C-211/01

OPINION OF MR ALBER — CASE C-211/01

OPINION OF ADVOCATE GENERAL ALBER delivered on 13 March 2003 1

I — Introduction additionally used Article 93 EC as legal basis for the adoption of the disputed decisions.

II — Legal background

1. The present action relates to the choice of the legal basis for Council Decisions 2. The two disputed decisions and the 2001/265 and 2001/266 concerning the agreements appended thereto are broadly conclusion of the Agreements between the speaking identical. European Community and Bulgaria and Hungary establishing certain conditions for the carriage of goods by road and the promotion of combined transport. 2 The Commission sees both agreements as instruments implementing common trans- port policy and had therefore proposed that 3. In their first recital, the decisions state they should be approved on the legal basis that the individual agreements provide an of Article 71 EC. The Council declined to appropriate means for the further develop- accept that proposal. On account of the ment of transport relations between the rules designated 'fiscal provisions' con- Contracting Parties. The second recital tained in Article 8 of the Agreement, it reads as follows: 'Conclusion of the Agree- ment contributes to the smooth functioning of the internal market because it will 1 — Original language: German. promote transit traffic through the Repub- 2 — Council Decision 2001/265/EC of 19 March 2001 concern- ing the conclusion of the Agreement between the European lic of Bulgaria [or Hungary] for internal Community and the Republic of Bulgaria establishing transport between Greece and the other certain conditions for the carriage of goods by road and the promotion of combined transport, OJ 2001 L 108, p. 4. Member States and thus enable intra-Com- Council Decision 2001/266/EC of 19 March 2001 concern- ing the conclusion of the Agreement between the European munity trade to be conducted at the least Community and the Republic of Hungary establishing possible cost to the public at large and to certain conditions for the carriage of goods by road and the promotion of combined transport, OJ 2001 L 108, p. 27. reduce to a minimum the administrative I-8916

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8. Article 3 contains definitions, which are Road vehicles shall not be exempted of no further significance here. Articles 4 from payment of taxes and charges on and 5 deal with combined transport. motor fuel, road tolls and user charges Article 6 contains general provisions relat- levied for the use of infrastructure. 3 ing to road transport. Article 7 lays down rules relating to access to the road transport market.

3. The Contracting Parties shall ensure that tolls and any other form of user 9. Article 8 is headed 'Fiscal Provisions' charges may not be imposed at the and reads as follows: same time for the use of a single road section. However, Contracting Parties may also impose tolls on networks where user charges are levied, for the use of bridges, tunnels and mountain passes. 'In the case of transport operations in accordance with this Agreement:

4. The following items shall be exempt 1. The Contracting Parties shall ensure from customs duty and from all taxes that the principle of non-discrimination and charges: in terms of nationality or place of establishment is applied to road vehicle taxation, fiscal burdens, tolls and any other form of user charges made for the use of road transport infrastructure.

(a) fuel contained in the tanks of road vehicles at the time of importation into the territory of the other Contracting Party, where the tanks 2. Road vehicles registered in one Con- are those designed by the manu- tracting Party shall be exempted from facturer for the type of road vehicle all vehicle taxes and charges levied on in question; the circulation or possession of vehicles as well as from all special taxes or charges levied on transport operations 3 — The second subparagraph of the agreement with Hungary reads as follows: 'Road vehicles shall not be exempted from in the territory of the other Contracting payment of taxes and charges on motor fuel, without prejudice to paragraph 4, and of road tolls and user charges Party. levied for the use of infrastructure'. (Emphasis added).

5. Without prejudice to the second sub- 11. In December 1995, the Council granted paragraph of paragraph 2, if the the Commission authority to negotiate weights, dimensions or axle load of a agreements on the carriage of goods by vehicle exceed the maximum limits in road, combined transport and motor force in the territory of Bulgaria while vehicle transit. The Agreement with Bul- the vehicle conforms to the provisions garia was signed in December 1998 and as laid down in Directive 96/53/EC on that with Hungary in April 1999. Negoti- weights and dimensions, the vehicle ations with Romania were still in progress, shall not be subjected to any special charges provided it keeps to the main 5 — Paragraph 5 in the agreement with Hungary reads as follows: 'Without prejudice to the second subparagraph of paragraph 2, if the weights, dimensions or axle load of a vehicle exceed the maximum limits in force i n the territory 4 — Paragraph 4(b) of the agreement with Hungary reads as of Hungary while the vehicle conforms to the provisions as follows: 'Fuel held in the tanks of trailers and semi-trailers laid down in Council Directive 96/53/EC on weights and used for the cooling systems of refrigerators, where the dimensions, the vehicle shall not he subjected to any special tanks are those designed by the manufacturer for the type of charges provided it keeps to the main transit routes road vehicle in question.' (Emphasis added). concerned in Hungary as specified in Annex 5'.

