C-340/98
ECLI:EU:C:2001:164
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OPINION OF MR MISCHO — CASE C-340/98
O P I N I O N OF ADVOCATE GENERAL MISCHO delivered on 15 March 2001 1
1. In his fable, The Miller, his Son and the turers was replaced by that of the Italian Donkey, Jean de la Fontaine puts the Government and the Italian sugarbeet pro- following words into the mouth of the ducers. miller: 'Anyone who says he can please the whole world and his wife is mad indeed'. It seems to me that, in view of the flood of proceedings which have arisen in connec- tion with the fixing of the intervention price for sugar in Italy, these words of exasperation could very well be spoken by the Council of the European Union. 3. The regulations fixing the sugar prices for the year 1998/99 are therefore being contested by Italy before this Court in Case C-340/98 and by the sugarbeet producers before the Court of Instance in Cases T-152/9 8 Azienda agricola Ponte S. Pietro v Council and T-153/98 ANB and Others v Council, and those fixing the sugar prices 2. To take only a recent example, the fixing for the year 1999/2000 are already being for Italy of a derived intervention price for contested by Italy in Case C-352/00. white sugar, owing to a foreseeable deficit in the supply of the Italian market, for the marketing years 1996/97 and 1997/98, caused great discontent among the Italian sugar manufacturers, who were required to pay a higher price to their sugarbeet sup- pliers; that discontent found expression in proceedings which have increased the 4. Of these many actions, it is Case workload of both the Court of Justice and C-340/98, the proceedings brought by the the Court of First Instance. 2When, from Italian Republic against the Council, which the year 1998/99, a derived intervention is supported by the Commission, in respect price was no longer fixed for Italy, the of the fixing of the sugar intervention price discontent caused by the Council's choices for the marketing year 1998/99 which I did not disappear; far from it, because the have to consider now. They take the form discontent of the Italian sugar manufac- of an application for the annulment of Article 1 of Council Regulation (EC) No 1361/98 of 26 June 1998 fixing, for 1 — Original language: French. the 1998/99 marketing year, the derived 2 — Case C-289/97 Eridania [2000] ECR I-5409; Case T-178/96 intervention prices for white sugar, the Eridania and Others v Council (not published in the Reports), Case C-160/98 Eridania, and Case T-258/97 intervention price for raw sugar, the mini- Eridania and Others v Council (not yet published in the Reports). mum prices for A and B beet, and the
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amount of compensation for storage sugarbeet suppliers (Article 5(1) of the costs, 3'in so far as it does not fix the basic regulation). derived intervention price for white sugar for all areas of Italy, thereby rendering applicable in Italy the intervention price for white sugar fixed by Article 1(2) of Regu- lation (EC) No 1360/98, 4 for the non- deficit areas, a regulation which is, in this part, so far as may be necessary, also 7. The intervention price for white sugar contested'. and the minimum price of sugarbeet are not the same throughout the Community. A distinction is made between non-deficit areas and deficit areas. For the deficit areas derived intervention prices for white sugar and higher minimum prices for sugarbeet are fixed (Articles 3(1) and 5(3) of the basic 5. Let me draw attention, very briefly, to regulation). the fact that the common organisation of the sugar markets, in the form resulting, at present, from Council Regulation (EEC) No 1785/81 of 30 June 1981 on the common organisation of the markets in the sugar sector 5 (hereinafter 'the basic regulation'), establishes, amongst other 8. In Regulation No 1361/98, unlike the measures, a guaranteed prices regime. This regulations relating to previous marketing provides for the fixing, before 1 August years, no derived intervention price is fixed each year, for the marketing year beginning for Italy; therefore the intervention price on 1 July of the following year, of an fixed by Regulation No 1360/98 applies. intervention price for white sugar, which the intervention bodies are required to pay for the sugar delivered to them by the producers (Article 3 of the basic regu- lation). 9. The Italian Government puts forward three pleas in support of its application:
6. At the same time the Council fixes a basic price for beet each year (Article 4 of the basic regulation). On the basis of that price, the Council fixes a minimum price — infringement of Article 3(4) and (5) of which the sugar producers have to pay the the basic regulation, in that the inter- vention prices for the marketing year 1998/99 were not fixed until 26 June 3 —OJ 1998 L 185, p. 3. 1998, and breach of the principle of the 4 — Council Regulation of 26 June 1998 fixing, for the 1998/99 protection of legitimate expectations as marketing year, certain sugar prices and the standard a consequence of the late fixing of the quality of beet (OJ 1998 L 185, p. 1). 5 — OJ 1981 L 177, p. 4. prices;
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— infringement of Article 190 of the EC intervention prices for the year 1998/99 Treaty (now Article 253 EC) in that the were not fixed until 26 June 1998. Thus, contested regulations do not contain a the Council infringed the provisions of statement of reasons which satisfies the Article 3(4) and (5) of the regulation since requirements of that article so far as the it should have fixed them by 1 August non-fixing of a derived intervention 1997. price for white sugar in Italy is con- cerned;
— breach of the principle of equal treat- 11. In support of its contention that it was ment in that it was not in application of mandatory for the Council to adhere to the same criteria that the Italian that date, the Italian Government does not Republic was considered to be a non- put forward any argument which has not deficit area whereas other Member already been discounted by the judgment of States were classified as deficit areas. 6 July 2000 in Case C-289/97 Eridania, cited above, and I see no reason for that judgment to be called into question.
