C-296/93

OPINION OF MR LENZ - J O I N E D CASES C-296/93 AND C-307/93

OPINION OF ADVOCATE GENERAL LENZ delivered on 29 June 1995 "

Contents

A — Introduction I - 799 B — Opinion 1-804 (1) Competence of the Commission — Infringement of Article 6(7) (Regulation (EEC) N o 805/68) 1-804 (a) The case-law I - 806 (b) Extent of powers under the fifth indent of Article 6(7) I - 807 (c) Article 5 (Regulation (EEC) N o 805/68) I - 810 (d) Article 155 of the EC Treaty 1-812 (2) Interim conclusion 1-813 (3) Proportionality I - 813 (a) The Commission's objectives I - 813 (b) Its findings of fact I - 814 (c) Suitability I - 816 (d) Necessity I - 818 (4) The prohibition of discrimination I - 820 (a) Different treatment I - 820 (b) Justification I - 821 (5) Protection of legitimate expectations I - 823 (a) Expectation deserving protection on the basis of encouragement by the Commission to adopt a certain course of conduct I - 823 (b) Sufficient regard I - 826 (6) Breach of fundamental rights I - 826 (a) Property 1-826 (b) Freedom to exercise a trade I - 826 (7) Misuse of powers I - 827 (8) Breach of essential procedural requirements I - 827 Costs 1-827 C — Conclusion I - 827

* Original language: German.

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Article 5(2) lists the products for which 5. Article 27 regulates the so-called manage- intervention measures may be taken: adult ment committee procedure. In that pro- bovine animals and fresh or chilled meat cedure the Commission's representative pro- poses certain measures to the committee. The committee can deliver an opinion within a 1 — Regulation (EEC) N o 805/68 of the Council of 27 June time-limit to be set by the chairman. The 1968 on the common organization of the market in beef and Commission can adopt measures which are veal (OJ, English Special Edition 1968 (I), p. 187). 2 — Fourth recital in the preamble to Regulation N o 805/68. immediately enforceable, without having to

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wait for that opinion. Only if those measures 8. The preamble further shows that the are not in accordance with the committee's Council's aims include the promotion of opinion is the Council informed. The Coun- extensive production. 6 With extensive as cil, acting in accordance with the voting pro- opposed to intensive production, the animals cedure under Article 43(2) of the EC Treaty, are kept on pasture and are not fed with spe- can then take a different decision. cial feedstuffs or treated with hormones.

6. The most important provision of Regu- 9. Regulation No 2066/92 amends Article lation N o 805/68 for the instant cases is 6 by laying down annual maximum quanti- Article 6, as amended by Council Regulation ties for intervention buying-in, gradated as (EEC) N o 2066/92 of 30 June 1992 3 (herein- follows: after 'Article 6 of Regulation N o 805/68'). Regulation N o 2066/92 was adopted in the context of the reform of the common agri- cultural policy. — 750 000 tonnes for 1993,

11. Article 6(7) refers to the abovementioned — any transitional provisions necessary for procedure under Article 27. It provides as the implementation of these arrange- follows: ments shall be adopted.

'Under the procedure provided for in Article 27:

The Commission shall decide on:

— the categories, qualities or quality groups of products eligible for intervention shall be determined,

— opening intervention as referred to in paragraph 4 and suspending it where one or more conditions laid down in that — the opening or reopening of tender pro- paragraph no longer apply, cedures and their suspension in the case referred to in the last indent of paragraph 3 shall be decided,

— suspending buying-in as referred to in — the buying-in prices and the quantities the first indent of paragraph 3.' accepted for intervention shall be fixed,

It is this provision which France and Ireland both challenge. 15. By Regulation (EEC) N o 685/93 ' the Commission added a further criterion to the provisions of Article 4. The new provision