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at least at the time of the application concerning the signature of the agree- initiating proceedings. ments, 9and amended the provision con- cerning the referral to the Parliament in the second subparagraph of Article 300(3) EC.

6 — Proposal for a Council Decision concerning the signature of the Agreement between the European Community and the Republic of Bulgaria establishing certain conditions for the 15. The Commission supplemented this carriage of goods by road and the promotion of Combined Transport and Proposal for a Council Decision concerning argument during the hearing by referring the conclusion of the Agreement between the European to Article 70 EC, according to which Community and the Republic of Bulgaria establishing certain conditions for the carriage of goods by road and the promotion of Combined Transport COM/99/0666 final Member States pursue the objectives of this of 10 December 1999. The proposal for a Decision Treaty within the framework of a common concerning the signature of the Agreement is published in OJ 2000 C 89 E, p. 35. transport policy. The Commission inter- 7 — Proposal for a Council Decision concerning the signature of prets this provision to mean that the other the Agreement between the European Community and the Republic of Hungary establishing certain conditions for the Treaty objectives are always of contingent carriage of goods by road and the promotion of Combined Transport and Proposal for a Council Decision concerning the conclusion of the Agreement between the European Community and the Republic of Hungary establishing 9 — Cited in footnote 2. certain conditions for the carriage of goods by road and the promotion of Combined Transport COM/99/0665 final 10 — The Commission relies on the judgment in Case 22/70 of 10 December 1995. The proposal for a Decision Commission v Council, 'AETR' [1971] ECR 263, in concerning the signature of the Agreement is published in particular paragraphs 20 to 26, Opinion 1/76 of the Court OJ 2000 C 89 E, p. 52. of 26 April 1977 (Draft Agreement establishing a Euro- pean laying-up fund for inland waterway vessels) [1977] 8 — PRES/00/87 of 17 April 2000 on the 2252nd Council meet- ECR 741 and Opinion 1/94 of the Court of 15 November ing — Transport on 28 March 2000, which may be viewed 1994 (Competence of the Community to conclude inter- at www.europa.eu.int/rapid/start/cgi/guesten.ksh?p_ac- national agreements concerning services and the protection tion.get text=gt&doc=PRES/00/87/0/AGED&lg=EN. of intellectual property) [1994] ECR I-5267.

16. The Commission adduces Directives 9 4 / 5 8 / E C , 1 1 2 0 0 0 / 5 9 / E C , 1 2 and 92/14/EEC 13 as examples of measures under which the legislature has adopted 16 — Article 14 of the Agreement with Slovenia reads as follows: rules in relation to vocational training, 'Taxation, tolls and other charges 1. The Contracting Parties accept that the taxation of road environmental protection and noise pollu- vehicles, tolls and other charges on either side must be non-discriminatory. tion in conjunction with the adoption of 2. The Contracting Parties shall enter into negotiations provisions implementing common trans- with a view to reaching an agreement on road taxation as soon as rules on this matter have been adopted by the port policy. It points out that in all these Community. The purpose of this agreement shall be, in instances the rules were based solely on the particular, to ensure the free flow of trans-frontier traffic, to reduce differences between the road taxation systems legal basis of Article 71 EC. applied by the two Contracting Parties and to eliminate distortions of competition arising from such differences.

17. In the context of international agree- or similar charges levied on the use of parts of the ments, the Commission cites the Agreement respective transport network. 4. Until the conclusion of the agreements mentioned in between the European Economic Commu- paragraph 2 and in Article 13, any change proposed after the entry into force of this Agreement to fiscal charges, nity and the Republic of Slovenia in the tolls or other charges which may be applied to Community field of transport, 14 which was signed on traffic in transit through Slovenia will be subject to a prior consultation procedure in the Joint Committee'. 5 April 1993, and the Agreement between 17 — Article 14 of the Agreement with the former Yugoslav the European Community and the former Republic of Macedonia reads as follows: 'Taxation, tolls and other charges Yugoslav Republic of Macedonia in the 1. The Contracting Parties accept that the taxation of road field of transport, 15 which was signed on vehicles, tolls and other charges on either side must be non-discriminatory.