I shall examine the pleas one by one and in that order.
12. I should point out that, in that judg- ment, the Court considered the aims of the price regime introduced by the basic regu- lation. It stated that, 'in the interests of the proper functioning of the intervention price The plea that Regulations Nos 1360/98 machinery in the light of those objectives, it and 1361/98 were adopted late is necessary, as rightly pointed out by the Council, that the date on which those prices are fixed should be as close as possible to the date of commencement of the relevant marketing year. Those prices are determined by reference to the ratio Infringement of Article 3(4) and (5) of the between the volume of available produc- basic regulation tion for the forthcoming marketing year and that of foreseeable consumption in the same year. Thus, the nearer the date of price-fixing is to 1 July, the more likely is it that the data on which the assessment of 10. The Italian Government maintains that such volumes is based may be regarded as the intervention price and the derived reliable' (paragraph 30 of the judgment).
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13. The Court concluded that 'the limit- intended to orientate the economic conduct date of 1 August in Article 3(4) and (5) of of operators in the sugar market but Regulation No 1785/81 is not peremptory represent an attempt to anticipate, in their and, therefore, that failure to observe that interests, the probable evolution of produc- date cannot have the effect of rendering tion and consumption with a view to invalid Regulation No 1580/96 as regards stabilising the Community market' the fixing therein of the intervention price (paragraphs 31 and 32). after 1 August.' (paragraph 34 of the judg- ment).
16. As regards price formation, the Court also denied that its judgment of 11 August 1995, 6invoked by the Italian Government, had any relevance. Breach of the principle of protection of legitimate expectations
14. As regards the second change formu- 17. Could it nevertheless be considered, lated by the Italian Government under its regardless of that mistaken premiss, that, as first plea — breach of the principle of the the Italian Government maintains, the protection of legitimate expectations —, I principle of protection of legitimate expec- shall begin by pointing out that, in so far as tations was not observed by reason of the it is based on the premiss that the fixing of fact that, a few days before the start of a the prices before 1 August is designed to new marketing year, and although in the enable the economic operators, that is to past a derived intervention price had say, the sugar manufacturers and beet always been fixed for Italy, the Council growers, to plan their activities with full adopted a regulation which did not pre- knowledge of the facts, it, too, comes into scribe such a price? conflict with the judgment of 6 July 2000 in Eridania.
18. I do not think so, for two reasons, one 15. In that judgment, the Court held that legal, the other factual. From a legal point '... that price-fixing machinery cannot be of view, it is quite clear from the judgment intended to lay down rules enabling oper- of 17 September 1998 7 that when a ators in the sugar sector to plan their common organisation of the markets pro- activities before contracts are concluded between sugar manufacturers and beet 6 — Case C-1/94 Cavarzere Produzioni industriali and Others producers and before the latter sow their [19951 ECR I-2363. land. The prices in question are not 7 — Case C-372/96 Pontillo [1998] ECR I-5091.
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vides for prices to be fixed annually of the Commission's pricing proposals on according to market fluctuations, traders 13 March 1998, that Italy no longer cannot legitimately expect the prices fixed seemed to have the deficit situation it had for the previous year to be retained. experienced in the past. Their represen- tatives sit on several consultative bodies connected with the management of the common organisation of the sugar markets.
