the indirect means of action are not sufficient to 84. The aforesaid provisions also contain a overcome 'a period of manifest crisis' series of disparate aims which, as the Court 16 resulting from 'a decline in demand' (Article emphasized in its judgment in Klöckner, 58 (1)). The quotas are determined 'on an 'must constantly be reconciled with one equitable basis, taking account of the prin another depending on the economic circum ciples set out in Articles 2, 3 and 4' and, in stances and therefore priority may not be particular, of the concern 'to maintain given to one of those aims to the detriment 17 employment' in undertakings 'whose rate of of the others' . production has fallen below that envisaged' (Article 58 (2)).
85. In practice, in the event of a conflict 80. It is immediately apparent from those arising between those aims viewed indi provisions that they contain a set of general vidually, priority will have to be accorded to criteria and objectives which are inherent in one or other of them as would appear to be the quota system, and the harmonization of required, according to the Commission, by which cannot always be a simple matter. 'the economic facts and circumstances in the
16 — Judgment of 7 July 1982 in Case 119/81 Klöckner-Werke v 81. However, in referring to 'the principles Commission [1982] ECR 2627, at p. 2650. set out in Articles 2, 3 and 4', Article 58 17 — See the Vaisabbia judgment, supra, ECR 907, at p. 1002; sec also the judgment of 13 June 1958 in Case 9/56 Meroni itself is meant to establish that the quota v High Authority [1957-58] ECR 133, at pp. 151 and 152; system must safeguard or take into account judgment of 21 June 1958 in Case 8/57 Groupement des hauts fourneaux et aciéries belges v High Authority [1957-58] the major objectives of the ECSC Treaty. ECR 245, at pp. 253 and 254.
OPINION OF MR DU CRUZ VILAÇA —JOINED CASES 351 AND 360/85
light of which the Commission adopted its employment proportionate to their 17 20 decision' capacity'.
90. In the grounds of its judgment in 21 86. Particularly acute problems- of recon Finsider, the Court provides further clari ciling different objectives arise when the fication by stating that both Decision No Community institutions have to apply the 2177/83/ECSC extending the quota system, principles in question during a serious crisis which was in force at the time, and and accordingly set in motion the Decision No 2320/81/ECSC establishing 18 machinery provided for in Article 58. Community rules for aids to the steel industry, pursued 'a common aim, namely to promote the restructuring needed to
87. By establishing the system of production adapt production and capacity to fore quotas and by adopting the general rules seeable demand and to re-establish the applicable thereto, the Community competitiveness of the European steel institutions 'legalized the crisis' in order to industry'. safeguard the objectives of the ECSC Treaty as far as possible. 91. The terms in which that objective is couched are still valid in the light of the measures which followed Decision No 88.
Similarly, the Court has already defined 2177/83/ECSC, namely Decisions No on a number of occasions the specific 234/84/ECSC and No 3485/85/ECSC. objectives of that 'legalized crisis'. 92. Clearly, market trends with regard to iron and steel products called for 89. As the Court stated in Klöckner, 19 adjustments to be made to the rules in force. restrictive measures adopted in order to 'improve market conditions' must 'enable 93. However, Decision No 234/84/ECSC the profitability of undertakings to be main was adopted in connection with the tained or restored in the long term and 'persistence of the manifest crisis', which thereby enable the jobs which depend on it made it advisable, according to the to be preserved as far as possible'. The Commission, 'that the present system should Court went on to state that Article 58 'does be maintained without substantial not in any way require the Commission to amendments'. According to the preamble to guarantee each individual undertaking a that decision, the capacity utilization rate minimum level of production determined in was still extremely low and 'the substantial accordance with the undertaking's own overcapacity of production facilities remains criteria of profitability and development. a heavy burden on the whole of the The aim of Article 58 is to spread in the industry'. Worldwide, there was still the most equitable manner possible amongst all same marked imbalance between supply and undertakings the reductions required by the demand and the market remained economic situation and not to guarantee depressed. undertakings a minimum level of
94. The situation had even deteriorated to 17 — See the Valsabbia judgment, supra, ECR 907, at p. 1002; such an extent over the second half of 1983 see also the judgment of 13 June 1958 in Case 9/56 Meroni that 'the Commission was forced to take v High Authority [1957-58] ECR 133, at pp. 151 and 152; judgment of 21 June 1958 in Case 8/57 Groupement des hauts fourneaux et aciéries belges v High Authority [1957-58] 20 — See also the judgment of 20 June 1985 in Case 64/84 ECR 245, at pp. 253 and 254. Queenborough Rolling Mill v Commission [1985] ECR 18 — See Valsabbia, supra, at p. 1003. 1829, at p. 1847, paragraph 11 of the decision. 19 — Case 119/81 [1982] ECR 2627, at p. 2650, paragraph 13 21 — Judgment of 15 January 1985 in Case 250/83 Finsider v of the decision. Commission [1985] ECR 131, at p. 152.
