Opinion of Mr Advocate-General Roemer

Mr President,

Members of the Court,

The case on which I am giving my opinion today relates to the problems arising from the European Social Fund.

The establishment of this Fund is described in Part 3, Title HI Chapter 2 of the EEC Treaty and the Commission is responsible for its administration. According to Article 123 of the Treaty the Fund has the task of rendering the employment of workers easier and of increasing their geographical and occupational mobility within the Community, in order to improve employment opportunities for workers in the common market. To this end Article 125 of the Treaty provides that on application by a Member State the Fund shall meet 50 % of the expenditure incurred by that State or by a body governed by public law for the purposes of inter alia ensuring productive re-employment of workers by means of vocational retraining and resettlement allowances. According to Article 200 of the Treaty the sums necessary for the attainment of the prescribed objectives shall be covered by the financial contributions of Member States determined on a specific scale. The detailed rules relating to the operation of the Fund and to its other special aspects are laid down by regulations adopted by the Council in accordance with Article 127 of the Treaty. Thus Regulation No 9 (OJ No 56, p. 1189) of the Council of 25 August 1960 on the European Social Fund (in the version contained in Regulations Nos 47/63 (OJ No 86, p. 1605) and 37/67 (OJ No 33, p. 525)) provides the necessary definitions and indicates the conditions for the grant of assistance the amount of which shall be calculated by the Commission in accordance with the rules laid down by Regulation No 113/63 (OJ No 153, p. 2563). With regard to the rules and the procedure of the financial operations and for making available the contributions of the Member States intended to cover the expenditure of the Fund, Article 26 of Regulation No 9 refers to the Financial Regulation adopted under Article 207 of the Treaty and which entered into force on 1 April 1961. In this Financial Regulation on the methods and procedure for making available to the Commission the Member States contributions, referred to in Article 200 (1) and (2) of the Treaty establishing the European Economic Community, and in the technical conditions under which the financial operations relating to the European Social Fund shall be carried out' for the purposes of this case we are concerned with Chapter 3, namely that which relates to the contributions referred to in Article 200 (2) of the Treaty and which relates to the European Social Fund. Article 16 of the Regulation provides that at the end of each quarter the Commission shall determine with regard to each Member State the amount to be reimbursed of the 50 % of the expenditure during the foregoing quarter approved by the Commission pursuant to the provisions of the regulations relating to the European Social Fund. Article 16 continues: these amounts shall be placed at the credit of each Member State in the accounts kept by the Commission in the name of the former. Furthermore, according to Article 16, the Commission shall fix the aggregate amount of the contributions made available to the European Social Fund for the quarter in question and the Commission shall divide this amount amongst the Member States in accordance with the scale laid down in Article 200 (2) of the Treaty. The account of each Member State which shall be kept by the Commission shall be debited with the amount of its share so calculated. At the end of each quarter the Commission notifies the Member States of the sums with which their accounts have been debited and credited pursuant to the provisions of Article 16 (a) and (c) of the Financial Regulation and from the second quarter it shall also notify the Member States of the overall accounting position for the foregoing part of the year. On 31 December of each year the Commission, pursuant to Article 17 of the Financial Regulation closes off the balance of the accounts referred to in Article 16 of the regulation and it notifies the Member States with a credit balance (in the present case we are only concerned with this) not later than the following 31 January, of the amount to be paid to them (Article 18 of the Financial Regulation). Within a period of two months from such notification (Article 19 of the Financial Regulation) the Commission shall pay the amount referred to in Article 18 (b) of the regulation by depositing a corresponding sum to the debit of the account opened in the name of the Commission in favour of the European Social Fund with the Treasury or other institution approved by the Member State. Article 21 of the Financial Regulation also plays an important part in the present case. It provides that the amounts to be repaid by the European Social Fund to the Member State shall be determined in the national currency of the latter on the basis of the sums which they have actually expended. In determining the contributions and the balances of the Member States the amounts of the reimbursements determined shall be converted into units of account in accordance with the provisions of Article 2 of this regulation (that is to say on the basis of the relationship between the weight in fine gold of the unit of account referred to above and the weight in fine gold corresponding to the par value of each of those currencies as it has been declared to the International Monetary Fund). The payments intended to reconcile the balances of the accounts expressed in units of account shall also be effected in the national currency of each Member State … Finally, I wish to cite once more Article 23 of the Financial Regulation in accordance with which the Member States shall receive from the Commission a payment expressed in their national currency on the basis of the parity prevailing on the day of the closure of the accounts laid down in Article 17 of the regulation.