7 — Commission Regulation (EEC) N o 859/89 of 29 March 1989 laying down detailed rules for the application oí inter- 16. O n 25 May 1993 France brought an vention measures in the beef and veal sector (OJ 1989 L 91, action against the Commission before the f>. 5). That regulation was repealed by Commission Regu- ation (EEC) N o 2456/93 of 1 September 1993 laying down Court of Justice, asking the Court to: detailed rules for the application of Council Regulation (EEC) N o 805/68 as regards the general and special interven- tion measures for beef (OJ 1993 L 225, p. 4). Regulation N o 2456/93 applies from the second invitation to tender of Sep- tember 1993. I shall not discuss Regulation N o 2456/93, since the parties have made no submissions regarding it. 8 — Council Regulation (EEC) N o 1208/81 of 28 April 1981 determining the Community scale for the dassificauon of carcases of adult bovine animals (OJ 1981 L 123, p. 3). — annul Commission Regulation (EEC) 9 — Commission Regulation (EEC) N o 685/93 of 24 March 1983 amending Regulation (EEC) N o 859/89 laying down N o 685/93 of 24 March 1993 amending detailed rules for the application, of general and special inter- Regulation (EEC) N o 859/89 laying vention measures in the beef and veal sector (OJ 1993 L 73, p. 9). down detailed rules for the application of

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general and special intervention measures 18. The Commission contended in each case in the beef and veal sector; that the Court should:

OPINION OF MR LENZ — JOINED CASES C-296/93 AND C-307/93

B — Opinion fourth indents of paragraph 7. If, under the first indent of paragraph 7, the Commission can determine the 'categories, qualities or quality groups of products eligible for inter- vention', that defines the scope of the Com- mission's competence to determine the prod- (1) Competence of the Commission — ucts eligible for intervention. Beyond that, Infringement of Article 6(7) (Regulation the Commission cannot introduce any limi- (EEC) No 805/68) tations.

22. In support of their actions for annulment under Article 173 of the EC Treaty, Ireland and France first allege breach of a rule of law, namely Article 6(7) of Regulation N o 25. France argues that the Council itself 805/68, and lack of power for the Commis- defined the individual categories by Regu- sion to enact the contested regulation. They lation N o 1208/81 determining the Commu- submit that only the Council, not the Com- nity scale for the classification of carcases of mission, could introduce a maximum weight adult bovine animals. for carcases.

23. Of importance in this connection, t o begin with, is Article 6(7) of Regulation N o 26. It submits that Article 3(1) of that regu- 805/68 and the extent of the powers therein lation determines the categories of carcases conferred on the Commission. In particular, of adult bovine animals. They depend on the the mutual relationship of the provisions in animals' sex and age. Article 3(2) provides the individual indents of paragraph 7 must for carcases to be graded according to con- be examined. formation and fat cover.

30. In its view, however, the provision in the fifth indent, that is, the power to implement 32. The Commission considers that those Article 6, should be interpreted more two measures are no longer adequate to broadly than the preceding provisions. The attain the maximum annual quantities fixed Commission refers in this respect to the by the Council without starting market Court's case-law acknowledging that the prices spiralling downward, which is pre- Commission has extensive powers above all cisely what the Commission is to prevent. ' 3 in agricultural policy. According to the The Commission therefore had to introduce Court, the Commission alone 'is able contin- a further measure, namely the limit on car- ually to follow with attention trends on the case weights. Since that measure was a means agricultural markets and to act with urgency for attaining the objective defined in Article as the situation requires'. The limits of such 6, the Commission acted within the scope of an extensive power are to be judged by the its implementing power. basic general objectives of the organization of the market rather than by the literal meaning of the enabling provision. ,0 11 — Second recital in the preamble to Regulation N o 2066/92. 12 — The intervention purchases are first offered for tender by the Commission. To reduce the quantities thereupon ten- dered, reduction coefficients are determined (Article 11(3) 10 — Case 23/75 Rey Soda v Cassa Conguaglio Zucchero [1975] of Regulation N o 859/89). ECR 1279, paragraphs 11 and 14. 13 — See the fifth indent of Article 6(7) of Regulation N o 805/68.

