Opinion of Mr Advocate general Reischl delivered

Mr President,

Members of the Court,

The Court has frequently had to deal with problems of production refunds in the context of the common organization of the market in cereals and with questions connected therewith. Consequently I can limit the introduction to my opinion today to the following particulars.

The aim of the rules for production refunds, which have been in force for many years and which according to Article 11 of Regulation (EEC) No 2727/75 of the Council (Official Journal L 251 of 1 November 1975, p. 1) are optional, is to maintain the competitive strength of the starch industry in the Community, which — as a result of measures relating to the common organization of the market — has to process raw materials that have gone up in price, as against the products of non-member countries, which can usually obtain their supplies on the world market on easier terms, and also as against the producers of synthetic starch products, especially those extracted from oil, with which it is in competition as far as their use in certain technical fields is concerned. Accordingly provision is made — and this is all that concerns us in the present case — that a production refund may be granted for maize used in the Community for the manufacture of starch. The rate of the production refund applicable has been fixed in Regulation No 2742/75 of the Council (Official Journal L 281 of 1 November 1975, p. 57) and has been varied from time to time in the subsequent marketing years.

Provision is also made for the same production refund to be granted for the manufacture of potato starch, because there is also competition in some of the spheres in which it is used. Since however there is no common organization of the market in potatoes and therefore no regulation of prices corresponding to that in the organization of the market in cereals, it is also provided that the refund shall only be paid if the processing industry pays the growers a minimum free-at-factory price for the potatoes. The second subparagraph of Article 11 (2) of Regulation No 2727/75 provides that this minimum price shall consist of a lump sum to be paid by the producers of potato starch plus an amount corresponding to the production refund; the production refund must therefore be passed on to the potato growers. This minimum price has also been fixed in Regulation No 2742/75 and varied from time to time in the subsequent marketing years.

When the Commission was preparing the provisions to be applied to the organization of the market in cereals for the 1978/79 marketing year it came to the conclusion that the constraints imposed on the potato starch industry could lead to a disturbance of the balance between the different starch industries and it might therefore prove necessary to provide for a premium to be paid to potato starch manufacturers (cf. sixth recital in the preamble to Council Regulation (EEC) No 1125/78 of 22 May 1978, Official Journal L 142 of 30 May 1978, p. 21). The Council considered that this was necessary and replaced Article 11 (3) of Regulation No 2727/75 by the following paragraphs contained in Article 11 of Regulation No 1125/78:

Council Regulation (EEC) No 1127/78 (Official Journal L 142 of 30 May 1978, p. 24) accordingly provided — in addition to fixing the production refund for maize for the production of starch at 17.00 units of account per tonne and to increasing the minimum price of potatoes from 175 units of account to 178,50 units of account — that the following Article 3a should be added to Regulation No 2742/75:

The Italian Government considers that, in so far as these provisions grant a premium to potato starch manufacturers, they are for various reasons contrary to the Treaty. It has therefore claimed in an application lodged at the Court on 31 July 1978 that the Court should annul Regulations Nos 1125/78 and 1127/78 in so far as they relate to the said premium.

The defendant Council and the Commission which has intervened in this case in support of the Council contend that the Court should dismiss the application.

I — The admissibility of the application

The first thing to do in considering this action is to go into the question whether it is admissible. It is true that only a question as to its admissibility has been raised and that no actual objection has been made. But the Court naturally has to consider the question raised since according to the well established caselaw questions of admissibility even have to be examined by the Court of its own motion.

