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OPINION OF ADVOCATE GENERAL SAGGIO delivered on 24 February 2000 *

1. In an action brought on 29 May 1998, nity policies on transport and tax harmo- the Commission of the European Commu- nisation converge (transport, because such nities applied to the Court under the second charges affect traffic within the Commu- paragraph of Article 169 of the EC Treaty nity; tax harmonisation, because they are (now the second paragraph of Article 226 parafiscal). In that connection, Directive EC) for a declaration that the Republic of 93/89, adopted on the basis of Articles 75 Austria (hereinafter 'Austria') had infringed and 99 of the EEC Treaty (as amended by Article 7(b) and (h) of Directive 93/89/ the Treaty on European Union, and later to EEC, 1 in respect of certain changes — become Articles 71 EC and 93 EC), con- made in 1995 and 1996 — in the system tains a number of provisions specifically of tolls for vehicles with more than three concerned with tolls and user charges. axles travelling a full itinerary on the According to the second and third indents Brenner motorway. The importance of the of Article 2, 'toll' means 'payment of a motorway in question for the carriage of specified amount for a vehicle travelling the goods by road between Germany and Italy distance between two points' on a certain and the economic issues raised by the infrastructure, the amount being based on dispute call for a detailed examination of the distance travelled and on the category the Community provisions and of the tariff of the vehicle, while the term 'user charges' regulations on which the Commission's means 'payment of a special amount con- charges against Austria are based. ferring the right for a vehicle to use [certain infrastructures] for a given period'. 2I should also point out that, for the purposes of the Directive in question, 'vehicle' means only 'a motor vehicle or articulated vehicle combination intended exclusively for the carriage of goods by road and with a maximum permissible gross laden weight The relevant Community provisions of not less than 12 tonnes' (Article 2, fourth indent). On the specific subject of motorway tolls, Articles 7 to 9 contain rules designed to harmonise, at least to

some extent, the most significant aspects of preserved 'until the Council has adopted those tolls in order to contribute to the new legislation in the matter'. 9The Court gradual 'elimination of distortions of com- rejected the Parliament's request that the petition between transport undertakings in Court should impose on the Council a time- the Member States'. 3For the purposes of limit within which it must adopt new the present case, it must be noted that, legislation in the matter but observed at under Article 7(b) and (h) of Directive the same time that 'the fact none the less 93/89, tolls 'may not discriminate, directly remains that the Council is under a duty to or indirectly, on the grounds of the nation- put an end within a reasonable period to ality of the haulier or of the origin or the infringement it has committed'. 10 destination of the vehicle', 4and toll rates 'shall be related to the costs of construct- ing, operating and developing the infra- structure network concerned'. 5The time- limit for bringing national legal systems into line with the Directive was set at 1 January 1995. 6

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the origin or destination of the vehicle' 15 The relevant tariff regulations and 'the weighted average tolls shall be related to the costs of constructing, operat- ing and developing the infrastructure net- work concerned'. 16 The new directive also shows greater concern for environmental protection and the balanced development of transport networks, 17 extending to the The Brenner motorway amount of the tolls. Thus, Article 7(10) provides that Member States may vary the rates at which tolls are charged according to 'vehicle emission classes, provided that no toll is more than 50% above the toll 5. The Brenner motorway, technically charged for equivalent vehicles meeting the described as the A13, leaves the Inntal strictest emission standards,' and 'time of motorway (A12) at Innsbruck and runs for day, provided that no toll is more than a total distance of 34.5 km through the 100% above the toll charged during the Tyrol to the Italian border at the Brenner cheapest period of the day', provided that pass (1 376 m above sea-level). The road in 'any variation in tolls charged with respect question, which follows a winding route to vehicle emission classes or the time of through inaccessible country and has many day shall be proportionate to the objective bridges and viaducts, is the most sensitive pursued'. 18 stretch of a motorway complex of consid- erable importance to the Community, being designed to link Italy with Germany and thus with the other countries of northern Europe. The railway and national road B182, which is closed to goods vehicles over 7.5 tonnes, follow the same route as the motorway.

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3 km; Patsch-Igls, 7 km; Stubaital, 10 km; The toll system Matrei-Steinach, 19 km; Nösslach, 27 km; and lastly Brennersee, 33 km. The stations for collection of the motorway tolls are located at those exits; the only one on the motorway itself — and in fact the most important one for heavy goods traffic — is 8. From the time the Brenner motorway located at Schönberg, about 10 km from came into operation, Austria has applied a Innsbruck, immediately after the Stubaital semi-open toll system ('halb-offenes Maut- exit. system') relying on one main toll-station located on the motorway — at Schön- berg — through which most of the heavy goods traffic passes, and secondary toll- stations located at the motorway exits mentioned above. The toll system devised by the Austrian Government distinguishes between three types of itinerary ('Strecke'):

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(about 16 km), as well as shorter stretches The toll system for vehicles with more than within those sections (for example, three axles Innsbruck West to Patsch-Igls, 7 km, or Matrei-Steinach to Nösslach, about 7 km). The toll for partial itineraries is collected on entry or departure, as appropriate, at the secondary toll-stations on the itineraries in question; 10. It is apparent from the schedules of tariffs appended to the Commission appli- cation 20 that on 30 June 1995 the toll system for vehicles with more than three axles, depending on the type of itinerary chosen, was as follows:

