OPINION OF MR MAYRAS — CASE 92/77 JUDGMENT OF 23. 2. 1978 — CASE 92/77

Mr President

Members of the Court,

This case has certain similarities to the reference for a preliminary ruling in which the Court delivered judgment on 3 March 1977 (Kerry Milk [1977] ECR 425). It concerns the issues affecting the application of the law in point of time which are raised by changes in the amount of a Community aid resulting both from an alteration in the intervention price expressed in units of account and from the alteration of the rate to be applied for the conversion of those units into a national currency. The case calls in question the validity of a regulation of the Commission which is closely involved with the interpretation of a regulation of the Council and I am sorry that the Council did not see fit to make known its point of view.

Furthermore, as I said in my opinion in the Lührs case, without going into the material facts of the case it is difficult, on the occasion of a review of interpretation or validity carried out within the framework of Article 177, to rule on the legitimate expectation which the plaintiff might have as an individual in the maintenance of a given legal situation, arising in the present case from contracts made with an official intervention agency. Nevertheless I shall attempt to provide the national court with some guidelines to help it in deciding the case before it.

I —. (1) It is first of all necessary to recall the circumstances in which Regulation (EEC) No 2517/74 of the Commission of 3 October 1974 appeared. The marketing year for dairy products begins on 1 April each year and ends on 31 March in the following year. Generally speaking the decisions concerning the common prices and the differential prices and amounts for the new Member States in each marketing year are taken in March. This was the case in March 1974 (Regulation (EEC) No 663/74 of the Council of 28 March 1974); the differential intervention price for butter in Ireland was fixed at 163.40 units of account per 100 kg, that is to say — at the green rate applicable as from 1 February 1973 — £75.49 Irish per 100 kg (Regulation (EEC) No 222/73 of the Council of 31 January 1973). In Regulation (EEC) No 2496/74 of 2 October 1974 the Council, exceptionally and by way of derogation from the principle of the annual fixing of prices, prescribed a further general increase in agricultural prices for the 1974/75 marketing year or for the remainder of that year; the differential intervention price applicable to butter in the case of Ireland with effect from 7 October 1974 was fixed at 170.43 units of account per 100 kg, representing an increase of 4.3 % on the previous price. In reality on account of the representative exchange rate to be applied in agriculture to the Irish pound, the increase was very much greater in actual national currency because Regulation (EEC) No 2498/74 of the Council, at the same date, laid down that the rate of exchange to be applied for the conversion of the prices and other amounts referred to in enactments concerning the Common Agricultural Policy would, again with effect from 7 October 1974, be £ 1 per 1.9485 units of account whereas it had previously been £ 1 per 2.1644 units of account. The result, in terms of national currency, was an increase of 15.9 % in the intervention price for butter in Ireland, which rose from £ 75.49 to £ 87.47 per 100 kg (or 4.3 % representing the increase in the intervention price in units of account and 11.6 % representing the devaluation of the green pound). On 3 October 1974, the day after adoption of the two above-mentioned regulations, the Commission adopted Regulation (EEC) No 2517/74 on the adjustment of private storage aid for butter to take account of the changes in the buying-in price; it entered into force on 1 October 1974. The first comment which I must make is that these enactments form a whole and cannot be interpreted separately. The Commission was aware of what the Council had decided because it was the Commission which had submitted the drafts which became Regulations (EEC) Nos 2496/74 and 2498/74, and the Council knew of Regulation (EEC) No 2517/74 of the Commission because its own regulations did not enter into force until 7 October. (2) Before describing the effect of these alterations on the private storage system for butter I must again briefly refer to the objectives and detailed rules of this system at the material time. Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products which, although amended on many occasions is still in force, provides for an intervention system tor those products. In addition to intervention by the official agencies (in Ireland, the Department of Agriculture) which (under conditions laid down pursuant to Article 6 (6)) buys in at the intervention price Community-produced butter offered to them (public storage), Article 6 also provides that aids shall be granted for the storage in private cold storage depots (private storage) of Community-produced butter and cream, again under conditions laid down pursuant to paragraph (6), which reads: General rules governing the intervention measures provided for in this article and in particular the conditions under which such measures may be applied shall be determined by the Council in accordance with the same procedure (that is to say, on a proposal from the Commission and in accordance with the voting procedure laid down in Article 43 (2) of the Treaty). But paragraph (7) prescribes concurrent powers for the Commission, by providing as follows: Detailed rules for the application of this article, and in particular the amount of aid for private storage, shall be adopted in accordance with the procedure laid down in Article 30, that is to say in accordance with the procedure of the Milk and Milk Products Management Committee. This rather vague wording was such as to give rise to different interpretations and it is in pan the cause of the main action. The general rules governing the intervention measures on the market in butter and cream, referred to in paragraph (6) were laid down by Regulation (EEC) No 985/68 of the Council of 15 July 1968. Article 9 of that regulation prescribes the basic provisions for storage contracts concluded between holders of butter and private concerns. Article 10 contains general rules for calculating the amount of the aids granted for private storage of butter and cream. The second subparagraph of Anide 10 (1) provides that In cases where, at the time of removal from store, the market has developed unfavourably under conditions which could not be foreseen, the amount of aid may be increased, that is to say, taking this provision in conjunction with Article 6 (7) of Regulation (EEC) No 