35. In the present case too, the Council del- egated implementation to the Commission (fifth indent of Article 6(7) of Regulation No 805/68). The only question is to what extent it transferred its powers. 37. Also of interest in this connection is the Opinion in Case C-240/90, 18 according to which there is a presumption that, except in the specific cases where the Council decides (a) The case-law it is appropriate to exercise the implementing powers itself, any necessary implementation of the rules laid down by the Council is

36. In the field of agriculture, as the Com- 15 — Joined Cases 279/84, 280/84, 285/84 and 286/84 Rau v mission too submits, that extent is given a Commission ("Christmas butter") [1987] ECR 1069, para- graph 14. wide interpretation by the Court. The Court 16 — Case 27/85 Vandemoortele v Commission ('Christmas but- said in Rey Sodau that it follows from ter") [1987] E C R 1129, paragraph 14. 17 — Case 265/85 Van den Bergh en Jürgens v Commission [1987] ECR 1155, paragraph 14. 18 — Opinion of Advocate General Jacobs in Case C-240/90 Germany v Commission [1992] ECR 1-5383, at 14 — Case 23/75, loc. cit. (see note 10). p. 1-5404.

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delegated to the Commission. That presump­ objectives of the organization of the mar­ tion has particular force in the sphere of the ket. common agricultural policy. In any case, however, the Council can retain a degree of control by selecting the management com­ 9 mittee procedure. ' (b) Extent of powers under the fifth indent of Article 6(7)

38. However, it follows merely that the Council can confer extensive powers on the 40. The question in the present case is thus Commission in the field of agriculture; that whether the Council conferred extensive does not mean that it must do so in every power on the Commission by means of the case. If the Council has in fact not conferred fifth indent of Article 6(7) and whether the any extensive powers, the Commission — Commission regulation at issue here was according to the Court's case-law — can covered by that extensive power. adopt only the implementing provisions which are not contrary to the basic regu­ lation or the implementing rules of the Council. 2 0

context of the review of the proportionality the ground that no aid had been provided for of the measure. by the Council and the Commission was consequently unable to introduce or imple- ment such an aid.

43. The Commission accordingly acted within its power to determine implementing measures, unless that power was not an extensive one, but was limited by the Coun- 46. In the present case there is no extensive cil. In the cases where the Court assumed conferment of powers on the Commission that the Commission had extensive power, by the Council. The Council does not dele- authority had been conferred on the Com- gate the implementing measures to the Com- mission by general wording. At any rate, the mission by general wording only. O n the regulations contained no details of which contrary, it gives very precise instructions in measures the Commission was to adopt in Article 6 of Regulation N o 805/68 for the implementing the article and what criteria it implementation of the intervention scheme, was to follow. determining for instance the annual maxi- mum quantities for buying in by the inter- vention agencies. It also lays down the con- ditions under which intervention measures can be adopted. Above all, however, it defines very precisely in Article 6(7), by which it delegates implementation of Article 44. In this connection the Commission 6 to the Commission, what the Commission refers to my Opinion in Ran v Commis- is to regulate in the context of intervention sion. 23 I would like to point out, however, and by what criteria. From that it is apparent that even then I expressed the view that the that the Council does not intend entirely to action taken by the Commission must in all transfer the implementation to the Commis- cases be in line with what the Council has sion. It wishes rather to play a pan in the provided. The Commission cannot therefore decision-making itself; which it in fact does, cite my Opinion in support of its argument by making use of the possibility open to it that the Council conferred very extensive under Article 145 of the EC Treaty and powers on it. defining the conditions of implementation by the Commission.

the Commission powers so extensive that it specified criteria in the basic regulation. 24 If, could circumvent the rules laid down by the then, even the provisions in the Council's Council? basic regulation limit the Commission's powers, all the more must the criteria it lays down for implementation by the Commis- sion have limiting effect. Nor is that contra- dicted by the judgment in Case C-240/90. 25 The Court admittedly held that the Com- 48. If, then, the Commission's powers are mission did have power even where the not extensive, their limits are defined by the Council had laid down detailed rules with rules laid down by the Council. respect to implementation by the Commis- sion; it did not, however, express an opinion on the question whether extensive powers had been conferred on the Commission. Instead the basis of its reasoning was that the 49. As France rightly submits, the Council Commission had not regulated any 'essen- transferred to the Commission only the tial' questions of agricultural policy. Whether determination of the categories, groups and that is also the case here remains to be exam- qualities eligible for intervention. Since, ined. however, carcase weight is not a criterion of the classification scale, the Commission therefore cannot introduce such a criterion.