The Council, the defendant in this action, raises a question of admissibility on the ground that the representative of Italy, when the rules at issue were being drawn up, from time to time voiced misgivings and opposed them, but later when the Council was considering at its 517th meeting on 22 May 1978 the formal adoption of a set of measures relating to prices and questions connected therewith, which had been decided upon during the session from 8 May to 12 May 1978 in the form of a package, voted in favour without any reservation; he did not even make his vote conditional on the consent of the Italian Government as another delegation had done with reference to another point. In this connexion the defendant also attaches importance to the fact that the Italian representative on the Management Committee for Cereals approved the proposal for the adoption of an implementing regulation by the Commission (Commission Regulation (EEC) No 1809/78 of 28 July 1978, Official Journal L 205 of 29 July 1978, p. 69) which laid down the rules for paying the premium. For these reasons the Council would like to rule out the possibility of any action being brought referable to the said rules concerning the payment of the premium. On this issue it relies on the principle of legal certainty. Furthermore the Council submits that the Italian Republic does not have the interest in the action which every litigant must have. In this connexion what might be called personal interest — the special position of a Member State — is irrelevant, whereas it may be said of the Community interest that the representatives of the Member States on the Council have already seen to it that that interest is protected. However in every case the measures in question, which are at issue in these proceedings, are economic acts presupposing a thorough evaluation of the economic situation. Consequently the Member States, which have participated through their representative in this evaluation, are not allowed to rely in legal proceedings on certain causes of action, for example in these proceedings those which relate to an alleged disregard of Italy's interests or to the principle of proportionality.

In answer to this argument the Italian Republic points out that the Council is a Community organ and not a common organ of all the Member States which is dependant on the latter. The Council therefore forms a collegiate will of its own and in this connexion the vote of an individual Member State does not have any independent significance. Since this vote does not express the view of an organ of the particular Member State, the act based on that vote cannot be imputed to the Member States but from their standpoint represents the act of a third party. Consequently in the present case, for the purpose of substantiating the admissibility of the application reliance cannot either be placed on the principle which rules out a venire contra factum proprium. The principle of legal certainty, which plainly has a different meaning, in that it is intended to ensure that the wording of a rule has been stated accurately and that a law must be certain before it is applied, is just as unreliable. Similarly considerations such as those relating to waiver or approbation cannot be called in aid, because they presuppose that the measure under consideration is complete, whereas in this case the conduct of the Member State — its vote — either precedes the relevant disputed act or indeed coincides with it. Likewise the inadmissibility of the application cannot be substantiated by the lack of any legal interest to be protected, even though Article 173 of the EEC Treaty clearly confers on Member States by way of privilege a special right of action, to which no special conditions apply as they do for instance to the right of action under Article 38 of the Treaty establishing the European Coal and Steel Community. Finally there can also be no question of limiting the statement of claim, which is the Council's alternative submission, because the behaviour of the representative of the Italian Government in the Council may only be attributed to him and not to the Italian Government, whose activity is confined to the appointment of a member of the Council.

1. As far as concerns this important difference of opinion it is not disputed that the representative of the Italian Government in the Council cast a vote without any reservation in favour of the measures which are relevant to this case and also that, when the before-mentioned implementing provisions to be adopted by the Commission were discussed by the Management Committee for Cereals there was no evidence of any opposition on the pan of Italy. On the other hand the case-law of the Coun, which is to be borne in mind in connexion with the conduct of the representative of the Italian Government during the preparatory meetings of the Council, has already stressed that reservations or statements which were made in the course of preparatory discussions have no relevance unless they are recorded in the wording of a Council decision (cf. judgment of 18 February 1970 in Case 38/69 Commission of the European Communities v Italian Republic [1970] 1 ECR 47).

2. If this conclusion is thought to go too far — incidentally Daig in the Kommentar zum EWG-Vertrag [EEC Treaty Commentary], published by Von der Groeben-Boeckh-Thiesing, 2 Auflage, S. 220 ff, [2nd Edition, p. 220 et seq.] states that under such circumstances an action is inadmissible if certain conditions are fulfilled — nevertheless the question at least arises, as far as concerns the admissibility of some of the grounds of claim, whether or not a strict standard is to be applied. Even if an interest in a specific cause of action does not in principle have to be substantiated, this is certainly not to be dismissed out of hand.

II — The substance of the application

In view of the considerations which have just been put forward, the compelling nature of which cannot in my view be called in question, I will take the liberty of seeing to it that my further examination of this case. which I nevertheless do not intend entirely to disregard, is relatively brief.