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further restrictive measures in order to 1(d) and V) from the quota system, with a reinforce the discipline of the undertakings'. view to reverting to the operation of normal market forces.
95. As for Decision No 3485/85/ECSC, it was clear from the preamble thereto that the 101. However, there were persistent diffi situation on the Community steel market culties with regard to the other products, had improved appreciably since the start of including reversing-mill plates falling within 1984, both in terms of production and as Category II. regards the financial position of the steel undertakings. 102. In those circumstances, although the long-term objective remains the progressive 96. It had thus been possible to reduce abolition of the quota system, it proved overcapacity while, at the same time, the necessary to extend that system which, as steel industry pressed ahead with plant the Commission stated, 'by and modernization to boost its competitiveness. large ... simply extends the existing rules'. At the same time, there was found to be a lasting increase in the level of steel prices but, on the other hand, as a result of 103. (d) That is the overall context in which previous restructuring, further job losses had the Commission adopted first Decision No occurred. 2760/85/ECSC of 30 September 1985 containing a new Article 14 D, and subsequently an amended version of that 97. However, the world market was still article (Article 14 C) as part of Decision suffering from an imbalance between supply No 3485/85/ECSC of 27 November 1985. and demand, aggravated by import restrictions imposed by the United States of 104. The reasons for the adoption of that America and by the uncertainty resulting measure are set out in the preamble to from sharp fluctuations in the dollar Decision No 2760/85/ECSC. exchange rate.
105. It follows from a systematic 98. For that reason, the Commission's consideration of those reasons that Decision forecasts were based on the need to shed a No 2760/85/ECSC was adopted on the further 20 million tonnes or so of basis of the following objectives: hot-rolling capacity, and it was essential for modernization schemes and increased competitiveness to be pursued. 106. (i) to remedy the 'specific circum stances' of undertakings which are experiencing 'exceptional 99. The meaning of this, according to the difficulties', even after receiving Commission, is that although a substantial additional quotas; part of the task of restructuring had been accomplished, there was still no certainty of success nor was the crisis over. 107. (ii) more specifically, in order 'to guarantee its existence' in the case of an undertaking which is a 100. The possibility already existed of Member State's sole steel excluding certain products (in Categories producer, having regard to the
OPINION OF MR DU CRUZ VILAÇA —JOINED CASES 351 AND 360/85
need to safeguard that 'country's Treaty). The rational distribution of supply of steel products', which, production depends, in the first place, on 'even in a common market, must the distribution of the factors of production, depend to a large extent on this on their productivity and on the prices undertaking'. charged, and secondly on the location of the markets, which, in principle, has nothing to do with the mere fact that an under 108. In the light of those objectives, the taking is a country's (or a region's) sole provisions in question make it possible to steel producer. grant an additional quota increase of up to a maximum of 25 000 tonnes per quarter to the undertaking concerned. 113. It is questionable, therefore, whether a measure of that kind is in accord with the fundamental principles of the Common 109. I acknowledge that, at first sight, it is Market, as laid down in Article 3 (a) and not easy to detect, in the statement of the (b) of the ECSC Treaty, in so far as it bases reasons on which those decisions were the allocation of a further supplementary based, any trace of the actual objectives of quota essentially on the guarantee that a the quota system, as I have described them, State's domestic market will be supplied by and in relation to which Article 58 of the an undertaking situated in that State. In a ECSC Treaty confers upon the Commission true common market, the guarantee of the powers it needs to take action. supplies for a market should be transposed from the national to the Community level.