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of a 100-point season ticket brought the g o v e r n m e n t a d o p t e d a d e c i s i o n 2 5 on cost of the journey down to ATS 200, or 30 May 1995, under which the first part ATS 20 per km (200 - = - 10 = 20) for the of the tariff reform suggested by the Tyrol I n n s b r u c k - S c h ö n b e r g section and ATS authorities was to enter into force on 1 July 12.90 per km (200 -=- 15.5 = 12.90) for 1995. The most important changes were the Matrei-Brenner section. The system that the special provisions for less noisy was essentially the same for less noisy vehicles were abolished 26 and the principal vehicles; 22 concessions for vehicles with more than three axles (the '100-Punktekarte' and '100-Fahrtenkarte') were replaced with the simple option of purchasing a prepaid card ('Wertkarte'), but only for the partial itineraries (ATS 200 instead of ATS 300 for the Innsbruck-Schönberg section, and ATS 240 instead of ATS 300 for the Matrei- (c) short itinerary: a single ticket cost ATS Brenner section) and the short itinerary 100, or ATS 66.67 per km (100 -=-1.5 = (ATS 80 instead of ATS 100). 66.67), while the purchase of a 100-point season ticket brought the cost of the journey down to ATS 80, or ATS 53.33 per km (80 -=-1.5 = 53.33). The system was essentially the same for less noisy vehi- cles. 2 3

1 2 . T h e A u s t r i a n federal p a r l i a m e n t 11. O n 17 May 1995, the Tyrol regional (Nationalrat), by resolution of 16 Novem- parliament (Tiroler Landtag) passed a reso- ber 1995, 27 invited the federal government lution ('Entschliessung') inviting the regio- to supplement the new regulation on Bren- nal government to take the necessary steps ner motorway tolls in the manner requested to enable the federal authorities to adopt a by the Tyrol regional parliament. Following new regulation on the tariff system applic- that political representation, the federal able to the Brenner motorway, with special government adopted a further decision 2 8 reference to heavy goods traffic. 2 4 As a on 9 January 1996, under which all the result of that political initiative, the federal

13. On 1 February 1996, after this com- plex two-stage tariff reform, the system of tolls on the Brenner motorway for vehicles (c) short itinerary: a single ticket cost ATS with more than three axles was as follows: 100, or ATS 66.67 per km, (as before) while the purchase of a prepaid ticket brought the cost of the journey down to ATS 80, or ATS 53.33 per km. The system was the same for journeys made by night or for less noisy vehicles with less pollutant emissions. (a) full itinerary: a single ticket cost ATS 1 150, or ATS 33.33 per km (1 150 ÷ 34.5 = 33.33) for less noisy vehicles with less pollutant emissions, ATS 1 500, or ATS 43.48 per km (1 500 •÷• 34.5 = 43.48) for all other vehicles, and ATS 2 300, or ATS 66.67 per km (2 300 ÷ 34.5 = 66.67) for journeys made by night (between the hours of 22.00 and 5.00). The purchase of a 14. A special half-price scheme (Halbpreis- prepaid ticket did not alter the rate regelung) was introduced for vehicles with charged; more than three axles travelling from Innsbruck to Matrei, 19 km, or Schönberg to Matrei, 9 km, and back. Under the general rules, they would have been required to pay the full rate for both outward and return journeys at the Schön- berg toll-station. However, on the return (b) partial itinerary: a single ticket cost ATS journey from Matrei to Schönberg they are 300 (as before), or ATS 30 per km for the given a free return ticket at the Schönberg toll-station, reducing the cost of the round trip by half (to ATS 1 150 or ATS 1 500 29 — The definition of vehicles with less pollutant emissions is instead of ATS 2 300 or ATS 3 000). There based on the criteria for 'EURO II' vehicles set out in Directive 88/77. See footnote 18 above. is a further concession attaching to the

15. The Austrian Government kept the Commission informed 3 0 of the tariff reform it had decided to introduce on the Brenner motorway for vehicles with a maximum permissible gross laden weight of not less than 12 tonnes and with more than three axles. After a lengthy correspon- dence with the Austrian authorities about 16. The Commission brought an action on the scope, basis and reasons for the tariff 29 May 1998 under the second paragraph changes in question, the Commission con- of Article 169 of the EC Treaty (now the cluded that there had been a breach of Community law in that the Austrian autho- rities had infringed Article 7(b) and (h) of 31 — The letter, No SG(96)D/3729, formally inviting the Austrian Government to submit observations, is repro- Directive 93/89 and it therefore sent the duced in Annex 10 to the Commission's application. 32 — That letter is reproduced in Annex 11 to the Commission's application. 33 — Sent to the Austrian Government by letter no SG(97)D/ 30 — By letters of 31 May 1995 and 15 January 1996, repro- 202, reproduced in Annex 14 to the Commission applica- duced in Annexes 2 and 7 to the Commission's applica- tion. tion. 34 — Reproduced in Annex 15 to the Commission's application.