11 — Council Directive 94/58/EC of 22 November 1994 on the 3. Pending the conclusion of the negotiations mentioned in minimum level of training of seafarers, OJ 1994 L 319, paragraph 2, the Contracting Parties will eliminate dis- p. 28. crimination between hauliers of the Community or the 12 — Directive 2000/59/EC of the European Parliament and of former Yugoslav Republic of Macedonia when levying the Council of 27 November 2000 on port reception taxes and charges on the circulation and/or possession of facilities for ship-generated waste and cargo residues, heavy goods vehicles as well as taxes or charges levied on OJ 2000 L 332, p. 8 1 . transport operations in the territory of the Contracting 13 — C o u n c i l Directive 92/14/EEC of 2 March 1992 on tin- Parties. limitation of the operation of aeroplanes covered by Part 4. Until the conclusion of the agreements mentioned in II, Chapter 2, Volume 1 of Annex 16 to the Convention on paragraph 2 and in Article 13 any change proposed after International Civil Aviation, second edition (1988), the entry into force of this Agreement to fiscal charges, OJ 1992 L 76, p. 2 1 . tolls or other charges which may be applied to Community traffic in transit through the former Yugoslav Republic of 14 — OJ 1993 L 189, p. 161. Macedonia will he subject to a prior consultation pro- 15 — OJ 1997 L 348, p. 170. cedure in the Joint Committee'.

18. As regards Article 8 of the Agreement, bined transport between Greece and the the Commission takes the view that it other Member States. contains only a few, if any, provisions of a fiscal nature. It maintains that the rules relating to customs duties and charges having equivalent effect (paragraph 4) are not in any event fiscal provisions, but rules of the Common Customs Tariff (Article 26 19. According to the Commission this EC). The road use tolls must be viewed as argument is proven by the negotiation consideration for the service of availability guidelines which the Council adopted on of the road infrastructure. As regards the 11 December 1995, from which it is rule relating to road use tolls, the Commis- apparent that the Council was concerned sion refers to the judgments in the cases of with simplification of the carriage of goods Commission v France and Commission v to and from Greece through the conclusion Spain, 18 according to which such tolls do of transit agreements with Bulgaria, Hun- not fall within the scope of Article 93 EC. gary and Romania. At most the other user charges could be of a fiscal nature, since in their case there is no direct link between the amount owed and the service provided. Article 8(5) contains only the obligation not to levy any special charges on those vehicles which meet the requirements of Directive 96/53/EC. 19 The 20. The Commission holds that the rule in Commission believes the fiscal nature of Article 8 serves firstly to avoid discrimi- these special charges to be highly ques- nation on the ground of nationality and tionable and considers them to be more in double taxation. It does not contain any the nature of a fine for damage caused to harmonisation measure. The subject- the roads used. On the basis of this matters addressed are furthermore already analysis, the Commission comes to the harmonised at Community level by Direc- conclusion that Article 8 contains back-up tive 99/62/EC 20 concerning the taxation of measures, which served solely to achieve heavy goods vehicles and Directives the primary objective, namely to simplify 9 2 / 1 2 / E E C , 2 1 9 2 / 8 1 / E E C 2 2 and the carriage of goods by road and com- 92/82/EEC 23 concerning other charges. The result of the rule in Article 8 is simply that Member States must exempt carriers from non-member countries from certain taxes.