110. It cannot have been either the restruc turing process or the increased competi 114. In that regard, the Commission draws tiveness of the undertaking(s) concerned a parallel with the judgment in Campus 2 which led to the adoption of the measure in Oil 2which the applicants do not regard as question, but the need to safeguard the wholly relevant. undertaking's existence by guaranteeing it a 'minimum level of employment' to ensure its survival. 115. That case was concerned with a question which had been raised in connection with the application of a '111. In that respect, since the contested national measure restricting imports of provisions confer entitlement to a petroleum products, which the Court supplementary quota regardless of its effects regarded as justifiable on grounds of public on the competitiveness of the undertaking security under Article 36 of the EEC concerned and solely with a view to Treaty. ensuring the latter's survival, they seem to run counter to the aim of promoting restructuring, unless their purpose is to 116. The applicants emphasize that in this discourage it. case the institutional context is different as is, moreover, the factual context. The supply of petroleum products depends largely on 112. Hence it cannot be said, at least for the products imported from other parts of the time being, that the reason for the adoption world, which are generally politically of the measures in question is the concern unstable, whereas the steel industry is a to promote 'the most rational distribution of production at the highest possible level 22 — Judgment of 10 July 1984 in Case 72/83 Campus Oil Limited v Minister for Industry and Energy [1984] ECR of productivity' (Article 2 of the ECSC 2727 et seq.
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sector with a structural overcapacity of the position of undertakings on the market production in the Community. In their view, as between each other. the problem is particularly sensitive for a country like Ireland, which, in view of its 123. We shall see in due course that the position, was directly involved in Campus 'equitable clauses' which apply in Oil. connection with the operation of a crisis management system are capable of neutra 117. In addition, the applicants maintain lizing the force of that argument. that, so far as petroleum products are concerned, no really effective means are 124. In any event, an assessment of the available at Community level to deal with a foregoing considerations would appear to crisis, whereas the ECSC Treaty has set up point to the existence of a misuse of powers a common system of supply management in in the main or decisive part of the statement the event of a crisis. of the reasons on which the contested 24 measures are based. 118. However, we shall see in due course 125. (e) However, allow me to proceed a that the reference to Campus Oil is not little further along that path. entirely devoid of interest. 126. Let me state at once that, whether 119. Nor does the Commission attempt to expressly or by implication, the applicants justify the decisions under consideration, rely on a breach of the principle of which refer exclusively to reasons connected non-discrimination in support of their with supply, by reference to the adjustment claims. of production and capacity to demand, and fluctuations therein probably carried no 127. In particular, as a result of the allo weight with regard to their adoption. cation of supplementary quotas, the recipient thereof is accorded, the applicants 120. The decisions in question may even contend, more favourable treatment than its contribute towards a (no doubt marginally) competitors, without there being any greater imbalance, inasmuch as the objective justification for it. supplementary quotas are additional to the total quota allocated to Community under 128. Not only does it obtain a takings. supplementary quota in circumstances which preclude any other undertaking being 121. Furthermore, those measures are eligible for it, but also the quota is allocated apparently unconnected with the objective after the undertaking has already benefited of spreading as equitably as possible from quota increases pursuant to Article 14 amongst all the undertakings the sacrifices of the relevant decisions. required by the economic situation and they create, as the applicants allege, a further 129. In that regard, Fabrique de fer de distortion on the market for the benefit of Charleroi illustrates its contention by an undertaking or a category of under comparing the development of its own takings and to the detriment of its compe production of sheet with the development of titors. DDS's production and by reference to the
23 — See, for instance, the judgment of 19 September 1985 in 122. Hence the effect of the contested Joined Cases 63 and 147/84 Finsider vCommission [1985] decisions, albeit to the limited extent of the ECR 2857, at p. 2873, paragraph 31 of the decision. 24 — See Hauls fourneaux de Chasse, supra, at p. 209, and quantities provided for therein, is to redis judgment of 21 June 1958 in Case 13/57 Eiten- und tribute production and consequently to alter Stahlindustrie v High Authority [1957-58] ECR 265.