At the request of the Federal Republic of Germany the Commission adopted in the second half of 1969 a number of decisions granting financial assistance (no decision had been adopted in the course of the first half of this year). In accordance with Article 16 of the Financial Regulation the Federal Republic of Germany received at the end of each quarter a notification of the state of its account. This was done by letters of the Commission of 10 October 1969 and of 2 March 1970. In the second letter the Commission also notified the Federal Republic of Germany of the state of its account at 31 December 1969 and at the same time notified it of the overall accounting situation of the activities of the European Social Fund for the year 1969. With regard to the statement of accounts, the communication from the Commission indicated both in German marks and in units of account the credit balance (for the aid) and the debit balance (for the contributions) for the third and fourth quarters respectively together with the credit balance for the year as a whole given in units of account. The application of the monetary parities is of particular interest in this context since the German mark was revalued on 27 October 1969. In this way the account for the fourth quarter was calculated in accordance with the parity (for the aids decided after 27 October) whilst the account for the third quarter was calculated in accordance with the former parity. This is clear from the footnotes to the accounting documents in question. The Commission adopted a similar course in its letter of 6 March 1970 to the Federal Minister of Finance in which it notified the statement of the accounts of the Federal Republic of Germany as at 31 December 1969. This communication indicates in units of account the aggregate amount of the reimbursement to be made in favour of the Federal Republic together with its financial contribution and states that the credit balance, also given in units of account, will be paid to it to the extent of a specified amount expressed in German marks (this sum was converted in accordance with the parity applicable on 31 December 1969).

The Government of the Federal Republic of Germany was however unable to agree on the method of calculating which I have just described. According to it, the Commission was wrong in basing its calculation on the different parities of the German mark; it ought to have applied the parity in force at the date of closing off the accounts (namely, 31 December 1969) for the entire reference period. The Federal Government communicated its complaints to the Commission in a letter of 25 March 1970 wherein it requested that the statement of accounts should be corrected in accordance with the detailed amounts indicated in this letter. Initially the Commission did not react to this communication. After two reminders from the Federal Government dated respectively 4 August 1970 and of 18 December 1970, on 24 September 1970 the Commission authorized the Bundeshauptkasse to pay out of its account an amount corresponding to the credit balance the amount of which it had already notified to the Federal Republic. It notified the Federal Republic of this in a letter of 19 October 1970 declaring that this was done without prejudice to measures to be taken in pursuance of the letter from the Federal Minister of Finance of 25 March 1970. Finally, by a letter of 6 November 1970 which reached the Federal Ministry of Finances on 9 November 1970 the Commission expressly rejected the complaints made by the Federal Government on 25 March 1970. In this letter it maintained that under the Financial Regulation the parities applicable were those in force at the date of drawing up the accounts in accordance with the procedure of Article 16 (thus those applicable at the end of each quarter); it further maintained that the data in the account notified quarterly to the Member States were final and, lastly, that the statement of accounts drawn up at the end of each year merely constituted an operation of addition. It declared that in consequence it was impossible to carry out the amendment re-quested by the Federal Government and it considered as final the closure of the balances of the European Social Fund for the financial vear 1969.

As a result of this decision the German Government brought an action on 14 January 1971 before the Court of Justice. In this it repeats the argument which it expounded to the Commission in March 1970 and asks the Court as a consequence to annul the Commission's decision of rejection of 6 November 1970 together with the statement of the accounts for the European Social Fund for the financial year 1969 on which it is founded.

Legal consideration

(1). The objections formulated by the Commission with regard to the admissibility of the application of the Federal Government requires me to consider first of all this problem which occupies a relatively important position in the parries' arguments.

(2). As in other cases I shall not stop short at this conclusion. I must, in the alternative at least, consider the sub-stance of the case (that is the question whether the applicant's complaints appear justified or whether the method of calculation selected by the Commission is compatible with the Treaty and with secondary Community law).

3. My conclusions are thus as follows:

1 Translated from the French vemina.