23. The Commission is of the opinion that the incorrect reference to Article 93 EC has led to a radical change in the procedure, 22. The Commission regards the legal this being so despite the fact that the bases of Articles 71 and 93 EC as mutually position of the Parliament has not been incompatible. It argues that a decision affected in this case, through the appli- under Article 71 EC requires only qualified cation of Article 300(3) EC. In fact only a majority voting in the Council on con- qualified majority is normally required for clusion of a co-decision procedure, whereas the conclusion of an international agree- Article 93 EC requires unanimity in the ment. Council and only consultation of the Euro- pean Parliament. According to the Court's 'Titanium Dioxide' 25precedent, the two procedures are incompatible. This line of authority has subsequently been regularly 24. The Commission claims that the Court- confirmed by the Court. 26 The problem should: arises both during the co-decision pro- cedure and during the cooperation pro- cedure, to which the Titanium Dioxide judgment relates. The rule in Article 151 EC (Culture), which provides for a unani- — annul Council Decisions 2001/265/EC and 2001/266/EC of 19 March 2001 24 — The Commission quotes Opinion 2/92 of the Court of concerning the conclusion of the agree- 24 March 1995, Competence of the Community or one of its institutions to participate in the Third Revised Decision ment between the European Commu- of the OECD on national treatment, [1995] ECR I-521, paragraph 27, Opinion 1/78 of the Court of 4 October nity and Bulgaria and Hungary on 1979, International Agreement on Natural Rubber, [1979] transport inasmuch as they are based ECR 2871, paragraph 56 and the judgment in Case C-268/94 Portugal v Council [1996] ECR I-6177, para- on Article 93 EC whereas the necessary graph 39. and sufficient legal basis is Article 71 25 — See the judgment in Case C-300/89 Commission v Council [1991] ECR I-2867, paragraphs 17 to 2 1 . The Commission EC; also refers to the judgment in Joined Cases C-164/97 and C-165/97 Parliament v Council [1999] ECR I-1139, paragraph 14. 26 — The Commission cites the judgments in Case C-155/91 Commission v Council [1993] ECR I-939, paragraph 19, in Case C-209/97 Commission v Council [1999] ECR I-8087, paragraph 35, in Case C-36/98 Spain v Council [2001] ECR I-779, paragraph 59, in Case C-268/94 (cited in footnote 24), paragraph 39, in Joined Cases C-164/97 — maintain the effects of those agree- and C-165/97 (cited in footnote 25), paragraph 19 and in Case C-42/97 Parliament v Council [1999] ECR I-869, ments until the Council adopts new paragraph 3 1 . measures;

27 — Cited in footnote 3 of the defence. 27. The Council holds that Article 8 leads 28 — See the judgment in Case C-21/94 Parliament v Council [1995] ECR I-1827. to a harmonisation of the provisions of the 29 — See the judgment in Case C-268/94 (cited in footnote 24).

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obligations concerning the specific matters procedure to which the Titanium Dioxide referred to that those obligations in fact judgment referred has since been exten- constitute objectives distinct from those of sively replaced by the co-decision pro- development cooperation'. 30 The rule in cedure. Indeed any incompatibility between Article 8 of the Agreements with Bulgaria the two procedures has been resolved by and Hungary however has precisely this the fact that according to Article 300(3) EC effect. the Parliament was in any event only required to be consulted. In this respect the Council accords the Commission's argument purely theoretical value. 31

30. The Council holds that the broad interpretation of Article 71 EC upheld by the Commission is incompatible with the 32. The Council is not convinced by the concept of limited powers on which the comparison with the agreements with Treaty is founded. It maintains that the Slovenia and the former Yugoslav Republic right to adopt any 'other appropriate of Macedonia, put forward by the Com- provisions' does not justify overlooking mission. Unlike Article 8, Article 14 of special powers to act such as those of those agreements contains no provisions Article 93 EC, where transport policy which led to harmonisation of the provi- pursues several objectives. sions of Member States. What is more, Article 14 only provides guidelines, which were to be observed by the Contracting Parties in order to guarantee non-discrimi- natory treatment. Moreover those provi- sions refer to agreements to be negotiated in the future.

38. Like the Council and the German Government, it holds the Titanium Dioxide precedent to be outdated in the light of the rules in Article 151 and Article 166 EC. 35. The German Government also points The concurrence of the co-decision pro- out the horizontal nature of fiscal policy cedure and the requirement for unanimity and takes the view, unlike the Commission, in the Council does not cause the dual legal that Article 93 therefore overrides the basis to be unlawful. sector-based rule of Article 71 EC. It deduces this from a comparison with the relationship between Article 93 and Article 95 EC and generalises this result as meaning that it expresses a fundamental appraisal of the EC Treaty, according to which horizontal empowerment rules always take precedence over sector-based legal bases. V — Analysis