50. The United Kingdom takes a different 53. Such a restriction to quality groups is view and submits that there is no difference, also perfectly understandable. The market as regards the effects, between the exclusion functions within the classification scales of certain qualities or groups and the exclu- determined by the Council. It is therefore to sion of products above a certain weight. be regulated by implementing measures within the framework of those classification scales. New criteria are not to be introduced.

55. The Council imposed that limitation quite deliberately. It is not disputed that a maximum weight for carcases was discussed 58. Also unacceptable is the United King- by the Council but in the end rejected. As dom's view based on a connection between the United Kingdom too submits, that can categories and carcase weights. There is cer- certainly not be taken as an indication of the tainly a connection between the categories, division of powers. But it does show the which are defined by the age of the animals, Council's intention not to introduce a and the weight. However, that connection is weight limit. It thus did not forget to men- not precise enough for a particular weight to tion a weight limit in the first indent of Arti- be allocated to a particular category. For that cle 6(7), but deliberately excluded it from the reason a rule which relates to categories can competence of the Commission. never also determine weight.

56. The Council provided for a weight limit (c) Article 5 (Regulation (EEC) No 805/68) in one case only, namely in Article 6a(2) of Regulation N o 805/68 as amended by Regu- lation N o 2066/92. 2b From the fact that it adopted that provision itself, it may be con- cluded that a weight limit can only be imposed exceptionally, and not by the Com- mission.

59. The applicants rely on Article 5 of Regu- lation N o 805/68 as a further argument for the Commission not having power. Under Article 5(3), only the Council is competent 57. The converse conclusion drawn by the to amend the list of products eligible for United Kingdom, namely that the particular intervention measures. They argue that by introducing a weight limit for carcases the Commission effected an amendment of the 26 — Under that provision, intervention agencies can buy in meat list, which it had no power to do, according from male bovine animals of 150 to 200 kg carcase weight (calves), by way of derogation from Article 5(2). to Article 5(3).

62. The Court also held in Koster that the 64. Article 2 of Regulation N o 805/68, basic decisions are to be taken by the Coun- which has been cited in this context, is not cil; 'basic' means the basic direction of Com- relevant here, since it governs the facilitation munity policy. 27 of action by the trade organizations con- cerned.

63. The division of powers between the Council and the Commission, as defined by 65. The Commission's argument that it could not have attained the objective laid down by the Council without adopting the contested regulation does not affect the 27 — Case 25/70 Einfuhr-und Vorraustellefür Getreide und Fut- termittel v Köster [1970] ECR 1161, paragraph 6. Commission's lack of power. Even if, as it

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70. To conclude the section on the powers of the Commission, I would like to address Ireland's submission that there is also an infringement of the first and fourth indents 67. As proof that it did have power, the of Article 155 of the EC Treaty. Commission submits, finally, that it had already set a weight limit for carcases in the context of private storage aid. The applicants argue, on the other hand, that the private storage aid system is quite different from the intervention system. With private storage aid there are n o such narrow restrictions as with 71. As the United Kingdom rightly argues, intervention. The United Kingdom does not the first indent relates only to the supervi- accept, however, that the Commission's sion of the application of Community law powers are wider in the sphere of private by others. The Commission does indeed storage aid than in the sphere of interven- examine its own conduct too, but in advance, tion. not afterwards under Article 155.

68. That need not be considered further here, since it cannot in any case be deduced 72. There is an infringement of the fourth from the fact that the Commission has indent in this case, since if the Commission already on one occasion introduced a weight exceeds its powers, it is not exercising the limit that the corresponding power had in powers conferred on it by the Council for fact been conferred on it. implementation.

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(2) Interim conclusion

(a) The Commission's objectives

74. The above observations already suffice to uphold the application and annul the 77. As a first step in examining proportion- ality, it therefore makes sense to consider what objectives the Commission is pursuing by means of the regulation at issue here. 28 — OJ 1989 L 91, p. 5. 29 — Council Regulation (EEC) N o 571/89 of 2 March 1989 amending Reguládon (EEC) N o 805/68 on the com- mon organization of the market in beef and veal, repealing Regulation (EEC) N o 1302/73 and extending Regulation (EEC) N o 4132/88 (OJ 1989 L 61, p. 43). 30 — Case C-256/90 Mignini [1992] ECR 1-2651, paragraph 16.