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second paragraph of Article 226 EC), — order the Commission to pay the costs. claiming essentially that the Court should:

— declare that, by raising from 1 July 1995 and from 1 February 1996 some The availability of an action for infringe- of the tolls for a full itinerary on ment of a directive where the directive has Brenner motorway, a transit route been annulled but its effects have been through Austria used predominantly preserved provisionally by vehicles from other Member States, the Republic of Austria has infringed Article 7(b) of Directive 93/89;

stated that the Council was 'under a duty to to comply with Directive 93/89 within the put an end within a reasonable period to prescribed time-limit, the French Republic the infringement it has committed', 37 but had failed to fulfil its obligations under that to discuss the length of that period and the directive. The French Government did not possible consequences of excessive delay raise the point now brought up by Austria, does not appear to be relevant for the nor did the Court feel obliged to consider it purposes of the present case in which it is of its own motion — as it could have simply a question of assessing the basis of done. 41 If it is thus possible to bring an the alleged infringements of Directive action for infringement in the case of 93/89. The Court's ruling seems to me to failure to transpose a directive where the be sufficiently clear: the effects of the directive has been annulled but its effects annulled directive are to be preserved until have been preserved, it will a fortiori also the Council has adopted new legislation in be possible to bring an action for infringe- the matter 38 and that in turn means that ment of some of the provisions of that the Commission may bring an action for directive. infringement against any Member State that disregards the annulled directive. The need to avoid discontinuity in the pro- gramme for the harmonisation of transport taxation and important considerations of legal certainty provide justification — as Advocate General Léger observed 39 — for preserving the effects of the annulled direc- Indirect discrimination on grounds of the tive: if in those circumstances a Member nationality of the carrier State was free to disregard the provisions of the directive with impunity and the Com- mission was automatically prevented from taking any action to restore the rule of law, the useful effect of the ruling contained in the operative part of the judgment of 5 July Preliminary remarks 1995 would be irredeemably compromised.

discriminate, directly or indirectly, on the operators may also apply in cases where the grounds of the nationality of the haulier'. 42 system gives preferential treatment to ves- sels flying the national flag, 'since vessels flying the national flag are generally oper- ated by national economic operators, whereas transport undertakings from other Member States as a rule do not operate ships registered in the State applying that system'. 46 The Court added that 'that finding is not affected by the fact that the class of less favourably treated economic 22. According to the Commission, the operators may also include national trans- discrimination in question is not direct, in port undertakings which operate vessels that the Austrian regulations are not based not registered in their State, or by the fact on the nationality of the carrier and apply that the class of operators given favourable indistinctly both to vehicles belonging to treatment may include transport undertak- Austrian carriers and to those belonging to ings from other Member States which carriers from other Member States. It operate vessels registered in the aforesaid should therefore be regarded as a form of State, since the class receiving favourable indirect discrimination, also covered by treatment consists essentially of nationals Article 7(b) of Directive 93/89 and fully of that State.' 47 Iconsider that the princi- recognised by the Court, which has con- ples underlying that case-law may apply sistently held that 'the rules regarding equal equally well to the sector of carriage of treatment forbid not only overt discrimina- goods by road. It is true that the Commu- tion by reason of nationality but also all nity rules 48 on the market in the carriage of covert forms of discrimination which, by goods by road do not require that the the application of other criteria of differ- carrier (or, to be more precise, the transport entiation, lead in fact to the same result'. 43 undertaking) own the vehicle used for the The indirect discrimination on grounds of carriage of goods, but provide — with the nationality of the carrier or haulier (referred to in Directive 93/89) is based in particular reference to international car- the present case on the registration of the riage for the account of third parties — vehicle. 44 The Commission refers in that that he may have the vehicle at his disposal connection to the judgment in Corsica under a hiring or leasing contract. 49 But on Ferries, 45 where the Court held that the concept of indirect discrimination on grounds of the nationality of economic

the other hand, it is reasonable to suppose some parts of the application, 51 the Com- that in principle carriers from a Member mission's case comes down to the following State will use vehicles registered in that points, which I shall consider separately Member State, whatever the basis (owner- below: (a) the first premiss is that the tariff ship, hire, leasing) of the arrangement. 50 I changes introduced in 1995 and 1996 realise that this supposition ultimately affect only vehicles with more than three involves to some extent assuming that the axles travelling a full itinerary on the nationality of the carrier coincides with the Brenner motorway; (b) the second premiss place of registration of the vehicles he uses; is that the great majority of the vehicles in however, although such an assumption may question are registered in Member States not always be correct, it is nevertheless a other than Austria and therefore belong to reasonable and acceptable one to make non-Austrian carriers; (c) it follows from against the present background of the these premisses that there is indirect dis- carriage of goods by road in the Commu- crimination against non-Austrian carriers nity. who, it is claimed, use vehicles with more than three axles to travel a full itinerary on the Brenner motorway, compared with Austrian carriers most of whom, on the contrary, are said to use vehicles with up to three axles to travel a full itinerary on the motorway in question and vehicles with more than three axles on sections of it.