36. Like the Council, the German Govern- 39. The Court has consistently held that ment also refers to Article 151 EC and the choice of the legal basis of a legal act is Article 166 EC as examples of bases for to be founded on objective factors which empowerment which combined the co-de- are capable of review by the Court. These cision procedure with unanimity in the factors include in particular the objective Council. It holds that, as a result, a and content of the act in question. If an act combination of Article 71 and Article 93 has several aims and if one of them can be EC as legal basis is not excluded on the identified as fundamental or predominant, basis of the Titanium Dioxide precedent. whilst the others are of secondary import- I - 8926

40. All the parties submitting observations are in agreement on these principles. They all hold that the agreements serve to simplify the carriage of goods by road and combined transport between Greece and 42. According to the first recital of the the other Member States. This transport disputed decisions, their objective is the policy aim is illustrated in particular by the further development of transport relations aforementioned 33 second recital of the between the Contracting Parties. The sec- disputed Decisions 2 0 0 1 / 2 6 5 and ond recital states that the agreements con- 2001/266. It is undisputed that the agree- tribute to the smooth functioning of the ments have a transport policy objective and internal market, because they seek to pro- that they have a transport policy content. mote transit traffic through the Republic of The extent to which Article 8 of the Bulgaria and the Republic of Hungary for agreements have a fiscal content, which internal transport between Greece and the justifies the reference to Article 93 EC as a other Member States. The third recital further legal basis for the disputed finally draws attention to the promotion decisions, is however disputed. of combined transport, with a view to protecting the environment.

43. The disputed decisions, without their 41. I must therefore examine whether the annexes, thus make no reference to a fiscal objective and content of the disputed aim. They only speak of transport policy and environmental policy interests.

32 — See the arguments in Opinion 2/00 of the Court of 6 December 2001 (Cartagena Protocol [2001] ECR I-9713, paragraph 23), the judgment in Case C-491/01 British American Tobacco [2002] ECR I-11453, para- graphs 93 and 94 and the judgment in Case C-281/01 Commission v Council [2002] ECR I-12049, paragraphs 33 to 35. 44. The first recital of the agreements 33 — See point 3 of this Opinion. draws attention to the essential nature of

45. Article 1 of the agreements describes their objective as to promote cooperation between the Contracting Parties on the transport of goods, and, in particular, transit traffic by road, and to ensure for that purpose that transport between and through the territories of the Contracting 49. Article 8 is entitled 'Fiscal provisions', Parties is developed in a coordinated which suggests a fiscal content. Paragraph manner. This provision also makes no 1 contains the principle of non-discrimi- reference to a fiscal policy aim of the nation in terms of nationality or place of agreements. establishment in relation to road vehicle taxation, fiscal burdens, tolls and any other form of user charges. Although this rule relates to taxes, it is not capable of justifying the reference to Article 93 EC. The principle of non-discrimination is covered by Article 90 EC. 46. Following analysis of the objectives of the disputed decisions and of the agree- ments attached thereto, I find there to be no reference to a fiscal policy aim. This argues against reference to Article 93 EC as a legal basis for the disputed decisions.

50. The first subparagraph of paragraph 2 provides for an exemption from vehicle taxes and charges levied on the circulation 47. The content of the disputed decisions is or possession of vehicles as well as from all restricted to the expression of approval for special taxes or charges levied on transport the conclusion of the agreements and tech- operations in the territory of the other nical provisions. It provides no information Contracting Party. Subparagraph 2 con- on the question under examination. tains exceptions from this exemption for I - 8928

52. Paragraph 4 contains further exemp- tions from customs duty and taxes. Cus- toms duties which may be payable on spare 54. Following examination of Article 8 it parts and tools (see (d)) are not taxes for must be held that paragraphs 2 and 4 do the purpose of Article 90 to Article 93 EC, have a certain fiscal content. They include but fall within the scope of the rules tax exemptions. relating to the Customs Union, Article 25 et seq. EC. The provision implies that the spare parts and tools in question are carried on board. It does not therefore concern their import and consequently does not cover a value added tax for these items. 55. In the light of these findings, the comparison with Article 14 of the agree- 34 — See the judgment in Case C-276/97 Commission v France ments with Slovenia and Macedonia which 12000] ECR I-6251, paragraph 36; see also my Opinion of 27 January 2000 on that case [2000] ECR I-62S4, point 47. is put forward by the Commission must be