1. Lack of reasoning

The applicant complains that Regulation No 1125/78 has two defects: in the first place the statement of the reasons upon which it is based is inadequate, because it does not disclose the kind of difficulties with which the potato starch industry is beset and that these difficulties are in fact due to the competition from maize starch. In the second place the said statement of reasons is inconsistent, because, on the one hand it stresses that under the rules for the payment of refunds competing products should be accorded equal treatment and, on the other hand, it states that it is necessary to give preferential treatment to one product, potato starch, by means of the granting of a premium to potato starch manufacturers.

Regulation No 1127/78, which fixed the amount of the premium, justified it by reference to the price of the by-products obtained from the manufacture of maize starch but nevertheless did not give any more precise particulars of this price and of production costs, which have not remained unchanged.

2. Placing producers of maize starch at a disadvantage

The applicant's submission that granting the producers of potato starch a premium causes considerable disturbance of the balance between maize starch and potato starch and leads to a substantial competitive disadvantage and to genuine apprehension on the pan of producers of maize starch is undoubtedly the main issue in this case. In support of this submission the applicant's argument goes right back to 1967. The regulation adopted at that time had in fact already failed to produce a balance between maize starch and potato starch but had placed the former at a disadvantage. In those days a difference in the costs of raw materials — in the proceedings this was referred to as delta — of 27,68 units of account was considered to be reasonable. But if manufacturing costs were taken, and those of maize starch were much higher than those of potato starch, then, with reference to one starch unit, maize starch bears a heavier burden than potato starch, namely 127,88 units of account as against 123,10 units of account for potato starch. The position of maize starch from the 1974/75 marketing year onwards got much worse. At that time the delta which has already been mentioned, had widened considerably. The price of maize went up more than the minimum price of potatoes, and in view of the trend of world market prices the amount of the refund was reduced without its being correspondingly increased when world market prices fell later. When a premium for producers of potato starch was introduced during the 1978/79 marketing year this situation became quite untenable. If in this connexion the view was taken that the rate of increase in the value of the by-products of maize starch differed from that of potato starch, on that occasion the fact was overlooked that this had already been allowed for when the delta was widened during the preceding years. Furthermore, in this connexion the specific manufacturing costs of the by-products are also to be taken into account. If it is in addition borne in mind that the processing costs, which are anyhow higher in the case of maize starch than of potato starch, have increased considerably since 1967 then, by making an appropriate adjustment to the calculations produced by the Community institutions, the conclusion is reached that even before the introduction of the premium the manufacture of maize starch had been about 8 units of account more expensive than that of potato starch and that in consequence the latter did not labour under a competitive disadvantage which had to be offset by means of a premium.

3. For the purpose of the further consideration of the dispute I am assuming that the effect of the rules for the granting of a premium is to establish a balance between maize starch and potato starch. Should it in fact have to be assumed — possibly after obtaining an expert opinion — that the premium as well as establishing a balance gives unilateral preferential treatment to the manufacturers of potato starch and thereby causes distortion in the conditions of competition, then on such an assumption it would be absolutely clear that it would be to that extent illegal. There certainly could not then be said to be any objective justification within the meaning of the prohibition of discrimination. There would clearly also be a breach of the principle of proportionality, because the rules for the attainment of the objectives sought to be achieved by them would not be absolutely necessary.

4. The alternative examination of the substance of the case consequently leads to the conclusion that an. unequivocal determination of the question whether the premium paid to the producers of potato starch disturbs the balance of competition with the producers of maize starch is still not possible. An expert opinion on this issue is absolutely necessary. If it were to confirm the economic assessment, which in the Council's view is correct, it would then also be clear that there cannot be said to have been any failure to take into account the objectives of Article 39 of the EEC Treaty, any breach of the prohibition of discrimination or any breach of the principle of proportionality.

III —. Since I am in the first place of the opinion that the application which has been lodged is to be regarded as inadmissible I submit that the Court should dismiss it for that reason. Since neither the defendant nor the Commission which has intervened in support of it has made any application as to costs, the costs of the action including the costs of the interlocutory proceedings for the adoption of an interim measure, in which the applicant was also unsuccessful, the parties may bear their own costs.

1 Translated from the German