19. As pointed out in that judgment, an annual fixing of prices by definition entails the possibility that prices will be altered from one year to the next and, as had already been observed in the judgment of 22. It is true that, when the regulations on 5 October 1994, 8'... whilst the protection prices for the marketing years 1996/97 and of legitimate expectations is one of the 1997/98 were adopted, a deficit situation fundamental principles of the Community, was still expected in the future, but events traders cannot have a legitimate expec- contradicted those forecasts. It sub- tation that an existing situation which is sequently proved to be the case that Italian capable of being altered by the Community sugar production had exceeded demand institutions in the exercise of their discre- during those years. Therefore, the non- tionary power will be maintained; this is fixing of a derived intervention price for the particularly true in an area such as the marketing year 1998/99 became a possibil- common organisation of the markets ity to be taken into account. whose purpose involves constant adjust- ments to meet changes in the economic situation...' (paragraph 57).
23. I therefore consider that the first plea must be rejected in its entirety. 20. From a factual point of view I cannot agree with the Italian Government's asser- tion that the failure to fix a derived inter- vention price for Italy was a completely unexpected event which took all the oper- ators in the sector by surprise. Non-existent or inadequate statement of reasons
21. Quite the contrary, all those operators were fully aware, even before publication 24. The second plea comprises two differ- ent lines of argument. According to the 8 — Joined cases C-133/93, C-300/93 and C-362/93 Crispoltom first, it is unacceptable that Regulations and Others (1994] ECR I-4863. Nos 1360/98 and 1361/98 do not contain, I - 2670
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even if read in conjunction, any indication 27. However, is that statement of reasons a of the reasons for which, contrary to what sufficient basis on which to conclude that had been done for all the previous market- Article 190 of the Treaty has not been ing years, no derived intervention price for infringed? I think that if one refers, once white sugar was fixed for Italy. again, to the judgment of 6 July 2000 in Eridania, one must consider that, although succinct, it is adequate. The judgment points out that:
25. According to the second line of argu- 'the statement of reasons must be appropri- ment, the fact that Italy was not included ate to the nature in question and must show amongst the deficit areas can only be clearly and unequivocally the reasoning of explained by a change in the way of the institution which adopted the contested identifying the Member States for which it measure so as to inform the persons con- is necessary to fix a derived intervention cerned of the justification for the measure price for white sugar, and for that change a adopted and to enable the Court to exercise specific statement of reasons was needed, its powers of review...' (paragraph 38). which was completely lacking.
28. The same judgment goes on to state that '... according to settled case-law, the statement of the reasons on which regu- lations are based is not required to specify 26. Let me begin by saying that, in fact, as the often very numerous and complex the Italian Government maintains, Regu- matters of fact or of law dealt with in the lation No 1360/98 does not state specifi- regulations, provided that the latter fall cally why the intervention price for which within the general scheme of the body of sugar which it fixes must apply to Italy and measures of which they form part...' Regulation No 1361/98 does not state (paragraph 40). specifically why it does not fix a derived intervention price for white sugar for Italy. Must one therefore conclude that there is no statement of reasons for the situation determined for Italy? Certainly not, because it is apparent, from reading the 29. The Court observed, finally, that '... the two regulations in conjunction, that, if a question whether the statement of reasons derived intervention price for white sugar is meets the requirements of Article 190 of not applied to Italy, it is clearly because it is the Treaty must be assessed with regard not not classified as a deficit area, and the basic only to its wording but also to its context regulation provides that such a price must and to all the legal rules governing the be fixed only for deficit areas. matter in question...' (paragraph 41).
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30. The statement of reasons which con- different results is not, in itself, in any way cerns us here is indeed unequivocal, since it extraordinary. It was never considered that leaves no room for doubt as to the fact that, the Italian Republic would be in permanent if no derived intervention price for white deficit and the improvement in its sugar sugar is applied for Italy, it is because that supply situation, far from being abnormal, country was not held to be a deficit area. may be considered, on the contrary, as the Classification as a deficit area did not happy outcome of the policy of promoting necessarily have to be accompanied by an sugarbeet production by fixing, over many account of the complex factors in the light years, a derived intervention price for white of which it had been decided, particularly sugar. The fact that, once the result has since these were fully known to the Italian been achieved, the methods employed for Government, which is present in all the that purpose no longer need to be used bodies of the Council and is represented on seems to me to be in keeping with the very the committees which help the Commission logic of the basic regulation, a logic ren- to manage the common organisation. dering any statement of reasons redundant.
31. Furthermore, we must not lose sight of the fact that classification as a non-deficit 34. I should point out, finally, that it would area is not the result of a choice made by be paradoxical, to say the least, if, while, the Council in the exercise of a discretion according to the judgment of 6 July 2000 in the use of which it would have been under Eridania (paragraph 39), the fixing of a an obligation to explain. It is the objective derived intervention price requires no state- result of applying a method, itself objective, ment of reasons other than a statement that for establishing a foreseeable deficit situ- a deficit is foreseeable, it were then to be ation. considered that the lack of such a statement regarding such a deficit is not sufficient to justify the omission to fix a derived inter- vention price.