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56. An exemption from charges, as pre- scribed in Article 8(2) and Article 8(4), may take place in the form of the elimination of the various provisions of the Member States and consequently in the form of harmonisation 35 of the fiscal provisions of Member States in relation to indirect taxes, 59. The Council and the governments sup- to the effect that the prerequisites for a porting it hold that the rule does serve the reference to Article 93 EC may be held to internal market inasmuch as the transport be met. of goods between Greece and the other Member States is promoted. I am in full agreement with their view. This is none the less an argument for reference to the legal basis for transport, Article 71 EC, since as indicated, one is dealing with the internal market for the transport of goods. The argument does not substantiate a reference 57. It must however be noted that to Article 93 EC as the legal basis. Article 93 EC is the legal basis only for harmonisation measures with respect to indirect taxes which are necessary for the creation and functioning of the internal market. That second condition does not appear to be satisfied in this case.

35 — Concerning the definition of harmonisation, see Voß in Grabitz/Hilf, Das Recht der Europäischen Union, volume 60. These reflections on the choice of the I, 19th Supplement, February 2002, before Article 90, paragraph 41. applicable legal basis for the disputed I - 8930

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62. It must further be noted in addition to these arguments in the legislative texts that the fiscal criteria in question were already In order to avoid these aforementioned the subject of Community law harmon- difficulties, these agreements set out a isation measures, as the Commission cor- number of specific provisions regarding rectly states in its reply. Directive the type of charges that can be levied on 1999/62 37 harmonises the taxation of transport operations carried out under certain heavy goods vehicles. Directive these agreements. These provisions contain 92/12 harmonises the taxation of mineral both the relevant principles and rules of oil 38 and Directives 92/81 39 and 92/82 40 Community acquis. This entails in principle had already achieved a certain degree of that only non-discriminatory infrastruc- harmonisation of the tax systems. ture-use related user charges or tolls may be levied, but that transport operations as such may not be subject to special taxes or charges.' 36

Article 8(2) and Article 8(4) of the agree- 61. It is firstly evident from these argu- ments do not alter these rules and also do ments that the rule in Article 8 of the not add any form of harmonisation. They solely guarantee non-discrimination of EC 36 — COM/99/0666 final of 10 December 1999 (cited in footnore 6), under B.2 Infrastructure charges, paragraphs 11 and 12. Sec also the arguments in the proposal in 37 — Cited in footnote 20. relation to the signature of the agreement with Hungary, COM/99/0665 final of 10 December 1999 (cited in 38 — Cited in footnote 21. footnote 7) under B.2 Infrastructure charges, paragraphs 39 — Cited in footnote 22. 11 and 12. 40 — Cited in footnote 23.

64. If one does not accept this interpre- t a t i o n of the disputed decisions and assumes that Article 8(2) and Article 8(4) of the agreements fall within the scope of Article 93 EC, then it must be examined 66. The same applies to the criteria of (a), whether the rules justify the reference to (b) and (c) of Article 8(4). Rules relating to Article 93 EC as the legal basis. This the exemption from tax of the fuel held in presupposes that Article 8 has an indepen- the tanks and for cooling systems, and to dent legislative content, which is not merely lubricants in quantities required for use secondary or indirect in relation to the during the journey, are directly related to transport policy aim. transit. Such provisions are required only

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because the agreements are intended to 69. Nor is it necessary to examine the simplify transit. They too are therefore of argument put forward by the German supportive significance in relation to the Government that Article 93 EC, as a primary transport policy aim of the agree- horizontal basis of authority, funda- ments. mentally predominates over the sector- based basis of authority of Article 71 EC.