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57 — 'Alpenquerender Strassengiiterverkehr 1994', a technical study commissioned by the Federal Ministry of Economic 28. The Commission assumes that the great Affairs and completed in Vienna in March 1995. The text is attached to a letter of 15 January 1996 from the majority of vehicles with more than three Austrian Government, reproduced in Annex 6 to the axles travelling a full itinerary on the Commission's application. 58 —Letters of 27 June 1995 and 28 May 1997 from the Austrian Government to the Commission, reproduced in Annexes 4 and 15 to the Commission's application respec- tively. 55 — If we disregard a small increase from ATS 200 to ATS 240 59 — Application, point 19.2. in the reduced rate obtainable with a prepaid ticket on the Matrei-Brenner section: see point 13(b) of this Opinion. 60 — Reproduced in Annex 11 to the Commission's application. 56 — See point 14 of this Opinion. 61 — Letter of 5 June 1996, cited above, p. 6.

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trian vehicles in local and regional traf- itinerary on the Brenner motorway are not fic' 62 noting that this observation is not registered in Austria and therefore belong contested by the Austrian Government. 63 to non-Austrian carriers, may likewise be Finally, the Commission claims that the accepted. great majority of vehicles with up to three axles travelling a full itinerary on the Brenner motorway are likewise registered in Austria. 64 In that connection, it is apparent from the technical study men- tioned earlier that, in 1994, 99.6% of vehicles with up to three axles used in internal traffic, 88.2% of those used in traffic to or from localities in Austria, and none of those used for transit purposes, Comparative demonstration of indirect were registered in Austria. discrimination

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situations or in the application of the same regarded as similar — and therefore com- rule to differing situations'. 6 7 In the present parable — to the other two. In other case it must therefore be determined whe- words, it must be determined whether it is ther the toll system on the Brenner motor- possible for legal purposes to compare: a) way does in fact, after the changes made in different journeys made by vehicles of the 1995 and 1996, involve the application of same axle-type; b) vehicles of different differential tariffs to comparable situations. axle-types making the same type of journey. Indeed it is on the question of compar- ability that the Commission's action against the Austrian Government stands or falls.

Comparability of different types of journey

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The partial 46.94) for less noisy vehicles with less itineraries described in (a), (b) and (d) are pollutant emissions; ATS 1 500, or ATS the only ones that can, in my view, be used 63.14 per km (1 500 ÷ 24.5 = 63.14) for all for the purposes of comparison with a full other vehicles; ATS 2 300, or ATS 93.88 itinerary on the Brenner motorway. per km (2 300 ÷ 24.5 = 93.88) for journeys made by night; d) the partial itinerary from Matrei to the Brenner pass, approximately 15.5 km, the charge for which, following the changes in 1995 and 1996 and with a prepaid ticket, has increased slightly to ATS 240, or ATS 15.48 per km.

I do Brenner pass — and the smaller stretches not deny that such an objection goes to the within them — are regarded as 'partial very heart of the problem raised by the itineraries' 71 and are subject to the relevant Commission's comparative argument: why rules. I admit that, in view of the special should the partial itineraries — and only half-price rate applicable on that itinerary, some of them at that — be regarded as the journey described in (b) can be regarded as substantially the same as a partial 72 — The figures are shown in the table reproduced in Annex 1 to the defence. The Austrian Government has taken 20 journeys — other than the journey covering the full distance — and has shown that on 11 of these the cost 70 — See point 14 of this Opinion. per km is higher than the standard cost per km (for 'eco- 71 — See point 8(b) of this Opinion. friendly' vehicles travelling by day) for the full distance.

comparable with the full distance? The more than three axles engaged in similar answer, according to the Austrian Govern- types of carriage. It is reasonable to sup- ment, is that theoretically vehicles with pose that the vehicles in question have more than three axles are at liberty to make similar grounds for using a full itinerary on whatever journey they wish, and may thus the motorway and the partial itineraries decide, for example, to pay ATS 69.70 per mentioned by the Commission, namely the km to travel from Schönberg to Nösslach carriage of heavy goods for commercial or (approximately 16.5 km, with a toll of ATS industrial use, either in transit or to or from 1 150) to make a delivery of goods for the one of the aforesaid localities (Innsbruck, tourist infrastructure or to collect refuse. 73 Fulpmes and Matrei). There is on the other The Commission, on the contrary, main- hand no reason to include among the tains that the only stretches of the motor- partial itineraries to be considered stretches way that need to be taken into account are which in fact have little or nothing to do the partial itineraries actually used by with the carriage of goods. The objections heavy goods vehicles to meet fairly sub- advanced by the Austrian Government are stantial commercial and industrial needs. In therefore unfounded. that connection, only the city of Innsbruck and the areas round Fulpmes, near Stubai- tal, and Matrei are of sufficient commercial and industrial interest to justify an inflow of vehicles with more than three axles: apart from the city of Innsbruck, the capital of the Tyrol and a major economic centre, the area round Fulpmes contains firms manufacturing mountain products and many large undertakings, particularly in the textile, construction and meat sectors, are established in the vicinity of Matrei. All the other towns or localities situated along the Brenner motorway are of more or less exclusively tourist interest and there is no 36. In my view, the fact that there is very reason for an inflow of heavy goods traffic. little heavy goods traffic on the partial It follows, according to the Commission, itineraries on the Brenner motorway is that the only partial itineraries to be taken irrelevant. According to the available sta- into account should be those listed above, tistics, 74 only 1% of vehicles with more as they are the only ones that serve than three axles travel on partial itineraries localities of major economic interest and on that motorway. The extremely small consequently the only ones that are used by volume of heavy goods traffic on the vehicles with more than three axles. In my itineraries in question does not preclude view, the Commission's criterion is the comparison of those itineraries with a full more correct one. If a comparison is to be itinerary on the motorway since, for the made between journeys on the motorway, purposes of determining whether there is those journeys must be comparable, that is any discrimination, the distribution of to say they must be made by vehicles with heavy goods traffic between a full itinerary on the motorway and the partial itineraries is not so important as the proportion of