32. Did the fact that, for the year 1998/99, the application of that method led, for the first time, to the conclusion that no deficit was foreseeable for Italy, nevertheless require particular explanation? 35. As the abovementioned judgment points out, the application of an inter- vention price and that of a derived inter- vention price do not constitute exceptions to the rule. Each of them is a response to two different economic situations envis- aged by the basic regulation, with the result 33. I do not think so. The fact that the that, since a reading of the regulations same method may, over the years, give leaves no room for the slightest doubt as to
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the situation of any given area, the appli- 40. Did the Council and the Commission cation of the intervention price to that use, for the marketing year 1998/99, a situation does not call for a specific state- method for assessing the supply situation in ment of reasons. the various Member States that differed from the one they used in the previous year?
36. Since there is no alternative but to reject the Italian Government's first line of argument, I must examine the second.
41. In my view, the Italian Government, 37. Let me say, at the outset, that if, as the which, we must remember, is the applicant Italian Government maintains, the Council and therefore bears the burden of proof, had, in fact, amended, from one year to the does not adduce persuasive evidence to next the method used to assess whether, in convince us that they did. If we are to a given Member State, a deficit situation believe the applicant, the method used for was foreseeable for the following market- the marketing year 1998/99 — which con- ing year, the statement of reasons which sists of comparing the available production, emerges from reading the recitals of Regu- made up of the foreseeable production of A lations Nos 1360/98 and 1361/98 would sugar and B sugar, possibly increased by the have to be considered inadequate. amount of C sugar carried forward in accordance with the Community rules, with the foreseeable consumption — had not been used for the previous marketing years.
38. It is one thing to arrive, without chang- ing method, at different findings, on account of fluctuations in production and consumption, as regards the supply situ- ation but quite another to change the instruments of measurement in order to obtain different findings.
42. The Italian Government maintains that, up to the marketing year 1997/98, the foreseeable deficit situation had been 39. To apply a new method without established by taking into account the informing the operators of this is to deprive quantities of unprocessed sugar imported them of the opportunity of an effective into Italy and exported by Italy and also the judicial review to ensure that they have not corresponding balance. In support of its been treated arbitrarily. statements, it refers to the statement of
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reasons contained, until 1980, in the regu- by application of the method to which the lations fixing a derived intervention price Italian Government refers. for white sugar for Italy. 9 That statement of reasons noted:
'... owing to relatively high production costs, sugar production in Italy will prob- 44. Secondly, the Italian Government has ably not be significantly in excess of the failed to point out that the conditions laid basic quantity fixed; it will therefore be down, at that time, by the basic regu- necessary to take into account a deficit of lations, in order to enable a derived inter- more than 200 000 tonnes 10 to be covered vention price for white sugar to be fixed by the Community areas having the largest were not the same as those laid down by surplus.' the current basic regulation. In Regulation (EEC) No 3330/74 of the Council of 19 December 1974 on the common organi- sation of the market in sugar 1 1 we read, for example, in Article 3: and also:
'in those circumstances, the level of market prices in Italy will be determined by the supply prices of sugar from northern ' 1 . An intervention price for white sugar France, the derived intervention price for shall be fixed each year for the Com- Italy may be fixed at... taking into account, munity area having the largest sur- on the one hand, the intervention price plus. 12 applicable in northern France, plus the marketing costs for deliveries to northern Italy and, on the other, the sales costs of the Italian sugar industry.'
2. Derived intervention prices shall be 43. These recitals clearly give no indication fixed for other areas, taking account that the deficit they mention was revealed of the regional variations which, given a normal harvest and free movement of sugar, might be expected to occur in 9 — See, for example, Regulation (EEC) No 432/68 of the the price of sugar under natural con- Council of 9 April 1968 fixing, for the 1968/69 sugar marketing year, the derived intervention prices, the mini- ditions of price formation.' mum prices for sugarbeet, the threshold prices and the guaranteed quantity as well as the contribution to produc- tion (OJ 1968 L 89, p. 4). 10 —According to Italy, during that period the deficit had 11 —OJ 1974 L 359, p. 1. fluctuated between 200 000 and 500 000 tonnes. 12 — Emphasis added.
