C-128/87

COMMISSION v GREECE

OPINION OF MR ADVOCATE GENERAL MISCHO delivered on 17 November 1988 *

Mr President, 3. Whilst producer groups may therefore Members of the Court, consist of Organizations engaged in producing', they may in addition form 'associations' which may also be granted official recognition (see in particular Article 1. Regulation No 136/66 of the Council on 5(3) and Article 20c(2)). the establishment of a common organization of the market in oils and fats set up a system of aid for the production of olive oil. Article 5(2) of that regulation, as amended 4. Council Regulation No 2261/84 of 17 by Council Regulation No 1413/82 of 18 July 1984, adopted under Regulation No May 1982 (Official Journal 1982, L 162, 136/66, laid down general rules on the p. 6) provides as follows: granting of aid for the production of olive oil (Official Journal 1984, L 208, p. 3). It lays down additional conditions in regard to the recognition of producer organizations 'The aid shall be granted: and associations of such organizations and the second paragraph of Article 20 of the regulation contains the following transi­ tional provision: to growers who are members of a producer group recognized pursuant to this Regu­ lation, on the basis of the quantity of oil actually produced by them, 'With a view to ensuring the respect of the objectives of this Regulation whilst taking into consideration specific problems which may arise in certain Member States in the to other growers, on the basis of the application of these provisions, the Member number and production potential of the States concerned may, after consulting olive trees which they grow the Commission, whilst taking into consideration any additional criteria, grant for a transitional period of three marketing years, from the marketing year 1984/85, 2. Article 20c(1) lays down a total of seven provisional recognition to such producers' criteria which producer groups must meet in organizations and their associations which order to be recognized. The first criterion is make a request.' that producer groups must

6. Pursuant to the second paragraph of 9. A fortiori, that must be the situation Article 20 of Regulation No 2261/84, the when the action was brought, as in this Hellenic Republic informed the Commission case, at a time when the contested provision of the 'additional criteria' by telex message was still in force (15 April 1987). of 19 September 1984. On 25 October 1984 the Greek Minister for Agriculture signed Order No 330358, which makes recognition of producer organizations subject to those 10. Let me now turn my attention to the criteria. Consequently, the time which substance of the case, which arises from elapsed between the notification of the Article 3 of the abovementioned Ministerial criteria and the adoption of the Ministerial Order of 25 October 1984, which is drafted Order was probably not sufficient to permit in the following terms: the Commission to study the criteria in detail and to make the Greek authorities aware of its views. In any event, the Commission made its position known only 'The producer organizations referred to in at the end of January 1985. paragraphs 1 and 2 must be entitled to pursue, on behalf of their members and on their responsibility, all commercial activities relating to the collection, distribution 7. The Hellenic Republic is right in arguing and sale of olive products. Their that by so doing, the Commission did not members — natural persons — shall parti­ act with proper diligence (see, in regard to cipate in the organization or shall be repre­ that concept, in particular the judgment of sented by local organizations established at 11 December 1973 in Case 120/73 Lorenz v the level of communities or adjoining Germany [1973] ECR 1471). communities, having legal personality and pursuing economic and social objectives. The members shall undertake to provide the organization with information about all their agricultural activities. This paragraph 8. On the other hand, I do not agree with shall apply for three (3) marketing years, the Hellenic Republic's argument to the with effect from the 1984/85 marketing effect that the application is without year.' purpose because the additional criteria will cease to be in force before the date on which the Court will deliver its judgment. According to the case-law of the Court, 11. The Commission considers that those even where a default has been remedied additional criteria exceed the limits of the subsequently to the time-limit prescribed by powers granted to the Member States by the second paragraph of Article 169 (the the second paragraph of Article 20 of time-limit fixed by the Commission in the Regulation No 2261/84. Moreover, the reasoned opinion), pursuit of the action still Commission considers that the concurrent

application of the criteria introduced 14. I should point out first that the Hellenic arbitrary discrimination between producers Republic cannot be accused of limiting contrary to Article 40(3) of the EEC Treaty. recognition to 'second degree' producer The criteria at issue do not genuinely deal organizations, that is to say organizations with specific problems but limit recognition composed of other organizations, since the to associations of agricultural cooperatives second sentence of paragraph 3 of (known as 'second degree cooperatives'). the Ministerial Order reads as follows: They exclude, from the outset and 'Their members — natural persons — shall generally, all other forms of producer participate in the organization or shall be organization capable of providing the represented by local organizations . . . '. The necessary guarantees. juxtaposition of the concepts of partici­ pation and representation leaves the possi­ bility open of recognizing organizations of which natural persons may be direct members. 12. For its part, the Hellenic Republic argues that 'the only purpose of laying down additional criteria was to ensure 15. The only problem is therefore to transparency and objectivity of the activities determine whether the only producer organ­ of the oil mills and producer organizations' izations eligible for recognition in Greece (rejoinder, section 3, third paragraph). It are cooperatives or associations of cooper­ follows that it does not argue that there atives. were 'specific problems' (within the meaning of the second paragraph of Article 20 of Regulation No 2261/84) in Greece making it necessary to take into consideration 'any 16. The definition laid down by the Greek additional criteria' the purpose or effect of Minister is as follows: which was to exclude certain forms of producer organization. Moreover, it denies that it had any intention of recognizing only 'The producer organizations . . . must be cooperatives or of excluding commercial entitled to pursue, on behalf of their companies. Consequently, it accepts the members and on their responsibility, all Commission's argument to the effect that commercial activities relating to the when the Council adopted the measures in collection, distribution and sale of olive question, it was not concerned with the products'. legal form of producer organizations but merely with their efficiency from the point of view of the proper functioning of the system of production aid. 17. Certainly, the phrase 'all commercial activities relating to the collection, distri­ bution and sale of olive products' is very similar to the terms of Article 18(3) of Greek Law No 1541 on agricultural cooper­ atives, in which the following provision is to 13. The dispute can therefore be reduced to be found: the question as to whether the effect of the measures referred to by the Commission, despite the stance adopted by the Greek Government, is to prevent recognition of 'The cooperative shall take responsibility for olive oil producer organizations having a the production of its members which is legal form other than that of a cooperative. delivered to it in accordance with Article