OPINION OF MR DU CRUZ VILAÇA —JOINED CASES 351 AND 360/85
growth of employment in the Danish steel 136. (f) That may be the case with regard to industry. the maintenance of employment (Articles 2 and 58 (2) of the ECSC Treaty), which might be threatened if an undertaking 130. At the same time, notwithstanding the confronted with exceptional difficulties were fact that the measure concerned is based on to become insolvent. the need to guarantee supplies for the domestic market, DDS benefits to a large extent, according to the applicants, from the 137. In that regard, the Danish export opportunities available within the Government, which has intervened in the common market. proceedings in support of the Commission's conclusions, explained the position of DDS and the risks to which the labour market 131. In support of their contention, the and the social situation in Denmark might applicants rely on the figures for DDS's be exposed by the failure to allocate a exports to the common market, which, supplementary quota to that undertaking. moreover, affect a sector of production that is particularly tense. 138. However, the Court has already 1 pointed out 6that the maintenance as far as 25 132. The Court has already held that 'for possible of employment in the sector the Commission to be accused of discrimi concerned is connected with the nation, it must be shown to have treated like improvement in market conditions in the cases differently, thereby subjecting some to long term and the purpose of Article 58 is disadvantages as opposed to others, without not to guarantee each individual under such differentiation being justified by the taking a minimum level of production. existence of substantial objective differ ences'. 16 139. Similarly, the Court emphasized that the reference in Article 58 (2) to the 26 133. However, the Court requires those 'maintenance of employment' is made in objective and substantial differences to be relation to a regulatory mechanism to which connected with the 'aims which the the Commission did not resort, any more Commission may lawfully pursue as part of than it has done so in this case. its industrial policy in the European steel industry*. 140. However, this case is concerned with safeguarding employment not in just any 134. Earlier I stated that doubts in that undertaking but in a country's sole steel regard may be justified. undertaking.
135. However, are the decisions at issue not 141. Does that not count as an important based on any other ground which is capable factor amongst the reasons justifying the of making their legality incontestable? allocation of supplementary quotas?
25 — See Finsider, supra, at p. 152; see also the judgment of 13 July 1962 in Joined Cases 17 and 20/61 Klöckner-Werke v High Authority [1962] ECR 325, at p. 345. 142. I have already acknowledged that that 26 — See Finsider, supra, at p. 152, paragraph 8 of the decision. factor may give rise to certain doubts in the
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light of the principles on which a common 149. As the Commission emphasizes in its market is based. replies, Article 14 D/C, in conjunction with Article 14, is based on grounds of fairness, inasmuch as it seeks to mitigate the 143. However, it also features in the Aids excessive rigidity of the quota system. 27 Code where, in the matter of financial aid to the steel industry, particular importance is attached to the situation of a Member 29 150. As the Court has already stated, the State with only one steel undertaking usefulness and value of such provisions are (Article 2 (3)). undeniable.
144. Any reference to that analogy should, 151. They must be applied in connection however, be made with reservations. The with objective criteria for defining those Aids Code states only that the Commission exceptional difficulties, as is the case of is to take account of that special situation in Article 14 itself, since, where the crisis is assessing applications for aid, without widespread, all the steel undertakings are 30 making it a decisive condition. affected to a greater or lesser extent.
145. Moreover, that fact is significant only 152. According to the contested decisions, in relation to applications for aid submitted the specific nature of the situation in which 'pursuant to restructuring programmes' and the undertakings concerned find themselves where the impact of the undertaking on the in relation to all the undertakings that fall Community market is 'minimal'. within the scope of Article 14 (and thus obtain additional quotas under the conditions laid down therein), and which 146. However, there is another fundamental justifies the allocation to them — and to principle which, according to the Court, them alone — of a further supplementary also governs the policy for combating the quota on account of their exceptional diffi crisis in the steel sector, namely the culties, stems from a single criterion, namely 28 that of being the sole steel undertaking of principle of solidarity. the country in which they are situated.