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Community institutions with respect to the 75. Moreover the Titanium Dioxide correct legal basis. 41 precedent is not rendered obsolete by the Maastricht and Amsterdam Treaties, as the Council and the governments supporting it contend. The Court only recently con- firmed this precedent. In its judgment in British American Tobacco, the Court found 7 3 . F u r t h e r m o r e , the reference to that incorrect reference to Article 133 did Article 166 EC put forward as a counter- not affect the legality of the proceedings, argument by the Council and the govern- since that provision, similarly to the appli- ments supporting it, as evidence of the cable Article 95 EC, required a qualified compatibility of the co-decision procedure majority in the Council. 42 The validity of prescribed in Article 71 EC with the the essential ruling of the Titanium Dioxide requirement of unanimity in the Council judgment, according to which provisions prescribed in Article 93 EC, is not tenable. which prescribe the co-decision procedure Since the Treaty of Amsterdam came into and provisions which require a unilateral force, Article 166 EC requires only a decision in the Council are incompatible, qualified majority in the Council. was consequently confirmed.

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ation proceedings however makes little Article 300(3) EC would in the present case sense if the members delegated by the lead to any procedural incompatibility Council have no scope for negotiation, or between Article 71 and Article 93 EC being in any event only very limited scope for of purely theoretical significance. It refers negotiation, due to the requirement of to the judgment in Portugal v Council43 in unanimity in the Council. The specific support of this argument. The Commission aim of the conciliation is however to on the other hand takes the view that the reconcile the positions of the European requirement of unanimity in the Council Parliament and the Council and to draw up leads to a radical change in the procedure, a compromise, on which both parties even if the position of the Parliament is not within the Community legislature must affected in the present case by the appli- subsequently agree. In order to avoid cation of Article 300(3) EC. In fact- counteracting this aim of the co-decision normally only a qualified majority is procedure, a combination of the co- necessary for the conclusion of an inter- decision procedure with unanimity in the national treaty. Council must as far as possible be avoided. Only this approach complies with the balance between the Community institu- tions which is established by the Treaty.

84. It must therefore be held that the extent to which the decisions fall within the scope of Article 93 EC is highly questionable in the present case. Even if one were to concede the applicability of Article 93 EC, the fiscal rules in Article 8(2) a n d Article 8(4) must in any event be con- 82. The procedure for adopting the two sidered to be subordinate and secondary to disputed decisions was however influenced the primary transport policy objective of by the reference to Article 93 EC, inasmuch the decisions. As a result Article 71 EC, in as the Council was required to decide addition to the second subparagraph of unanimously and not by a qualified major- Article 300(3) EC, must be considered as ity, as would have sufficed in the case of a the sole legal basis of the decisions. The reference to Article 71 EC. decisions must consequently be annulled in so far as they cite Article 93 EC as the legal basis.

83. According to the case-law, it must be assumed in the event of such changes in relation to the majority necessary in the VI — Restriction of the effects of the Council that the choice of legal basis could judgment also affect the determination of the content of the contested act. 4 6 It must therefore be assumed on the basis of this precedent that the incorrect reference to Article 93 EC was

85. Both parties have requested, in the 44 — See report A5-0278/2000 of the Committee on Regional event that the legal basis of Article 93 EC Policy, Transport and Tourism of 11 October 2000 should be considered unsuitable for the (rapporteur: Konstantinos Hatzidakis), p. 4. 45 —OJ 2000 C 197, p. 171. disputed decisions, that the effects of the 46 — See the judgment in Case 45/86 Commission v Council judgment should be restricted in such a way [1987] ECR 1493, paragraph 12; judgment in Case 131/86 (cited in footnote 41), paragraph 11. that the effects of theagreements should be

90. The intervening parties arc Member States, which are required to bear their own costs in accordance with the first subpara- graph of Article 69(4) of the Rules of 88. The parties do not however dispute Procedure. that the substantive content of the disputed decisions should not be called into question 48 — Concerning the analogous application of this provision to acts other than regulations, see for example tne judgment in Case 92/78 Smmienlbal v Commission [1979] ECR 777 paragraph 106 et seq. with respect to an individual 4 7 — See the judgment in Case C-165/87 Commission v Council decision, and the judgment in Case C-295/90 Parliaiment [1988] ECR 5S45, paragraph 19; ludgmcnt in Case v Council [1992] ECR I-4193, paragraph 27, with respect C-491/01 (cited in footnote 32), paragraph 98. to a directive.

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VIII — Conclusion

91. In the light of the foregoing I propose that the Court should rule as follows:

(1) Council Decisions 2001/265/EC and 2001/266/EC of 19 March 2001 concerning the conclusion of the agreement between the European Commu- nity and Bulgaria and Hungary on transport are declared annulled to the extent that they are based on Article 93 EC;