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45. It therefore seems clear that the fixing was actually applied did, in fact, result in a of a derived intervention price was not, finding of a deficit situation. However, that under that regulation, governed by rules still does not prove that the Commission identical to those currently in force. I and the Council did in fact apply that would merely point out, in this connection, method. that the basic regulation, implemented by the contested regulation, provides in Article 3:
47. Added to that is the — in my view — ' 1 . For white sugar there shall be fixed not insignificant fact that the Italian Gov- each year: ernment, which nevertheless was always closely involved, if only within the sugar management committee, in the preparation of pricing decisions, does not supply us with any document to show that, while agreeing with the finding of a deficit and (a) an intervention price for the non-deficit the fixing of a derived intervention price, it areas; had, if not protested, at least expressed reservations as to the method used. Nor, it will be noted, does it contest the accuracy of the figures to which the method it is criticising were applied, doubtless because it supplied those figures itself to the Com- (b) a derived intervention price for each of mission under Commission Regulation the deficit areas. (EC) No 779/96 of 29 April 1996 laying down detailed rules for the application of Council Regulation (EEC) No 1785/81 as regards communications in the sugar sec- tor. 13 ...'
46. To lend credibility to its case, the Italian Government should have shown us 48. The Commission and the Council, for that, under the current basic regulation, their part, referred to documents, sub- that is to say, since 1981, a derived inter- mitted to the Court in Case C-289/97 and vention price has been regularly fixed for communicated to the Italian Government, Italy by application of a method other than which did not contest their veracity. It is that used for the marketing year 1998/99. It has not done so. Admittedly, it makes every effort to establish that the method it claims 13 — OJ 1996 L 106, p. 9.
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impossible to detect in those documents the annulment it requests by referring to any change in method when the forecasts the situation of other Member States. Let for the marketing year 1998/99 were made. me say, at once, that I disagree with this last statement.
49. In those circumstances, I have to con- sider that the Italian Government's second plea cannot be upheld. 52. If it were established, after examin- ation, that the only explanation for the measures adopted in respect of other Member States is that, for the purposes of forecasting a deficit, a different method was applied to them from the one applied to Italy, the application should be granted. It would then be a matter for the Council, Breach of the principle of equal treatment under Article 176 of the EC Treaty (now Article 233 EC) to consider the most judicious way of removing the discrimi- nation: to apply to Italy the method used for other Member States or to apply to the 50. The Italian Government's third plea other Member States the different method remains to be examined. By this plea it used for Italy. claims that the absence of the Italian Republic from the list of the Member States for which it was necessary to fix a derived intervention price can be explained only by the fact that different criteria were applied depending on the Member State concerned. This discrimination is particularly obvious 53. That said, has the Italian Government in the case of Ireland, in respect of which adduced the necessary proof of discrimi- the Italian Government states that, if it was nation? I do not think so. As the Council considered to be a deficit area, it can only and the Commission point out, the docu- be because the same method was not ments on which it relies have no evidential applied to it as to the Italian Republic. value, since they do not show that, at the time when the Commission drew up its proposals and at the time when the Council made its decision, the application of the method used to find that no deficit was foreseeable for Italy for the coming market- 51. The Council and the Commission do ing year would have led, if it had been not only deny any discrimination, but also rigorously applied to the available data in state that, since it has not sought the respect of other Member States for which a annulment of the fixing of a derived inter- derived intervention price was finally fixed, vention price for other Member States, the to the conclusion that those Member States Italian Government cannot seek to obtain probably did not have a deficit.
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54. Only evidence to that effect would Regulations Nos 1360/98 and 1361/98, allow the conclusion that the principle of owing to the fact that they contain a equal treatment was not observed. It is of minimum of reasoning. However, since no consequence to find that the forecast, the Italian Government was closely for previous marketing years, of a deficit involved in the preparation and adoption for any given Member State has sub- of the decision, it cannot claim that it did sequently proved to be wrong, which, I not have access to the documents which should mention in passing, happened, in would have enabled it to prove the sub- particular, in the case of Italy. What stance of its assertions. matters is that, at the time when the decision is taken by the Council, the fore- cast should be made using a single method applied to equally reliable data.
56. I therefore consider that the Italian Government has not succeeded in sub- 55. I am well aware that adducing evidence stantiating, by supporting evidence, the of discrimination is not easy in respect of assertions on which its third plea is based.
Conclusion
57. Since none of the pleas raised by the Italian Government seems to me to be well founded, I have no alternative but to propose that the Court should give judgment as follows:
— the application is dismissed;
— the Italian Government shall have its own costs and pay those of the Council;
— the Commission shall bear its own costs.
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