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78. To begin with, its aim is to reduce beef wide discretion in the assessment of factual and veal production and to reduce interven- situations in the field of trade in agricultural tion buying-in. That corresponds to the products. In other words, the Court will objectives stated by the Council in Regu- examine only whether there is a manifest lation N o 2066/92. error or misuse of powers or whether the Commission clearly exceeded the bounds of its discretion. 3I

In the beef and veal market there is overpro- duction, which can be attributed to the increase in carcase weights. The increase in weight in turn has various reasons. One is 80. In the context of the review of suitabil- that in an uncertain market situation and ity, the next question is whether the objec- faced with the consequent low market prices, tives defined above can be attained by means many producers defer slaughtering their ani- of the contested regulation. That also mals, in order to wait until the market price includes the question whether the Commis- is higher or else to sell the meat to the inter- sion assessed the starting point or situation vention agencies. Other reasons are that in correctly and hence also correctly incorpo- recent years more high-energy feed has been rated it into its examination. used, its cost has fallen, more and more hor- mones are used, and genetic progress makes it possible to rear very heavy breeds.

81. The Court's case-law allows the Com- 31 — Case 29/77 Roquette Frères v France [1977] ECR 1835, paragraphs 19, 20 et seq.; Case 136/77 Rocke v Hauptzol- mission and the management committee a laml Maim [1978] ECR 1245, paragraph 4.

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89. The Commission's assertion that slaugh- 87. France submits that it has not been tering is partly deliberately deferred is not shown that it is precisely the heavy animals expressly contradicted by the applicants which are sold to intervention agencies; either. Ireland merely argues that in the case

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of the breeds reared in Ireland, earlier the Commission. Here too the Commission slaughter is not possible. Since the animals must be allowed a wide discretion, so that it are reared extensively, on pasture, their need only be examined whether the measure growth is slower than with intensive rearing. is patently unsuitable for achieving the The date of slaughter depends on the ratio of objectives pursued. 3 2 muscle to fat cover. Ireland argues that the optimum slaughter date, that is, the optimum relationship between those criteria, is reached later in the case of extensive rearing.

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95. As already stated, it cannot be shown that the Commission committed a manifest error in proceeding from the assumption that earlier slaughter of the animals is possible. For that reason, Ireland's argument must fail.

97. The Commission also wished to bring it about that heavy bovine animals were no 96. Ireland's argument would also have to longer produced if there was no free market, be rejected if the weight limit for carcases that is, no demand for them any more.

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99. The measure may also ensure that it does (d) Necessity not happen that, in times of crisis when the market price is low, producers do not orien- tate the time of slaughter to the market but wait for the market price to rise again, oth- erwise selling to the intervention agency. The latter possibility is now excluded from the outset. The market is admittedly regulated 102. The final point to be considered in this with respect to all products, including those connection is the question of necessity. which are not directly bought in by the intervention agencies. But intervention is no longer a sure customer. That may perhaps induce producers to watch the market more closely, in order to slaughter earlier if need be and thus possibly enjoy the benefits of intervention. 103. The Court assesses this by considering whether the measures go beyond what is appropriate and necessary to attain the objective pursued. The measure must corre- spond to the importance of the aim and be necessary to achieve it. 3 3

33 — Case C-319/90 Pressler v Germany [1992] ECR 1-203, para- 100. The measure is thus suitable for attain- graph 12; Case C-199/90 Italtrade [1991] ECR 1-5545, paragraph 12; Case C-174/90 Hoche [1990] ECR 1-2681, ing the Commission's objectives. paragraph 19.

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104. According to the Commission, the con- have to be set. Since producers know that tested regulation is an essential instrument their offers will be reduced, they are set that for ensuring the functioning of the market much higher to begin with, so that the and attaining compliance with the annual Commission is compelled to set the reduc- maximum quantities determined by the tion coefficients correspondingly high. As a Council. result, the coefficients have reached a level of 90% to 9 5 % . A further increase is no longer possible, since a reduction by 100% would mean no more meat being bought in.

