Opinion of mr advocate-general Gand

Mr President,

Members of the Court,

The application by the Government of the Kingdom of the Netherlands on which you have to give judgment concerns Decision No 14/66 of the High Authority of 20 July 1966 which, subject to certain conditions, authorizes the Deutsche Bundesbahn to apply special rates and conditions to the carriage of coal and steel to or from certain stations in the Saarland. It will give you the opportunity to state your position on the interpretation of the fourth paragraph of Article 70 of the Treaty of Paris concerning special internal rates and conditions, with which you have already dealt in 1960 in relation to the decisions of the High Authority taken within the context of paragraph 10 of the Convention on the Transitional Provisions.

Let me recall the terms and the content of the contested decision.

The rates and conditions in dispute, as indicated first of all in the recitals of the preamble to this decision, were introduced by the Deutsche Bundesbahn between 1 June 1964 and 15 July 1966 without the prior agreement of the High Authority and without its having verified that they were in accordance with the Treaty, although its obligation to do so, even a posteriori, is in no way affected thereby. You are aware of the reasons for this situation: the Government of the Federal Republic considered these rates and conditions to be justified by the potential competition of a Saar-Palatinate canal, the cutting of which was referred to in a letter from the Federal Ministry for Economic Affairs of 30 May 1964 as planned; the High Authority never accepted this point of view and always based its actions solely on the fourth paragraph of Article 70 of the Treaty. The High Authority considers in this instance that the special rates and conditions are in accordance with the principles of the Treaty, in particular with the provisions of the second paragraph of Article 2 which oblige the Community to safeguard continuity of employment and to take care not to provoke fundamental and persistent disturbances in the economies of Member States. In this connexion, the change which took place in the conditions of competition to the detriment of the undertakings of the Saarland, as regards both disposal of goods and supply, is the result of measures taken by the public authorities concerning the transport infrastructure, that is, of the canalization of the Main, the Neckar and the Moselle. This development is made even more serious by reason of the particular industrial structure of the Saarland, in which the production of coal and steel plays a leading role. Finally, if these reasons justify the conformity of the special rates and conditions introduced by the Bundesbahn with the principles of the Treaty, they apply to all the coal- and steel-producing undertakings established in the Saarland and, therefore, render unnecessary an examination of the operating conditions of each such undertaking considered individually.

However — and this is the other aspect of the question — the limitation of the scope of certain of these special rates and conditions is likely to affect the functioning of the Common Market to the detriment of certain undertakings established outside the Saarland, whose situation is comparable. Therefore, these rates and conditions are only capable of being authorized if they are extended to those undertakings. The contested decision takes this into account and in Article 1 thereof authorizes eleven special rates and conditions to the extent to which they apply to ECSC products. Article 2 orders the extension of certain of these rates and conditions within a given time-limit to certain consignments to or from Lorraine, the Grand Duchy of Luxembourg, Belgium or the Netherlands. Finally, although the duration of the authorizations is not specified, Article 4 indicates that they will be modified or withdrawn if the circumstances on which they are based are themselves changed or no longer exist.

It is this decision in its entirety which is criticized by the Government of the Netherlands, on the grounds of infringement of the Treaty, infringement of an essential procedural requirement and misuse of powers. In fact, as we shall see, the three submissions overlap to a large extent, in that they all concern the interpretation and application of Article 70 of the Treaty and in particular the fourth paragraph thereof, together with Articles 2 to 5.

I

1. It is first necessary to look at this provision in the context of the Treaty:

2. The applicant Government criticizes the contested decision on the ground that it infringes the fourth paragraph of Article 70 of the Treaty and its arguments are almost entirely based upon your case-law of 1960, in particular upon one of your judgments given at that time, as you were then dealing with various applications. In Joined Cases 3 to 18, 25 and 26/58 (Barbara Erzbergbau AG and others, judgment of 10 May 1960, Rec. 1960, p. 365), you acknowledged the legality of the agreement given to special rates and conditions in favour of certain German undertakings situated close to the interzonal frontier on the ground of the disadvantages created by factors of a non-economic nature and in particular by political contingencies which have separated these undertakings from their natural market, with the result that they require support either to be able to adjust themselves to the new conditions or to be able to overcome this accidental disadvantage. However, by a judgment given on the same day (Joined Cases 27, 28 and 29/58, Compagnie des hauts fourneaux de Givors and Others, Rec. 1960, p. 501), you dismissed a claim by certain undertakings established in the South of France to retain the support tariffs from which they benefited before the entry into force of the Treaty.