'1 . The members shall be liable for the cooperative's commitments vis-à-vis 'see to the distribution, advertising and third parties up to the amount of three marketing of their members' products. times the value of their share of the Consequently, the provisions of Article cooperative and to the extent corre­ 18(3) shall apply'. sponding to each member's share of the debt. The statutes may also provide for the liability of members to be increased 19. However, that resemblance between the by a resolution of the general meeting wording of the Ministerial Order and that adopted in accordance with the special of the law is not sufficient in itself to decide quorum requirement and by the majority the matter because it is difficult to see what provided for in Article 25(2). 1 purpose a producer organization — irres­ pective of its legal form — might serve if not to collect, distribute and sell the agri­ cultural products cultivated or harvested by 2. Personal liability of members to the its members. cooperative's creditors shall arise only in so far as the creditors do not obtain satisfaction from the cooperative's assets or from guarantors; members shall also 20. On the other hand, what strikes me in be personally liable for debts incurred by the passage from the Ministerial Order the cooperative before they became quoted above is that the organization may members of the cooperative. act only on the responsibility of its members. Although the wording of the measure is not unambiguous, I consider that the expression 'on their responsibility' refers to 'members' and not to 'producer organiz­ 3. Members shall remain liable even after ations' as the Commission seems to think ceasing to be members of the (see page 7 of the French version of the cooperative for debts incurred during application). That form of words therefore their period of membership. The limi­ precludes recognition of any organization tation period for claims by third parties cast in the form of a company in which the against members shall be one year shareholders bear the losses only up to following the member's departure from the amount of their contribution to the the cooperative. company (public limited company under Greek law; Article 33 of the Law on 1 — A quorum of two-thirds of the membership and a majority of two-thirds of the members present.

23. Finally, I should note that the Minis­ terial Order of 10 January 1985 laying down the list of organizations and associ­ ations of such organizations recognized for the 1984/85 olive-oil marketing year refers in its preamble only to the law on agri­ cultural cooperatives and not to the legis­ 25. In those circumstances the question lation dealing with other forms of asso­ arises as to whether it is still necessary to ciation. I am not convinced by the Hellenic consider the way in which the Ministerial Republic's objection to the effect that it was Order defines the local organizations not necessary to refer to the latter legis­ through which individual olive growers may lation because, in fact, the list is entirely be represented on the producer organiz­ composed of cooperatives. Such an order, ations. I do not think that is essential since which is designed to be applied repeatedly, the problem of recognition concerns only should, in my opinion, be in a form which producer organizations properly so called can be applied at any time and refers to all and not Organizations engaged in the relevant legislation, even if part of that producing, processing or marketing olives legislation is not to be applied in a particular and olive oil and consisting solely of olive year. growers' of which, according to Article 20c

2 — Sec the judgment of 18 December 1986 in Case 312/85 Villa Banfi v Regione Toscana [1986] ECR 4039, and lhe judgment of 24 February 1988 in Case 8/87 Andrianou 24. The Commission also relies on the fact Gizinou Colion Producen Group v Gref* Stole [1988] ECR 1001. that only cooperatives were in fact 3 — See the judgment of 26 April 1988 in Case 207/86 Apesco v recognized and that the applications of all Commi!!!On[l988] ECR 2151.

29. To conclude , I propose that the Court should grant the Commission's application and declare that by restricting official recognition of olive oil producer organizations to those which are 'entitled to pursue , on behalf of their members and on their responsibility, all commercial activities relating to the collection, distribution and sale of olive products' and 'whose members — natural persons — participate in the organization or are represented by local organizations established at the level of communities or adjoining communities, having legal personality and pursuing economic and social objectives', the Hellenic Republic has excluded certain types of producer organization on the sole ground of their legal form and has therefore failed to fulfil its obligations under Council Regu­ lation ( EEC ) No 2261 / 84 of 17 July 1984 laying down general rules on the granting of aid for the production of olive oil and of aid to olive oil producer organizations and under Article 40(3) of the EEC Treaty .

30. Consequently , the Hellenic Republic should be ordered to pay the costs.