37. The Austrian Government objects that the extremely small volume of heavy goods traffic on the partial itineraries on the 38. In the light of these facts and on the Brenner motorway, although not of itself objective premisses I mentioned earlier, I preventing comparison, 75 does neverthe- consider that there is evidence of indirect less preclude the application of the new discrimination against vehicles with more 'differential' tariff system on those itiner- than three axles travelling a full itinerary aries (with different tolls for 'eco-friendly' on the motorway, the great majority of vehicles and for travel by night) because the which are not registered in Austria, com- administrative costs of operating such a pared with similar vehicles travelling on the system would be too high in relation to the partial itineraries described under (a), (b) volumes of traffic. In my view, that objec- and d), the great majority of which are tion is irrelevant. The 'differential' system is registered in Austria. The latter enjoy an part of a complex tariff reform, which was advantage because they pay ATS 20, ATS confined entirely to vehicles with more 10.53 and ATS 15.48 per km respectively, than three axles travelling a full itinerary leaving aside the question of 'ecological' on the motorway and which involved quite requirements and whether the journey is exorbitant increases in the tolls paid by made by day or by night, whereas for a full vehicles of that type, apart from the itinerary on the motorway less noisy vehi- differences in rates introduced in some cles with less pollutant emissions pay ATS cases. The partial itineraries were not 33.33 per km, others pay ATS 43.48 per affected at all by the increases in rates, km, and in the case of travel by night all which could have been applied without vehicles pay ATS 66.7 per km. Over the full changing the administrative system in force

distance, therefore, vehicles with more than Brenner motorway, a comparison can be three axles pay a minimum of ATS 33.33 made between vehicles with more than per km — if they meet the 'ecological' three axles and vehicles with up to three criteria and travel by day — compared axles, in order to establish whether there is with an average of ATS 15.34 per km paid discrimination against the former com- by similar vehicles on the partial itineraries pared with the latter on grounds of the regarded as relevant. In other words, the nationality of the carrier. I note in this cost per km over the full distance is more connection that the only vehicles that than double the cost per km on the partial should be taken into account are vehicles itineraries. It follows that there is indirect as defined in Directive 93/89, not buses, discrimination based on the registration of private motor cars or vehicles with a the vehicles and hence — for reasons maximum permissible gross laden weight already stated — the nationality of the of less than 12 tonnes. carrier, contrary to Article 7(b) of Directive 93/89. Confirmation that that is the case is provided, as the Commission points out, 78 by the resolution of 17 May 1995, in which the Tyrol regional parliament proposed the tariff reform in question and in which it explained the need to protect 'domestic 40. Austria does not agree that vehicles of carriers' ('heimische Frachter') against the different axle-types can be compared. It 'drastic charges' that would result from the claims that vehicles with more than three proposed tariff changes, thus recognising axles do substantial damage to the motor- that the new measures were intended to way infrastructure and that the adverse have a protective and consequently discri- effect they have on the environment is minatory effect. 79 greater than that of vehicles with up to three axles. On the subject of damage to the infrastructure, Austria maintains essentially that vehicles with more than three axles, which can bear greater loads, usually carry much heavier gross laden weights on the Brenner motorway than other vehicles and are consequently responsible for more wear Comparability of vehicles of different axle- and tear on that motorway. On the ques- types tion of the impact on the environment, the Austrian Government points to the adverse effects that the more powerful engines of such vehicles may have on fuel consump- tion and consequently on the volume of 39. The Commission also considers that, pollutant exhaust fumes. with reference to a full itinerary on the

first place, it maintains — and this is not of those used in traffic to or from localities contested by the Austrian Government — in Austria, and none of those used for that 'the wear on the infrastructure caused transit purposes, were registered in Austria. by a specific vehicle depends not only on The Commission naturally cites the first the number of axles but also on other two figures to prove its point that most of factors such as the total weight in relation the vehicles in question are Austrian, 82 to the number of axles, the axle load and whereas Austria relies on the through the suspension system of the driving traffic to show that none of them are. 83 axles'. 80 In the second place, it claims This is a classic case of massaging the there is no evidence that vehicles with more figures. It remains to be determined what than three axles cause greater damage to the available figures on the subject actually the environment than any others, since mean. The abovementioned table gives, for more than 90% of the vehicles in question 1994, an average daily figure of 334 now comply with the 'EURO II' criteria. 81 vehicles with up to three axles, 84 distrib- In my view, those arguments dispel any uted as follows: 189 in internal traffic, 43 doubts as to whether vehicles with up to in traffic to or from localities in Austria and three axles can be compared with vehicles 102 in transit. I consider that internal with more than three axles. traffic ought not to be taken into account, since that type of traffic consists of vehicles which, by definition, do not travel a full itinerary on the Brenner motorway. That leaves the other two types of traffic, which account for an average of 145 vehicles a day (334 - 189 = 145). Of those, only 38 were registered in Austria, while the remaining 107 were registered in other Member States. It follows that, of the vehicles with up to three axles that tra- velled a full itinerary on the Brenner motorway in 1994, probably only 26% were registered in Austria, while the remaining 74% were registered elsewhere. In my view, this shows that there could not 42. Once the question of the comparability be any indirect discrimination on grounds of the two types of vehicle has been of the nationality of the carrier, since the clarified, it remains to be determined benefits of the more favourable tariff whether there is indirect discrimination in system for vehicles with up to three axles the present case. The only available figures were enjoyed predominantly by non-Aus- on the subject are those given in table 6 of trian carriers. I therefore consider that, on the Austrian technical study mentioned earlier, according to which, in 1994 — leaving aside the question of the type of journey — 99.6% of vehicles with up to three axles used in internal traffic, 88.2% 82 — Application, point 17; reply, point 37. 83 — Defence, point 41; rejoinder, point 54. 84 — To be precise, the table in question speaks of vehicles 80 — Application, point 62. 'without trailers' ('ohne Anhänger'), almost all of which 81 — Reply, point 43. have up to three axles.

