JUDGMENT OF 6. 7. 1971 — CASE 2/71 GERMANY v COMMISSION

In Case 2/71

THE COURT composed of: R. Lecourt, President, A. M. Donner (Rapporteur) and A. Trabucchi, Presidents of Chambers, R. Monaco, J. Mertens de Wilmars, P. Pescatore and H. Kutscher, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Summary of the facts and procedure

II — Conclusions of the parties

III — Submissions and arguments of the parties

A — Admissibility

B — The substance of the case

Grounds of judgment

Costs

I —. Summary of the facts and procedure

II —. Conclusions of the parties

(1). annul the Commission's decision of rejection of 6 November 1970 together with the statement of accounts for the European Social Fund for the financial year 1969 on which it is founded;

(2). order the Commission to bear the costs.

(1). of its own motion give a ruling on the admissibility of the application;

(2). in any event dismiss the application as unfounded;

(3). order the Federal Republic to bear the costs.

III —. Submissions and arguments of the parties

A —. Admissibility

(1). Under Article 19 of the Financial Regulation the sole factor establishing the credits and debts of the Member States to the European Social Fund is the communication of the statement of accounts. Consequently such credits and debts can in no way be affected by any annulment of the communication of 6 November 1970.

(2). The question of how to take account of the alternatives in parities occurring in 1969 for the purposes of the statement of accounts for the European Social Fund for 1969 was thoroughly discussed by the Commission immediately before it sent the notifications of 2 and 6 March 1970.

(3). It also appears that the letter of 6 November 1970 was merely confirmatory and was solely intended to give a brief summary of the reasons which had induced the Commission to employ two different parities for the statement of accounts for the European Social Fund for the financial year 1969.

B —. The substance of the case

(1). The applicant argues that the decision of 6 November 1970 together with the statement of accounts for the financial year 1969 in the first place infringe Article 125 of the EEC Treaty. Under that provision the Member States are entitled to be compensated for 50 % of the expenses which they have incurred. Since those expenses were incurred in national currency the Community is indebted in this same national currency (cf. also the first paragraph of Article 21 of the Financial Regulation). The conversion into units of accounts described by the second paragraph of Article 21 of the Financial Regulation merely serves to determine the share to the extent of which each Member State's right to reimbursement is reduced but it cannot result in the conversion of a debt ex pressed in national currency to a debt in units of account.

(2). In its statement of defence the defendant asserts that although in principle the Member States are entitled under Article 125 of the Treaty to obtain a reimbursement of 50 % of their actual expenses in national currency, it is on the other hand impossible to apply this principle to cases of alterations in parity. In fact the application of this principle to such a situation would imply a community of risks between the Member States, a view which could only be admitted on the basis of an express provision to this effect. In this connexion the defendant points to provisions such as the third paragraph of Article 207 of the EEC Treaty, Article 7 of the Protocol on the Statute of the European Investment Bank and Article 22 of the Financial Regulation of 1961, which in its view are capable of providing support for its argument.

1. On 11 January 1971 the Government of the Federal Republic of Germany lodged an application under Article 173 of the EEC Treaty for the annulment of the decision of rejection of the Commission of 6 November 1970 together with the statement of accounts for the European Social Fund for the year 1969 on which the decision is based.

2. Under the Financial Regulation relating to the methods and procedure whereby the contributions of Member States specified in Article 200 (1) and (2) of the Treaty and to the technical conditions for conducting the financial affairs of the European Social Fund adopted on 31 January 1961 (JO No 22 1961, p. 509), the Commission, by letters of 2 and 6 March 1970, communicated to the Federal Government the statement of accounts of the European Social Fund for the financial year 1969 and notified the Government of the amount of the sums to be paid to it. By letter of 25 March 1970, the Federal Minister of Finance raised objections to those measures, but the Commission by a letter of 6 November 1970 dismissed the objections and maintained its decisions.

3. Since the defendant considered that the letter of 6 November 1969 merely constituted a refusal to go back on a prior decision establishing the statement of accounts for the financial year 1969 which was notified to the Federal Government by letters of 2 and 6 March, it pleaded that the application was made out of time.

4. The applicant replies that as long as the Commission had not stated its attitude to the objections set out in the letter from the Federal Minister of Finance of 25 March 1970 the statement of accounts and the notifications relating thereto could not be regarded as final. Furthermore the behaviour of the Commission gave the impression that it itself considered its decisions in this matter as provisional.

5. With regard to the nature of the statement of accounts and the notifications thereof, the Financial Regulation of 31 January 1961 provides in Article 17 that: On 31 December of each year the Commission shall determine: (a) the balances of the accounts specified in Article 16 of this regulation, (b) the amounts of the transfers to be made in order to liquidate the credit or debit balances.

6. In addition, the nature of the measures in question prevents them from being considered as provisional. In fact the operations relating to the statement of accounts of the European Social Fund are complex and concern all the Member States in the same way, since the decisions and findings made regarding one Member State automatically affect the balances of the others. One and the same statement of accounts which has been notified to all the Member States thus cannot be regarded as a provisional statement with regard to one of those States.

7. It is clear from the foregoing that the letters of the Commission of 2 and 6 March 1970 constituted final measures which were capable of being contested under Article 173. Since the applicant failed to bring an action within the period of two months, it may not repair this omission by instituting proceedings against a subsequent letter refusing to reconsider the measures in question.

8. Consequently, the application must be dismissed as inadmissible.

9. Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs of the proceedings. In this case the applicant has failed in its application and must therefore be ordered to pay the costs of the proceedings.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 125, 173 and 200; Having regard to the Financial Regulation relating to the methods and procedure whereby the contributions of Member States specified in Article 200 (1) and (2) of the EEC Treaty and to the technical conditions for conducting the financial affairs of the European Social Fund of 31 January 1961 (JO No 22 1961, p. 509), especially Articles 17 and 18; Having regard to the Protocol on the Statute of the Court of Justice of the European Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, THE COURT, hereby:

1 Dismisses the application as inadmissible;

2 Orders the applicant to bear the costs.