147. That is the principle which enables quota supplements to be granted, pursuant 153. It is possible to ask, as the applicants to Article 14 of the decisions on the quota do, whether that criterion is based on a system, to undertakings confronted with reasonable application of the principle of exceptional difficulties. solidarity.
148. As we know, the persistence of excep 154. In the light of that principle, Dillinger tional difficulties, even after a quota Hüttenwerke emphasizes, there is no justifi increase has been granted pursuant to cation, for instance, for discriminating Article 14, is another of the conditions laid against undertakings that are in the same down in the contested decisions. situation and which are the only ones estab-
27 — Commission Decision No 2320/81/ECSC of 7 August 29 — See the judgment in Alpha Sled, supra, at p. 767. 1981 (Official Journal 1981, L 228, p. 14). 30 — See the judgment of 11 May 1983 in Joined Cases 303 and 28 — See, for example, the judgment in Valsabbia, supra, at 312/81 Klöckner v Commission [1983] ECR 1507, at pp. p. 909. 1524 and 1525.
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lished in large regions of the Community 161. In the light of the foregoing consider whose frontiers do not coincide with those ations, however, I am of the opinion that of a Member State. the measures in question are general decisions in the true sense.
155. Safeguarding fundamental balances in the economies of the Member States is 162. The Danish Government refers to the undoubtedly one of the objectives pursued 32 judgment in Metallurgiki Halyps, in which by Article 2 of the ECSC Treaty, where it the Court acknowledges that, in the exercise refers to the need to prevent 'fundamental of its discretion, the Commission may take and persistent disturbances' in those into account considerations of economic economies. policy connected with differences in structure, level of development and rate of utilization of production capacity existing 156. It was in order to meet such between the undertakings of a given concerns — which are not directly at issue Member State (in that case Greece) and in these proceedings — that the Commission those of other States. incorporated, in the decisions now under consideration, Article 16 which is applicable to Greece and Ireland. 163. Admittedly, the Court emphasized in the same judgment that 'the consequences 157. (g) At this stage of my analysis, I have of that crisis affect all undertakings, the impression that we are dealing with a whatever their geographical location and borderline case in which it is possible to their individual state of development' and raise the question whether or not the that existing problems were not peculiar to Commission has exceeded the tolerance Greek undertakings but also arose 'for threshold in the exercise of its discretion. many other .undertakings throughout the 33 Community'.
158. As is well known, the Court has considered allegations of a misuse of powers 31 164. However, the Court referred to the to be well founded only in very few cases. application of general provisions in force — which entail sharing the necessary 159. I am also fully aware of the doubts sacrifices in an equitable manner — and not raised by this case and of the need to weigh to the adoption of a new set of rules for special cases that might justify such action. the arguments put forward.
160. But I cannot avoid the conclusion that, 165. For that reason, the Court held that if the contested decisions were to be 'the introduction and adjustment of the regarded as individual decisions, they would special relief clause in favour of Greek have to be annulled on account of a misuse undertakings falls within the Commission's 3 of powers. discretion on matters of policy'. 4
31 — See the judgment of 5 May 1966 in Joined Cases 18 and 32 — Judgment of 15 December 1983 in Joined Cases 31, 138 35/65 Gutmann v Commission [1966] ECR 103, at p. 118; and 204/82 Metallurgiki Halyps v Commission [1983] ECR judgment of 29 September 1976 in Case 105/75 Giuffrida v 4193, at pp. 4208 and 4209. Council [1976] ECR 1395, at p. 1403; judgment of 6 March 1979 in Case 92/78 Simmenthal v Commission 33 — See, to the same effect, the judgment of 20 June 1985 in [1979] ECR 777, at p. 811; judgment of 21 February 1984 Queenborougb Rolling Mill, supra, paragraph 11 of the in Joined Cases 140, 146, 221 and 226/82 Wahstahl- decision. Vereinigungv Commission [1984] ECR 951, at p. 986. 34 — See Metallurgiki Halyps, supra, at p. 4211.
