C-181/91

PARLIAMENT v COUNCIL AND COMMISSION

OPINION OF ADVOCATE GENERAL JACOBS delivered on 16 December 1992 *

My Lords, did not, however, appear on the formal agenda of that meeting. On 14 May the decision was taken, at a working lunch attended by the Ministers and by a Member 1. In these proceedings the Parliament seeks of the Commission, to provide special aid of the annulment under Article 173 of the EEC ECU 60 million to Bangladesh in accordance Treaty of a decision adopted in a meeting of with the Commission's plan. The decision the Council to provide special aid to Bang­ was the subject of a press release under the ladesh (Case C-181/91) and of the measures heading 'Aide au Bangladesh — conclusions taken by the Commission for the implemen­ du Conseil' (reference 6004/91, Presse 60-G). tation of that decision (Case C-248/91). The The press release read as follows: proceedings raise the issue of principle whether a decision presented as a decision of the Member States meeting in Council can be challenged under Article 173 of the 'Les États membres réunis au sein du Con­ Treaty. seil, sur la base d'une proposition de la Com­ mission, ont décidé, dans le cadre d'une action communautaire, d'une aide spéciale de 60 Mécus pour le Bangladesh. Background to the dispute

La répartition entre les États membres se fera 2. This dispute has its origin in a cyclone selon la clé PNB. which devastated Bangladesh in the night of 29 to 30 April 1991. Following that cyclone, the Commission made an immediate grant of aid to Bangladesh of ECU 10 million and Cette aide sera intégrée dans l'action générale prepared a plan for special aid of ECU de la Communauté vers le Bangladesh. 60 million. The plan was first considered by the Finance Ministers of the Member States who met informally in Luxembourg on 11 May 1991. The plan was examined by the L'aide est fournie soit directement par les Council (General Affairs) in the course of a États membres, soit par le biais d'un compte regular meeting held in Brussels on 13 and géré par la Commission. 14 May 1991 and attended by the Ministers for Foreign Affairs of the Member States. It

3. Following the decision to provide the aid, the Commission opened a special account with a Belgian bank and invited the Member 4. By its application against the Council, the States to transfer their contributions to that Parliament seeks the annulment of the account. Greece paid its contribution of decision to provide the special aid of ECU 716 775.45 into the special account. ECU 60 million to Bangladesh. The Parlia­ The other Member States however made ment claims that although the decision is their contributions direct, by way of bilateral described in the press release as a decision aid. The contribution of Greece was incor­ taken by 'the Member States meeting in porated into the Community budget. This Council', it is in reality a decision of the came about as follows. The Director of the Council. The Parliament claims that the Revenue Directorate in the Directorate- decision has budgetary implications and General for Budgets of the Commission should have been adopted in accordance entered the sum of ECU 716 775.45 under with the procedure provided for in Article Article 900 (Miscellaneous revenue) of the 203 of the Treaty. This would have given the general budget of the Communities for 1991. Parliament a significantly increased role. The In accordance with the provisions of the Parliament, while stressing that it supported Financial Regulation applicable to the gen­ the grant of Community aid in such a case, eral budget of the European Communities claims that by failing to adopt the decision (updated text published at OJ 1991 C 80, under Article 203 the Council infringed the p. 1), a supplementary heading for the same Parliament's prerogatives. It refers to the amount was opened on the expenditure side decision of the Court in Case C-70/88 Euro- of the budget (Item B7-3000: Financial and pean Parliament v Council [1990] ECR technical cooperation with Asian and Latin I-2041 where the Court stated at paragraph American developing countries). It appears 27 of the judgment: from a letter of 2 August 1991 addressed by the Commission to the Chairman of the Committee on Budgetary Control of the European Parliament that that supplemen­ tary heading was shown and monitored sep­ arately in the accounts. That letter also stated that: '... an action for annulment brought by the Parliament against an act of the Council or the Commission is admissible provided that the action seeks only to safeguard its prerog­ atives and that it is founded only on submis­ sions alleging their infringement. Provided 'It [the supplementary heading] is ... subject that condition is met, the Parliament's action to the general rules applicable under the for annulment is subject to the rules laid Financial Regulation (utilization is decided down in the Treaties for actions for annul­ by the competent authorizing officer, ment brought by the other institutions.'