804/68, the Commission, with the assistance of the Management Committee, is empowered to effect this increase. According to the recitals in the preamble to Regulation (EEC) No 804/68, intervention measures [including those for butter and fresh cream] must be such that the proceeds of aggregate milk sales tend to correspond to the common target price for milk delivered to dairy and, according to Regulation (EEC) No 985/68 of the Council, intervention arrangements must take account of the development of the market situation … provisions should be made for … a uniform method of calculating the amount of aid according to the cost of storage and market developments ... private storage must contribute to the attainment of a balanced market. When the aid is split up into its component parts as set out in the regulations of the Commission, it is clear that, apart from the factors intended to compensate for the loss of quality of the product resulting from its being in store, all the other factors relate to that of the buying-in price applied by the intervention agency on the date when the contract is concluded. The detailed rules for the application of the interventions on the market in butter and cream provided for in Article 6 (7) of Regulation (EEC) No 804/68 were adopted in Regulation (EEC) No 685/69 of the Commission of 14 April 1969 which has itself also been repeatedly amended. Where a storage contraa is sought, the butter or cream involved must have been produced during the 14 days preceding the date on which such butter or cream is taken into storage (Article 23). The storage contraa shall not be concluded before the butter is stored (Article 2 of Regulation (EEC) No 603/70 of the Commission of 31 March 1970). Such aid for the private storage of butter (and of cream) may be paid in the form of payment on account (Article 24 (2)). Under Article 26, aid for private storage may be granted only if the duration of storage is at least four months. Under Article 28 the storage period shall begin on 1 April and end on 15 September of the same year. The period for removal from storage shall begin on 16 September and end on 31 March of the following year. These dates applied at the time when the events which gave rise to the main action took place but in the course of time they have frequently been changed. As amended by Article 2 of Regulation (EEC) No 1064/69 of the Commission of 10 June 1969 and by Article 2 of Regulation (EEC) No 603/70 of the Commission of 31 March 1970, Article 29 of Regulation (EEC) No 685/69 provides as follows: Should the buying-in price for butter change, the aid specified in Article 24 [that is to say, the aid for private storage provided for under Article 6 (2) of Regulation (EEC) No 804/68] in respect of quantities of butter and of cream expressed as butter equivalent covered by a storage contract and taken into store before the date on which the change in the buying-in price became effective and remaining in storage when the price changes shall be: (a) increased by an amount equal to the decrease in the buying-in price, or (b) decreased by an amount equal to that of the increase in the buying-in price. In consequence, the Commission is empowered not only to increase but also to reduce the amount of aid. (3) Regard was paid to these general rules in a series of contracts concluded between the plaintiff in the main action, a company comprising farmers' cooperatives whose business is to market milk and milk products, and the Irish Minister for Agriculture. The contracts covered a very large tonnage of butter and cream; these products had been placed in store between 1 June and 14 September 1974 and the removal from store, which can begin on 16 September, actually took place before 6 February 1975. Under paragraph 10 of these contracts, the amounts of aid were fixed on the basis of a parity of 2.1644 units of account per Irish pound; they were subject to adjustment in the event of any variation in the exchange rate of the unit of account (this green rate was 100 units of account per £ 46.2023 from 1 February 1973). Paragraph 12 of the contracts reproduced the wording of Article 29 of Regulation (EEC) No 685/69 of the Commission. Under paragraph 13, the amount of aid. must not be paid until the quantities in respect of which the aid was provided have left the store. Despite this, it was possible to make a payment on account for the periods of storage actually completed. Since aid may be granted only if the duration of storage is at least four months and the plaintiff in the main action sought to withdraw his goods after 1 October 1974, the tonnages in question were still in store on 7 October 1974, the date of entry into force of the new buying-in intervention price. (4) The measure of which the plaintiff in the main action complains is the decision of the Irish Minister for Agriculture that no aid was due under Reguladon (EEC) No 2517/74 of the Commission for stocks of butter and cream kept in store between 10 June 1974 and 5 February 1975. While, until then, under Article 29 of Regulation (EEC) No 685/69 the only situation envisaged was that of a change in the amount of aid due to the effect of an alteration during the marketing year of the intervention price expressed in units of account, the Commission's regulation, which was based on Article 6 (7) of Regulation (EEC) No 804/68, laid down the principle of an adjustment of the amount of aid granted for private storage abo in the event of this amount being changed as the result of an alteration in the representative rate for converting the intervention price into national currency (or in the exchange rate referred to in Article 2 of Regulation No 129 of the Council). In circumstances where the combination of these two changes (rise in the differential intervention price in units of account and an additional rise in price as the result of the new representative rate) produces an increase in the intervention price which is greater than the amount of aid, no aid is to be granted. The plaintiff in the main action does not dispute that the amount of aid should be reduced in accordance with the provisions of Article 29 of Regulation (EEC) No 685/69 on account of the increase in the intervention price expressed in units of account but it refuses to accept that account should be taken of the additional increase in the intervention price as the result of its conversion into national currency at the new rate for the green pound or that the amount of aid which it legitimately expected to receive when storage began should be thus skimmed off. It accordingly claims the payment of £ 457475.87 Irish (at the level in force with effect from 7 October 1974); we have no precise breakdown of this figure.