3. I shall now turn to a further series of criticisms against the reasons given by the High Authority in support of its decision, which the applicant contends cannot lawfully be employed to justify it, as well as against certain aspects of that decision.

II

With regard to the second submission concerning the infringement of an essential procedural requirement I shall be very brief, since, as it admits, the Netherlands Government is merely setting out in a different form the complaints which it has already formulated in respect of the submission based on infringement of the Treaty. If you accept, as I have done, the substantial legality of the contested decision, you are logically led to set aside the complaint of infringement of a procedural requirement.

III

There remains the misuse of powers for which the High Authority is criticized on the grounds of certain attitudes which are described in a rather vague manner: it became involved in the requirements of the regional policy of a Member State and it was tending to conduct a regional policy in favour of all the coal and steel undertakings of the Saarland, as is shown by the generic nature of the authorization granted.

This complaint is wholly founded upon your judgment in the Givors case. The applicants therein maintained that the agreement referred to in the fourth paragraph of Article 70 could be given while taking into account the requirements of a regional policy and they referred to the principles set out in Article 80(2) of the EEC Treaty, according to which the Commission's examinations of the rates and conditions of transport must be made in particular in the light of the requirements of an appropriate regional economic policy. You replied that as the integration referred to by the ECSC Treaty was only partial, the High Authority was not in a position to assess all the factors which conditioned a regional policy and was not authorized to shape its action to the requirements of such a policy.

In what way should this last, rather ambiguous, statement be interpreted? Must it merely be understood to mean that the High Authority cannot conduct its own regional policy? That is obvious. Or is it that it must not align itself with the policy of a Member State, by carrying out that policy? This is quite normal as each of the two powers must act within its own sphere in accordance with its own responsibilities.

This, however, implies that the High Authority is competent to assess and to authorize, where necessary, the rates and conditions provided for in the fourth paragraph of Article 70, on condition that it bases this assessment on the principles of the Treaty and that the measures are in accordance with such principles even if a Member State is forced into this area by regional policy preoccupations. It must merely disregard the reasons put forward to support these measures and their designation in a national context. In my opinion, it does not follow either from its decision or from the preamble thereto that the High Authority sought to justify its decision by the requirements of a regional policy, even less that it took the initiative for such a policy and actually implemented it. I consider therefore that this complaint must be rejected. Finally, let me say that I consider mistaken the applicant's argument to the effect that the fourth paragraph of Article 70 prevents its application by the High Authority if other means of action are offered by the Treaty. This article is precisely the provision applicable in transport matters.

In suggesting to you that you dismiss the application by the Netherlands Government, I do not consider myself to be in conflict either with the Treaty or with your judgments given in 1960. Case-law must be looked at in its context: at that time you were dealing with rates and conditions which came into force before the Treaty and which were incompatible with the Common Market. It was, therefore, necessary to set the situation in order so as to enable the Common Market to be established. Today you are dealing with undertakings which operated normally under the Treaty until they encountered difficulties which, it is to be hoped, are not insurmountable. It might be said, however, that there is a certain change of emphasis in my analysis but the Treaties are living documents which may not be applied entirely without regard to the passage of time or the evolution of economic phonomena. Is it not true to say that, in a related field, your judgment in the case of Comptoirs de Vente des Charbons de la Ruhr marked a certain modification in the concept of competition in relation to your earlier judgments? And would it be inconceivable that the same should apply to transport matters? It is because I believe this evolution to be possible and advisable that I am of the opinion that:

1 Translated from the French.