The proceedings against the Council (Case C-181/91)

7. The Council raised an objection of inad­ 9. The Parliament points out that, according missibility on the ground that the contested to the press release, the special aid is an inte­ act was adopted not by the Council but by gral part of the Community action towards the Member States and that it could not Bangladesh and is to be administered by the therefore be the subject of annulment pro­ Commission. The Parliament states that, ceedings before the Court. It asked the under Article 155, fourth indent, of the Court to rule on that objection without con­ Treaty, it is only the Council which has the sidering the substance of the case. The Court power to delegate to the Commission the decided however to examine together the task of integrating the special aid within the issues of admissibility and substance. general Community aid to Bangladesh. The Parliament adds that, as appears from a letter dated 22 May 1991 addressed by the Com­ mission to the Parliament, the Commission 8. In support of its claim that the contested proposed to give effect to the contested act decision is an act of the Council, the Parlia­ by entering any amounts paid by the Mem­ ment presents a series of arguments. First, it ber States in the Community budget. It also

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OPINION OF MR JACOBS — JOINED CASES C-181/91 AND C-248/91

10. The Parliament states that the issue of the aid to Bangladesh was raised again in a meeting of the Council held on 27 May 1991. 12. The Council disputes the submissions of Following that meeting, a press release was the Parliament. It states that the wording of issued which stated that 'the Council noted the press release, which has no official char­ the stage of implementation of the pro­ acter and produces no legal effects vis-à-vis gramme' for the aid to Bangladesh. The Par­ third parties, cannot determine the character liament argues that the reference in that press of the decision. Although the press release release to 'the Council' as opposed to 'the stated that the contested act had been Member States meeting in Council' provides adopted on a proposal from the Commis­ evidence that the Council itself perceived the sion, the Council claims that such language contested act as an act of the Council. was not entirely appropriate and that it would be more accurate to speak of the Council having acted in agreement with the Commission. 11. The Parliament claims that since the monies available under the general budget for 1991 had been exhausted, it was neces­ sary for a supplementary and amending bud­ get to be adopted in order to provide the aid 13. The Council argues that the division of envisaged. According to Article 15(2) of the the aid on the basis of the Member States' Financial Regulation applicable to the gen­ GNP provided a practical and easy solution. eral budget of the European Communities, The use of the GNP as a criterion for the supplementary and amending budgets are to division of the aid cannot transform the con­ be adopted in accordance with the procedure tested decision to a Community act. Accord­ laid down in Article 203 of the Treaty and ing to the Council, the fact that the decision the corresponding provisions in the other to grant the aid was not a Community act Treaties. According to the Interinstitutional did not prevent the Commission from Agreement on Budgetary Discipline and undertaking the coordination and manage­ Improvement of the Budgetary Procedure ment of the aid. The Commission has under­ (OJ 1988 L 185, p. 33), the adoption of such taken similar operations in the past and has

14. According to the Council, neither the 'Under Article 173, the Court has a duty to Member States nor the Commission were review the legality "of acts of the Council ... acting within the confines of the Community other than recommendations or opinions". legal order, but rather on an ad hoc basis to ensure an effective and rapid response to a crisis. The Council maintains that the juris­ diction of the Community to grant humani­ Since the only matters excluded from the tarian aid is not exclusive, the Member States scope of the action for annulment open to remaining free to act, collectively or individ­ the Member States and the institutions are ually, alongside the Community. "recommendations or opinions" — which by the final paragraph of Article 189 are declared to have no binding force — Article 173 treats as acts open to review by the Court all measures adopted by the institu­ 15. In response to the Council's submis­ tions which are intended to have legal force. sions, the Parliament acknowledges that the jurisdiction of the Community to grant humanitarian aid to third countries is not exclusive, but insists that when the Member The objective of this review is to ensure, as States wish to give aid within the framework required by Article 164, observance of the of the Community, they can act only law in the interpretation and application of through the Council and only in accordance the Treaty. with the Community budget procedure. The Parliament adds that in the present circum­ stances this would have been perfectly feasi­ ble. First, the aid envisaged was for long- It would be inconsistent with this objective term projects which would take time to set to interpret the conditions under which the up. Secondly, the Parliament strongly sup­ action is admissible so restrictively as to limit ported the principle of granting aid to Bang­ the availability of this procedure merely to ladesh and had indicated its willingness to the categories of measures referred to by hasten the passage of any proposal the Com­ Article 189. mission might make on the matter through the procedure laid down in the Treaty.