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166. The Danish Government has examined forms part of their industrial and defence at some length, on the basis not of the policy objectives, with the result that it is present state of the market but of the need possible to detect a convergence between to have at its disposal at all times the means those objectives and the aims shared by all to combat the eventuality of a serious crisis, the Member States of the European Coal the problems of security of supply which and Steel Community. may arise in a Member State where it has only one steel undertaking on its territory and that undertaking is in difficulty. 171. Even if an undertaking's technical possibilities and the demands of the field in which it is specialized do not permit it to 167. Accordingly, the insolvency of the manufacture in normal circumstances the undertaking in question at a time when entire range of products needed in order to abnormal circumstances are widespread, and supply the State in which it is situated, the which it might be possible to prevent by the adjustments and reconversion of which it is allocation of a supplementary quota, is quite capable during a crisis may be such as capable of producing serious consequences to make that 'shuttlecock' effective, for the stability of the country and the func particularly in cases where the undertaking tioning of its economy. can use raw materials found locally.
168. In that respect the analogy drawn with 172. Provision for a future emergency of the judgment in Campus Oil is justified; in that kind can be made only in the present, that case, the Court stated that the by preventing the closure of a country's sole restrictive measures under consideration steel undertaking which may be faced with were justifiable, in the interest of public the threat of serious difficulties on the security, in order to guarantee 'a minimum market. supply of petroleum products to the State 35 concerned in the event of a supply crisis' by ensuring 'that its plant will be available in 173. Even in the absence of a serious crisis, 36 the event of a crisis'. a significant change in the economic situation is capable of affecting market conditions to such an extent as to bring 169. In the event of a serious crisis, the those considerations into play. functioning of the common market in steel could be interrupted or seriously jeopardized and it is on the basis of such 174. In those circumstances, and given the eventualities that the concern of the present structure of the Community, it may Member States to ensure secure supplies of not make sense to withhold from the iron and steel products, which are crucial to Community institutions the power to adopt the functioning of a large number of general measures to meet those concerns. sectors, must be assessed.
175. The quota system has functioned as a 170. Accordingly, the availability of a net in which the mesh was tightened in 'strategic shuttlecock' which they can order to close the gaps revealed by the crisis operate in those circumstances normally and created by the system itself. Article 14, as supplemented, acts as a safety net or as 35 — Sec Campus Oil, supra, at p. 2754. an equitable clause which makes it possible 36 — idem, at p. 2755. to mitigate the rigidity of the system.
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176. However, if the functioning of those the grant of a quota supplement and the provisions and the exercise of the powers market was left open. Hence that condition which they confer are not to exceed the differs from the one which was criticized in 37 bounds of what is permissible under the the 1985 Finsider judgment. general rules in force, they must operate under conditions which are limited and 179. In any event, we are dealing with proportionate to the goal pursued. exceptional rules adopted during a crisis in response tö exceptional circumstances. It would be another thing to argue that, under 177. It has not been established that this was normal market conditions, the continued not the case here. Supplementary quotas support of the public authorities in order to may not exceed 25 000 tonnes per quarter, ensure the survival of an undertaking is the quantity deemed necessary to ensure the justified. survival of an undertaking. 180. For those reasons, I believe that the 178. Moreover, there was never any Commission acted within the bounds of intention of reserving a market to a single what is still acceptable in the difficult undertaking by granting it exclusive or pref exercise of its discretion in the circum erential rights. Provision was made only for stances of the case.
Conclusion
181. I have already expressed the view that the applications must be regarded as admissible in so far as they challenge both Decision No 2760/85/ECSC and Article 14 C of Decision No 3585/85/ECSC.
182. To classify those decisions as individual decisions would, in my view, entail their annulment on account of a misuse of powers.
183. However, I incline to the view that they constitute general decisions and accordingly propose that the Court dismiss the applications as unfounded.
184. In the light of that conclusion, the applicants should be ordered to bear the costs in accordance with Article 69 (2) of the Rules of Procedure.
37 — See Finsider, supra, paragraph 32 of the decision.