this point, the Commission's arguments 44. Environmental protection was men- cannot be accepted. tioned by the Austrian Government in its correspondence with the Commission before the action was brought but neither the defence nor the rejoinder contains any express reference to the subject except for a passing reference to the adverse effect on the environment of vehicles with more than three axles 86 and the necessity, particularly at night, of considering the needs of the Possible justifications for the discrimina- people living near the motorway. 87 There is tion found no denying that the Austrian Government is right about the absolute need to protect the environment, in the context of Com- munity transport policy among others. 88 However, in the present case, that Govern- 43. I have shown above how the tariff ment has not explained how the application changes introduced by the Austrian Gov- of discriminatory tolls could have benefi- ernment in 1995 and 1996 may give rise to cial effects on the protection of the coun- indirect discrimination on grounds of the tryside in question. It need merely be borne nationality of the carrier against vehicles in mind that if, for technical reasons with more than three axles travelling a full connected with noise or pollutant exhaust itinerary on the Brenner motorway, the fumes, the intention was to penalise certain great majority of which are not registered types of vehicle deemed to be more dama- in Austria, compared with similar vehicles, ging than others, it is not the case that the the great majority of which are registered in only appropriate instrument is indirect Austria, travelling on certain partial itiner- discrimination against non-Austrian car- aries on the said motorway, which are riers. 89 deemed to be relevant for the purposes of heavy goods traffic. That discrimination, being indirect, may in principle be justified on objective and impartial grounds con- nected inter alia with the requirements of national transport policy and protection of the environment. 85 The Austrian Govern- ment refers expressly to those requirements and it must therefore be determined whe- ther they still apply and what effect they 45. As regards the requirements of national may have on the treatment accorded to carriers in the present case. transport policy, the Austrian Government

draws attention to the volume of through of through traffic crossing Austria, it traffic on the Brenner motorway and in merely creates unequal treatment to the particular to the phenomenon of 'detour detriment of non-Austrian carriers. I there- traffic' ('Umwegtransit'). This expression fore take the view that Article 7(b) of refers to the fact that a significant propor- Directive 93/89 precludes discrimination tion (30%-40%) of the vehicles with more against carriers who, in order to cut costs, than three axles carrying goods between take a route that is longer than others they Germany and northern Europe, on the one might take. The deterrent aim pursued by hand, and Italy, on the other, find it Austria through the new tariff system convenient to take a longer route than the cannot therefore in my opinion be regarded normal one and to travel through Austria as an objective and impartial reason such as along the Brenner motorway rather than to justify indirect discrimination on through Switzerland, where the motorway grounds of the nationality of the carrier. 91 charges are higher, or through the passes and tunnels on the French side. A vehicle travelling from Brussels to Milan would therefore prefer to pass through Austria rather than Switzerland, with its higher charges. 90 I do not deny that the Austrian Government has some reason for complain- ing about the peculiar position of the 'Tyrol corridor' in the narrow pass between two of the larger Member States (Germany and Italy), whose closely intertwined economies Indirect discrimination on grounds of the and trade links give rise to an ever-increas- origin or destination of the vehicle ing volume of goods traffic carried by road. Nor do I deny that there have in the past been serious delays in the development of combined transport arrangements and agreements between the Community and Switzerland on transport. Nevertheless, I consider that the problems to which Aus- tria has drawn attention in the particular 46. The Commission claims that, by the context of the present case cannot be 1995 and 1996 tariff changes, Austria regarded as providing any real justification introduced another form of indirect discri- for a national measure that violates the mination, on grounds of the 'origin' and principle of non-discrimination. The intro- 'destination' of the vehicle, contrary to the duction of a discriminatory tariff system is prohibition contained in Article 7(b) of not an appropriate way of solving those Directive 93/89. That allegation is problems since, without removing the expressed in ambiguous and incomplete structural causes of the excessive volume terms and it is therefore necessary to define

the scope of the provision in question State, including both domestic 93 and inter- which, for reasons I shall explain later, national traffic, with or without transit. 94 should be regarded as quite separate from Moreover, in the sphere of international the provision examined above, which pro- traffic, special Community rules apply in hibits discrimination on grounds of the Austria to purely through traffic: that nationality of the carrier. traffic is subject to a different system 95 from domestic traffic and traffic to or from localities in Austria.