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measures were not needed. In addition, Ireland and France submit that as a result of Member States are allowed a period of time the setting of an upper limit on carcase in which to convert their production. In weights, it is above all the products of France response to the applicants' submission that and Ireland which are excluded from inter- the time is not sufficient, it must again be vention. They argue that while there is pointed out that the intervention measures admittedly no express provision in the regu- are not a second market, but merely special lation that products of France and Ireland measures in the event of a particular weak- can no longer be sold to the intervention ness of the market. Besides intervention agencies, the weight limit is determined in buying-in, there also still remains the possi- such a way that it is precisely the products of bility of private storage aid, for which — as France and Ireland which are excluded from the Commission submitted at the hearing intervention. The applicants submit that up without being contradicted — there is no to 60% of their production is excluded. corresponding weight limit for carcases.

(a) Different treatment 111. The Commission's measure may there- fore be taken to be appropriate and neces- sary and hence not disproportionate.

(4) The prohibition of discrimination 114. In examining whether there is discrimi- nation, the first question is whether there is a difference in treatment in the first place. It is a fact that the applicants' products are treated differently from those of other Mem- ber States with respect to intervention 112. The applicants' third plea in the context buying-in. The Commission admittedly of Article 173 of the EC Treaty alleges argues that other Member States are affected breach of the prohibition of discrimination too. But even if that is the case, they are not under the second subparagraph of Article affected — as is not disputed — to such an 40(3) of the EC Treaty and Article 7 of the extent as the applicants. EEC Treaty (now Article 6 of the EC Trea- ty)·

116. I have already pointed out above that exists to support the market, all producers the intervention agencies are not a 'second must in principle orientate their production market'. The intervention system is rather to to the market. The intervention measures be understood as a combination of various intervene only in exceptional cases where the measures, all serving the purpose of stabiliz- market has been weakened. ing the beef and veal market. The interven- tion agencies buy in certain quantities of beef and veal, in order thereby to reduce supply, i. e. the amount of meat on the market. The result is that the market is strengthened gen- erally, i. e. for all beef and veal products, and prices rise. The Commission is responsible 118. For that reason there is no different for determining the quantities and categories treatment here. of the bought-in meat in such a way that the effect is as great as possible. If, then, the intervention agencies buy in meat from spec- ified producers, they do not do so in order to benefit those producers specifically. Instead their intention is to benefit all sup- (b) Justification pliers on the market. From that it follows, however, that regardless of which producers' meat is sold to the intervention agencies, there is a positive effect for all suppliers on the market. The exclusion of certain prod- ucts from intervention measures thus cannot be regarded as a disadvantage for those prod- 119. Even if it were concluded that in this ucts, unless the producers produced only for case there was different treatment of France intervention. The applicants' products bene- and Ireland as opposed to other Member fit from the stabilization of the market to the States, that would be justified. same extent as all other products. There would be discrimination or different treat- ment only if the products of France and Ire- land were excluded from the intervention measures' beneficial effects.

125. Ireland submits in this connection that 122. That is not sufficient for justification, in a comparable case the Commission however, since the objective criterion must allowed Denmark special treatment in order ensure a proportionate division of the advan- to alleviate especially serious consequences. tages and disadvantages for those concerned. The Commission points out that the provi- That is doubtful in the present case, since, sion in question was introduced after Den- assuming that there is different treatment, mark had drawn attention to the problem in there are only two Member States which suf- the negotiations on reform of the agricultural fer its disadvantages. policy. It states that Ireland did not avail itself of that opportunity; it made observa- tions only in the management committee, and those observations were taken into account. Moreover, it argues, the case was not comparable: Danish products were to be excluded completely from intervention, whereas that is not the case with Irish bovine 123. In my Opinion in Sitpa35 I already animals, since if the animals were slaughtered interpreted the Court's case-law 36 as mean- earlier they could still be sold to the inter- ing that further examination of justification vention agencies. Since no manifest error on must be restricted to considering whether the part of the Commission can be identified, objectively clear reasons for the method cho- and since it must be allowed a wide discre- sen simply cannot be identified and the tion, those observations suffice for it to be action was thus arbitrary. concluded that there is no different treat- ment.