'The new Member States accede by this Act 17. On the basis of the above case-law, the to the decisions and agreements adopted by question whether the contested act consti­ the Representatives of the Governments of tutes an act susceptible to judicial review the Member States meeting in Council. They depends on its content and effects and not on undertake to accede from the date of acces­ the description of it given in the press release sion to all other agreements concluded by and in the draft minutes of the meeting at the original Member States relating to the which it was adopted. functions of the Communities or connected with their activities.'

18. It is true that, unlike the situation in the present case, in the cases cited above it was not the identity of the enacting institution Similar provisions are contained in the Acts that was in dispute but the effects of the act of Accession to the European Communities itself. In ERTA, in particular, it appears from of Greece and of Spain and Portugal. Those the minutes of the Council meeting of provisions show that decisions of the Mem­ 20 May 1972 that the decision whose validity ber States meeting in Council do not form was challenged by the Commission was one part of the Community legal order in the adopted by the Council (see the Opinion of strict sense, but are nevertheless part of the Advocate General Dutheillet de Lamothe, acquis communautaire; as their very title [1971] ECR pp. 285-286). In the present suggests, they have a hybrid character.

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22. It is true that if the Member States adopted a collective decision in breach of Community law, it would be open to the Commission to initiate enforcement pro­ 21. This approach is consistent with the ceedings against the Member States under functional approach which the Court has Article 169 of the Treaty. It is clear, however, followed in defining the concept of review­ that that would not be done in a case such as able act for the purposes of Article 173. By the present where the Commission is in contrast, the opposite view would run agreement with the Member States. In any counter to the objectives of Article 164 of event, the availability of such a remedy the Treaty. If it were accepted that the char­ would not be a sufficient guarantee in a case acterization of a decision as a decision of the where the contested decision is alleged to Member States meeting in Council was by violate the prerogatives of the Parliament. In itself sufficient to place that decision beyond Case C-70/88 European Parliament v Coun- the scope of Article 173, this would mean cil [1990] I-2041, the Court stated at para­ that the Court could not review the legality graph 19 of the judgment: of the decision notwithstanding the possibil­ ity that the decision should be regarded, in all the circumstances, as a decision of the Council. In my view, to hold in those cir­ '... while the Commission is required to cumstances that the act was not susceptible ensure that the Parliament's prerogatives are to judicial review would not be compatible respected, that duty cannot go as far as to

'The Court, which under the Treaties has the task of ensuring that in the interpretation and application of the Treaties the law is observed, must therefore be able to maintain 24. In the present case, it is I think plain the institutional balance and, consequently, that, whatever the nature of the plan submit­ review the observance of the Parliament's ted by the Commission, the intention of the prerogatives when called upon to do so by author of the decision was to adopt it as an Parliament, by means of a legal remedy act of the Member States meeting in Council which is suited to the purpose which the and not as an act of the Council. As I under­ Parliament seeks to achieve.' stand the Parliament's case, it does not deny that the act was presented as an act of the Member States meeting in Council; rather, it denies that the act could properly be adopted otherwise than by the Council, and claims In my view, those considerations apply also that in reality it was the Council which in this case. It follows that it is appropriate acted. to examine the competence of the enacting authority and the content and the effects of the contested decision with a view to ascer­ taining whether the contested decision is in a disguised form an act of the Council. 25. However, it is common ground that in the field of humanitarian aid the competence of the Community is not exclusive but con­ 23. I do not think that much significance current with that of the Member States. It should be attached to the reference in the follows that the Member States retain the press release to a 'proposal' of the Commis­ power to act individually or collectively as sion. That reference should not be taken to they see fit in providing financial assistance imply that there was a formal proposal to third countries which have been hit by within the meaning of Article 149 of the natural disasters. Treaty. Certainly the term 'proposal' may lead to confusion: I note that the same point was discussed as long ago as 1966: see Ger­ hard Bebr, 'Acts of representatives of the Governments of Member States', 14 SEW (1966) pp. 529-545, at p. 539. It is normal 26. In my view, contrary to the submissions practice for the Commission to be involved of the Parliament, the involvement of the

Commission for the purposes of coordinat coordination of such action. It is for the ing the special aid to Bangladesh is not an Commission to decide whether or not to indication that the contested decision is in accept such a mission, provided of course reality a Community act. It is true that if, as that it does so in a way which is compatible the Parliament suggests in its action against with its duties under the Community Trea the Commission, the Commission can in no ties. Whether the Commission did so in the circumstances act outside the framework of present case is an issue in the Parliament's the Community Treaties, then the involve action against the Commission.

that the Commission's intervention was performance of such tasks, the Commission's unlawful rather than that the contested actions will be subject to review by the decision was a Community act. It may not Court if they are challenged as being unlaw therefore be strictly necessary to consider ful under the Treaties. But the Commission's that suggestion, but in my view it cannot be involvement will not otherwise bring the accepted. In practice, the Commission regu activities in question within the jurisdiction larly participates, as I have already men of the Court or within the scope of the tioned, in the activities of the representatives Community Treaties. of Member States meeting in Council.