47. In referring to the origin and destina- respect also and, to that end, it is appro- tion of the vehicle, Directive 93/89 prohi- priate to employ the method used earlier to bits any discrimination against hauliers, ascertain whether or not there was indirect irrespective of their nationality, on grounds of the place from which their vehicles have come or to which they are going, in order to avoid preferential treatment being accor- ded to localities, areas or entire Member States affected by particular volumes of 93 — Also called 'cabotage' or, previously, 'internal' traffic. 94 — The second indent of Article 2 of Regulation N o 881/92, traffic or specific economic needs. The cited above, defines in detail the term 'international fundamental reason for that prohibition is carriage', with or without transit through one or more Member States or non-member countries. the need to eliminate all forms of distortion 9 5 — See C o m m i s s i o n R e g u l a t i o n (EC) N o 3 2 9 8 / 9 4 of of competition between transport under- 21 December 1994 laying down detailed measures con- cerning the system of Rights of Transit (Ecopoints) for takings in the Member States. 92 It follows heavy goods vehicles transiting through Austria, estab- lished by Article 11 of Protocol N o 9 to the Act of from the fact that the prohibition in Accession of Norway, Austria, Finland and Sweden question applies without regard to the (OJ 1994 L 3 4 1 , p. 20), as amended by Regulation (EC) N o 1524/96 (OJ 1996 L 190, p. 13). nationality of the carrier that the terms 96 — In fact, the charge is not clearly stated either in the Origin' and 'destination' must be inter- application or in tne reply, where it should also be noted that there is a dangerous confusion between the concepts preted as meaning that they cover every of Origin' and 'destination' and the — irrelevant — concept of the nationality of the carrier.

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50. It follows from the premiss I have just examined that the Austrian tariff system, which imposes higher charges for vehicles 52. With regard to vehicles with up to three 100 — This is the case described by the Austrian Government in axles travelling a full itinerary on the point 57 of the rejoinder. motorway, however, I note that it is appar-

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ent from the figures available for 1994 that Toll rates not related to the costs of the on average 145 vehicles a day of this type infrastructure network constituted through traffic and traffic to or from localities in Austria (the only types of traffic covering the full itinerary). Of these, only 43 constituted traffic to or from localities in Austria, while the remaining 102 constituted through traffic. It follows Preliminary remarks that, of the vehicles with up to three axles that travelled a full itinerary on the Brenner motorway in 1994, between 70.3% (on the assumption that traffic to or from localities in Austria always covers the full itinerary) 54. The Commission's third and last and 100% (on the assumption that such charge, which differs greatly from those traffic never covers the full distance) con- considered so far, is that the Austrian stituted through traffic. The benefits of the Government has failed to comply with more favourable tariff system for vehicles Article 7(h) of Directive 93/89, according with up to three axles are thus enjoyed to which 'toll rates shall be related to the predominantly by vehicles in transit. In costs of constructing, operating and devel- those circumstances, I do not consider that oping the infrastructure network con- there is any indirect discrimination on cerned'. In order to determine whether the grounds of the origin or destination of the charge is justified, it is necessary first to vehicle. clarify the meaning and scope of the provision in question, on which the parties offer conflicting interpretations, and then to ascertain whether or not, in the present case, the tariff changes in 1995 and 1996 were related to the costs of 'the infrastruc- ture network concerned'.

in the absence of any provision to the preted as meaning that the toll rates contrary, constitute an infringement of applicable on a given section of motorway Article 7(a) of Directive 93/89, which pro- must be related to the costs of construction, vides that 'tolls and user charges may not operation and development associated with both be imposed at the same time for the that section. It follows that any increase in use of a single road section'. Moreover, the the level of tolls for the section in question Commission's charge against Austria does will be justified only if and in so far as it is not relate specifically to that particular related to an increase in the costs associated aspect of the tariff system for the Brenner with that section. In the present case, the motorway, since it assumes that the excep- infrastructure network coincides with the tion provided for in the second sentence of Brenner motorway section and the toll the said Article 7(a), to the effect that rates, including those resulting from the 'Member States may also impose tolls on increases following the tariff reform at networks where user charges are made, for issue, must be related to the costs of that the use of bridges, tunnels and mountain section. passes', may apply in this connection. That derogation would apply to the Brenner motorway to the extent to which it can be regarded as a succession of bridges, tunnels and mountain passes. 102 The Commis- sion's interpretation of the saving clause in question — which is not in fact disputed 57. The Austrian Government contends by the Austrian Government 103 — has, as that, on the contrary, the expression 'infra- we shall see, important implications for the structure network' denotes all the motor- link between tolls and costs in the case of way sections operating under a single the Brenner motorway. system of financing 104 and thus, in the present case, the whole Austrian motorway system managed by the finance company ASFINAG which — as we have seen — is responsible for raising the necessary funds on the capital market to construct and develop motorways in Austria. It must be borne in mind that the motorway network run by ASFINAG covers 660 km, that only Interpretation of Article 7(h) of Directive six sections of that network are subject to 93/89 tolls and that the company is in a perma- nent state of debt. 105 In these circum- stances, the Austrian Government consid- ers that it was necessary to increase the toll rates on the Brenner motorway, in full 56. According to the Commission, Arti- compliance with Directive 93/89, in order cle 7(h) of Directive 93/89 is to be inter-