127. Finally, I would also note that the changeover to continental-type breeds, Commission rightly observes that in the which are heavier. context of the agricultural policy reform it was inevitable that there would be disadvan- tages for some Member States, but that had to be seen in the overall context, however, and the individual provisions of the reform balanced the advantages and disadvantages. 131. Furthermore, Ireland argues, new measures in the milk sector have entailed increases in animal weights. The intended decrease in the number of dairy cows has resulted in an increase in the number of 128. It follows that there is no breach of the suckler cows. Of those cows, a quarter prohibition of discrimination. belong to continental, i. e. heavy breeds, and they are also largely cross-bred with such breeds. The exclusion of heavy breeds from intervention measures, now decided by the Commission, infringes Ireland's legitimate expectation that the Commission would con- tinue to support the rearing of heavy breeds. 129. Finally, I must address certain pleas in Ireland refers in this connection to the law put forward by Ireland only in Case Court's judgments in Mulder17 and Von C-307/93. Deetzen.38 The Court's acceptance of a legitimate expectation in those cases was dependent on the fact that the traders had been encouraged by a Community act to adopt a particular course of conduct. 39 (5) Protection of legitimate expectations

(a) Expectation deserving protection on the 132. There was no such encouragement in basis of encouragement by the Commission this case, however. With respect to the adap- to adopt a certain course of conduct tation of production to demand in the EC, Ireland has not cited any Commission meas- ure which expressly encouraged it to adopt that conduct. N o r is any such.measure evi- dent.

138. The fact that the Council promotes extensive rearing by premiums could at the very most arouse an expectation that pro- 135. The Commission submits, on the other ducers would not be occasioned to change hand, that there would have been such their production over in the next few years. encouragement only if the rearing of heavy The trigger for a changeover of production breeds had been expressly promoted by a must, however, first of all be the market sit- premium; extensive rearing does not auto- uation. The Council intends to promote matically require heavy breeds. extensive rearing only as long as that does not clash with the main objective of the agri- cultural policy reform, which is to reduce meat production. That is apparent inter alia from the fact that the Council expressly states in the fourth recital in the preamble to Regulation N o 2066/92 that the reorienta- 136. Ireland admittedly disputes that, but, as tion of the premiums must not be reflected already stated above, the Commission must in an increase in overall production. Produc- be allowed a wide discretion in this field. It ers cannot therefore regard the promotion of must therefore be assumed that extensive extensive rearing as an encouragement to rearing does not automatically lead to produce in a way •which is no longer orien- heavier breeds. The promotion of extensive tated to the market.

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139. From all the above considerations, it could not expect precisely their products to follows that the promotion of extensive rear- be bought in as part of the intervention ing did not encourage the production of measures. heavy breeds.

141. The only expectation could therefore be that in times of crisis Irish producers would still be able to sell their products to the inter- vention agencies. As I have already shown, 144. There is thus no legitimate expectation however, the purpose of intervention is to on the part of the Irish producers which regulate the market, not to buy in specified could have been infringed by the Commis- products. That means that Irish producers sion's measure.

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145. Nevertheless, the Commission provides submits that no breach of a fundamental in the contested Regulation N o 685/93 for a right is evident. gradual limitation of maximum carcase weights, in order to maintain the 'legitimate confidence of producers'. 40

(a) Property

(b) Sufficient regard

I-826

FRANCE AND IRELAND v COMMISSION

(7) Misuse of powers regulation at issue here does not have an ade- quate statement of reasons, since the reasons given are wrong. The duty to state reasons is governed by Article 190 of the EC Treaty, which provides that regulations must state 150. Ireland's assertion that the Commission the reasons on which they are based. The misused its powers need not be gone into Commission did that in this case. Whether further either. Ireland submits in this con- the Commission's reasoning is correct is to nection only what it has already submitted be examined in another context, namely the with reference to the Commission's lack of question of proportionality, and is not rele- power. Misuse of powers, however, means vant here. precisely that an institution has used its dis- cretion for a purpose other than that stated. There is no indication here that the regu- lation was adopted for a purpose other than that stated. 152. Accordingly, of all the pleas in law raised, only the Commission's lack of power and breach of Article 6(7) of Regulation N o 805/68 are founded.

(8) Breach of essential procedural require- ments Costs

151. The final ground for annulment put forward by Ireland, breach of essential pro- In accordance with Article 69(2) of the cedural requirements, is also not made out Court's Rules of Procedure, the unsuccessful here. In Ireland's opinion, the Commission party should be ordered to pay the costs.

C — Conclusion