It undertake at the request of the Council, the is clear that in cases where the Member Member States or even third parties the States undertake collectively financial obliga coordination of collective action. A recent tions outside the framework of the Commu example was the coordination by the Com nity, the GNP formula may be used as a mission of the action agreed by the interna practical method for the division of the tional community towards the countries of financial obligations among the Member Central and Eastern Europe.

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OPINION OF MR JACOBS -JOINED CASES C-181/91 AND C-248/91

action towards Bangladesh is not material. measures without affecting the validity of the Since the Community and the Member decision contested in Case C-181/91. States have concurrent competences, it must be open to them to coordinate their actions.

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PARLIAMENT v COUNCIL AND COMMISSION

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OPINION OF MR JACOBS —JOINED CASES C-181/91 AND C-248/91

under the appropriate headings of the budget 38. The issues of admissibility are closely have the character of technical accounting linked with the issues of substance, and I will operations which are not capable of produc­ consider the issues of substance first. ing legal effects vis-à-vis third parties. According to the decision to provide special aid to Bangladesh, Member States had the option to pay their contribution to the aid either directly or through the Commission. The decision to enter the sum in the Com­ 39. The Commission disputes the argument munity budget did not have any legal effects of the Parliament that it acted unlawfully. vis-à-vis the Greek Government. Finally, the The Commission argues that, although it Commission submits that it did not act received Greece's contribution outside the within the framework of the Community framework of the Community legal order, it legal order but on the basis of a mandate made the accounting entries in question in which the Member States conferred upon it the interests of sound financial management outside its functions as a Community insti­ and transparency. The Commission admits tution. It follows that the contested measures that it has no authority to amend the budget were not Community acts amenable to judi­ but argues that the entries of the Greek aid cial review under Article 173. were made not in the budget itself but in the accounts recording the budget. It argues that such entries are simply accounting transac­ tions.

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not part of the implementation of the bud­ 42. I conclude that the Commission was not get. entitled to enter in the revenue and the expenditure sides of the accounts relating to the implementation of the Community bud­ get for the financial year 1991 Greece's con­ tribution to the special aid to Bangladesh.

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case infringed the prerogatives of the Parlia­ follow that the Parliament is in no circum­ ment so as to give the Parliament the right to stances entitled to challenge implementing take proceedings for annulment. The case- measures in an action for annulment. I think law of the Court to date is confined to the that view may well be correct, but it is not prerogatives of the Parliament in the legisla­ necessary to decide the question in this case. tive process. There might conceivably be circumstances in which the Parliament could seek the annul­ ment of implementing measures, for example 45. So far as the budget is concerned there is if they had the effect of so subverting the no doubt in my view that the Parliament budget as to make it fundamentally different would be entitled to take proceedings if from the budget adopted under the Treaty another Community institution violated the procedures. In any event, no such question Parliament's right to participate in the adop­ arises here. The Parliament has not been able tion of the budget in accordance with the to identify any effects of the disputed entry provisions of the Treaty. As regards the which could in any way have affected its pre­ implementation of the budget, that is the rogatives. Indeed the only potential effect, so exclusive responsibility of the Commission far as the Parliament was concerned, was to under Article 205 of the Treaty. The Parlia­ give the Parliament the opportunity of mon­ ment has, however, the duty to monitor the itoring the use of the money. The entry was implementation of the budget and to grant a in my view improper but it in no way discharge to the Commission under Article adversely affected the Parliament's preroga­ 206b of the Treaty and Article 89 of the tives. Financial Regulation. It may well be argued that the Parliament's powers in relation to the discharge are in themselves sufficient to ensure that its prerogatives are not infringed 46. Accordingly the Parliament's action by anything done by the Commission in its against the Commission is in my view inad­ implementation of the budget. It might then missible.