to meet all ASFINAG's financial obliga- fore consider that, within the meaning and tions. for the purposes of that provision, it should be recognised that the toll rates on a particular motorway section characterised, as in the present case, by the presence of certain works, must be related to the costs specifically connected with that section. On those grounds alone, I consider that in the 58. In my view, the tolls imposed by the present case the Court should accept the Austrian Government on the Brenner contention that the relation between the motorway are covered by the specific toll rates and the costs of the infrastructure saving clause contained in the second network should apply only to the Brenner sentence of Article 7(a) of Directive motorway section. 93/89, to the extent to which that motor- way must be regarded as a succession of bridges, tunnels and mountain passes.

company. The Austrian contention that the claims such a view would have for the tolls imposed for the Brenner motorway relation between toll rates and volumes of should be related to the ASFINAG com- traffic. On little-used motorways, the tolls pany's financial obligations in connection would have to be rather high to take with the whole Austrian motorway system account of the costs associated with those is tantamount to transforming a purely motorways. However, on heavily used fortuitous circumstance, namely the fact motorways — such as the Brenner motor- that ASFINAG is financially responsible for way — the tolls could be lower because the the whole Austrian motorway system, into total costs involved would be shared by a a permanent link between the tolls imposed large number of users.

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environmental protection and on transport years 1985-1994 and the estimates for policy. 1995-1997. 108 These tables show quite clearly the pattern of costs incurred in connection with the Brenner motorway and the income from tolls on that motorway. 109 According to Austrian Government esti- mates for 1996, at the time when the tariff changes at issue were adopted, the costs of 60. Those objections are not well founded. constructing, operating and developing the The result described by the Austrian Gov- Brenner motorway amounted to ATS 576.4 ernment is simply attributable to an exces- million, comprising expenditure of ATS sively strict interpretation of Article 7(h) of 25.5 million on construction and develop- Directive 93/89 and the relation between ment and ATS 550.9 million on operation, costs and toll rates laid down in that maintenance and administration. The provision. However, the fact is that the income from tolls in 1996 was expected system of the Directive, inasmuch as it to be in the region of ATS 1 458 million, a allows tolls to be imposed on certain substantial underestimate since it did not sections of motorway, even — as in the take account of the tariff increases intro- present case — in addition to user charges, duced in 1996. 110 also sets an upper limit, in terms that are of necessity not strict, which the toll rates may not in principle exceed, namely the costs of the infrastructure. That fundamental prin- ciple ensures that motorway tariffs are reasonable and moderate. 107 62. A comparison of the 1996 estimates for the costs of constructing, operating and developing the Brenner motorway (ATS 576.4 million) and the expected (and underestimated) income from tolls (ATS 1 458 million) shows that the amount received in tolls exceeded the costs by 153%. It follows that the new toll rates Toll rates not related to costs in the present bear no relation to the costs of the relevant case section of motorway. The fact that Alpen Strassen transfers part of its assets to ASFINAG each year to cover that com- pany's losses confirms, if confirmation were

needed, that Alpen Strassen's annual profits infrastructure network against the charges from tolls exceed the costs it incurs in imposed on the various types of vehicle managing the Brenner motorway. It should using it, so as to ensure that Austrian and be noted that the amount of the transfer in Swiss motorway charges are more or less 1996 was estimated at ATS 1 063.8 mil- equivalent and thus avoid the phenomenon lion. 111That being so, it is clear that the of 'detour traffic' which I mentioned ear- tariff changes at issue are not related to the lier. That special aim clearly makes the costs of the relevant infrastructure net- system unsuitable for the purpose of calcu- work; they do not appear to be necessary lating the costs of the Brenner motorway, a either to cover those costs or to secure the purpose adequately served by the figures, overall financial equilibrium of the com- also produced by Austria, which I quoted pany which has a contract to collect the earlier. Moreover, Austria has never tolls. On that evidence, it is consequently explained why the figures obtained using clear that the Austrian Government has the system of calculation devised in the infringed Article 7(h) of Directive 93/89. context of the negotiations with Switzer- land should be more meaningful than those, considered earlier, which Austria itself forwarded to the Commission during the pre-litigation procedure. 113

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Conclusions

65. In the light of the foregoing considerations, I propose that the Court should settle the dispute between the Commission and Austria as follows:

(1) By adopting on 30 May 1995 and 9 January 1996 two decisions which introduced, with effect from 1 July 1995 and 1 February 1996, certain changes in the system of tolls for vehicles with more than three axles travelling a full itinerary on the Brenner motorway, the Republic of Austria has failed to comply with Article 7(b) and (h) of Council Directive 93/89/EEC of 25 October 1993 on the application by Member States of taxes on certain vehicles used for the carriage of goods by road and tolls and charges for the use of certain infrastructures, inasmuch as it has engaged in indirect discrimination on grounds of the nationality of the carrier and the origin or destination of the vehicle and has failed to relate the toll rates to the costs of the infrastructure network.

(2) The Republic of Austria is ordered to pay the costs.