II —. In my opinion, Regulation (EEC) No 2517/74 of the Commission must undoubtedly be interpreted as the Irish Minister for Agriculture has interpreted it, that is to say, as meaning a new adjustment of aid, otherwise its wording would be meaningless and add nothing to the previous wording of Article 29.

(1). The statement of reasons for Regulation (EEC) No 2517/74 of the Commission must be appraised in the light of all the regulations of which this enactment is one; I have already recalled that the preambles to Regulations (EEC) Nos 804/68 and 985/68 of the Council make clear both the object of the intervention operations and the specific purpose of private storage aid. When viewed in the context of the system of which it forms part, the adjustment of aid is clearly seen to be in furtherance of the aim pursued by the Council's regulations. Considered in the light of the considerations governing a change in the aid during the marketing year, the Commission regulation sets out adequate if concise grounds for the adjustment of aid compared with the other reference factor, represented by the increase in the buying-in price expressed in national currency; I shall deal with the correctness of this statement of reasons when I come to the question of infringement of the Treaty.

(2). The plaintiff in the main action contends that if the Council wished a change in the green conversion rate to have the same effect as a change in the buying-in price for butter, the normal procedure would have been for it to lay down general provisions for the future. Such an interpretation of Article 29 of Regulation (EEC) No 685/69 would have required a special regulation of the Council because Article 29 covers only the case of a change in the common price expressed in units of account. In September 1973, in the converse situation of the raising of the central rate of a national currency (in that case the Dutch guilder) producing a fall, in terms of national currency, in the intervention price received by Netherlands producers (but without the introduction of compensatory amounts) only a special measure by the Council (Regulation (EEC) No 2544/73 of 19 September 1973) had made it possible to grant, on occasion and in part, a Community aid to make good the loss of value caused, on and after 17 September, by this change in the green rate for Netherlands holders of butter who, on 15 September, were parties to a private storage contract. This argument carries little conviction. The measure in question had been introduced at the last minute (under the second paragraph of Article 149 (2)) in the wider context of the measures to be adopted in agriculture following the raising of the central rate for the Dutch guilder, which could be adopted only by the Council after consulting the European Parliament. Its adoption demonstrates nothing more than that such a change in an upward direction of the green rate was accompanied by a change in the reverse direction in the amount of aid and that the Irish Government did not seek or obtain, for its holders of butter, the derogation which the Netherlands Government had obtained for its own in 1973, or which (Council Regulation (EEC) No 557/76 of 15 March 1976) the German Government obtained in March 1976 from the German intervention agencies for vendors of skimmed-milk powder.

(3). The intervention price for butter is a means and not an end in itself; it is designed to contribute to the attainment of the target price for milk. The idea behind the basic regulation, No 804/68 of the Council, is that the milk producer should get the full benefit of each and every increase in the intervention price. The Commission's argument is that, as the amount of private storage aid must faithfully reflect changes in the intervention price (itself closely linked with the market price) prevailing when goods are removed from store, no aid is granted if the difference between the intervention price, converted into national currency, in force when goods are taken into store and the intervention price when goods are taken out of store exceeds the amount of aid expressed in national currency. This is because storage, private or public, is not a productive process and the legitimate interests of the concerns which, like the plaintiff co-operative in the main action, make use of this facility are not so deserving of protection as those of milk or butter producers; moreover, the latter do not get a pennyworth of the benefit which in this way unexpectedly enures to the concern effecting the storage. This argument seems to me to be correa and the contested regulation does not infringe Article 10 (1) of Regulation (EEC) No 985/68 of the Council which reads: The amount of private storage aid shall be fixed for the Community with reference to storage costs and foreseeable price trends for fresh butter and stored butter.

(4). The plaintiff in the main action refers to the infringement of the principle of protection of legitimate expectation and complains of interference by the Community, to be precise, by the Commission, with the contractual arrangements it entered into with the Irish Minister for Agriculture before the entry into force of Regulation (EEC) No 2517/74 under which it had in a way fixed in advance the aid to which it claims to be entitled.

My opinion is that the Court should rule as follows:

1 Translated from the French