Opinion of Mr Advocate General Reischl

Mr President,

Members of the Court,

In the proceedings to be dealt with today, Mr Pool, an English calf-breeder, is claiming that the conversion rate for the pound sterling has been determined improperly in regard to the law relating to the common agricultural policy, thereby causing him damage in the sale of his products.

The following brief introduction may make this claim clearer:

Mr Pool is engaged in a sector which comes under the common organization of the market in beef and veal (Regulation No 805/68 of the Council of 27 June 1968, Official Journal, English Special Edition 1968 (I), p. 187). Under Article 3 of that regulation a guide price for calves and a guide price for adult bovine animals are determined for each marketing year. I need not go into detail but this is of importance for Community intervention measures (aids for private storage, buying-in by intervention agencies, price support premiums). Furthermore it is a factor in the calculation of levies on imports from non-Member States (see Regulation No 425/77, Official Journal L 61 of 5 March 1977, p. 1) so it may be said that the market price prevailing within the Community is influenced by the guide price.

The guide price is determined in units of account which must be converted into national currencies since they do not constitute means of payment. To that extent Regulation No 129 of the Council on the value of the unit of account and the exchange rates to be applied for the purposes of the common agricultural policy (Official Journal, English Special Edition 1959-1962, p. 274) which has been repeatedly amended especially by Regulations Nos 653/68 (Official Journal, English Special Edition 1968 I, p. 121) and 2543/73 (Official Journal L 263 of 19 September 1973, p. 1) is of fundamental importance — again I do not need to go into detail since currency problems in the common agricultural market are pending before the Court in a number of other proceedings. Article 1 of this regulation defines the value of the unit of account which plays a part in rules of the common agricultural policy and determines when and how the value of the unit of account may be altered. Article 2 governs the way in which the conversion of amounts which are important in rules on the common agricultural policy is to take place from one currency into another. In principle conversion should take place in accordance with the currency parities notified to the International Monetary Fund; however, if the effective exchange rate diverges from the parity notified to the International Monetary Fund thereby jeopardizing the implementation of agricultural policy rules, then according to this provision it is possible under its terms for exchange rates quoted on the most representative foreign exchange market or markets to be used temporarily. Moreover, Article 3 of Regulation No 129, in the wording amended by Regulation No 2543/73, provides that: Where monetary practices of an exceptional nature are likely to jeopardize the implementation of the instruments or provisions referred to in Article 1 the Council acting by a qualified majority upon the proposal of the Commission, or the Commission, acting within its powers under those instruments or provisions, after consultation with the Monetary Committee, which may take place subsequently in cases of urgency, may make derogations from the regulation. Some examples of monetary practices of an exceptional nature are put forward, in particular, where a member country of the International Monetary Fund allows domestic fluctuations of the value of its currency beyond the limits laid down by the rules of the Fund or where a country resorts to abnormal exchange techniques such as fluctuating or multiple exchange rates.

Consequently the conversion into national currencies was originally effected in accordance with the parities notified to the International Monetary Fund. The famous disturbances in the currency exchange field in particular from 1971 onwards when the Bretton Woods system was abandoned necessitated the introduction of monetary compensatory amounts in Regulation No 974/71 (Official Journal, English Special Edition 1971 (I), p. 257) which has been repeatedly amended, in particular by Regulations Nos 2746/72 (Official Journal, English Special Edition 1972 (28-30 December), p. 64), 509/73 (Official Journal L 50 of 23 February 1973, p. 1) and No 1112/3 (Official Journal L 114 of 30 April 1973, p. 4). Since upon the accession of the three new Member States in 1973 it was desired to avoid monetary compensatory amounts additional to the accessionary compensatory amounts, for the first time special conversion rates were determined in derogation from Article 2 of Regulation No 129, which in the case of Ireland and the United Kingdom corresponded to the representative rate of the currencies of both of these Member States (Regulation No 222/73, Official Journal L 27 of 1 February 1973, p. 4). Although these conversion rates for the United Kingdom and Ireland were at first uniform, this parity was abandoned with effect from 7 October 1974 by Regulation No 2498/74 (Official Journal L 268 of 3 October 1974, p. 6) and this has remained the position ever since, to a varying degree.

As regards the original Member States, special conversion rates were at first determined in 1973 for guilders and lire (Regulations Nos 2544/73, Official Journal L 263 of 19 September 1973, p. 2, and 2958/73, Official Journal L 303 of 1 November 1973, p. 1). These rules were then generally extended and since the date of Regulation No 475/75 (Official Journal L 52 of 28 February 1975, p. 28), representative rates are applied as conversion rates for all Member States.

Mr Pool, the applicant in these proceedings, thinks that when the Council determined these conversion rates it did not act properly. His major claim is that in spite of the uniform currency area for the United Kingdom and Ireland in existence until the beginning of 1979, representative rates were determined at different levels for the two countries and in a way that assumed the Irish pound to have suffered greater depreciation. This led to producers in the United Kingdom receiving less in national currency than producers in the other Member States including Ireland in particular. This situation, Mr Pool claims, is not compatible with the fundamental rules of the common market, in particular with the prohibition on discrimination contained in Article 40. That is why the applicant has sued the Council for compensation for the damage thereby caused. Since he regards the representative rate of the Irish pound as being closer to reality, he calculates his measure of damages by taking this rate, which is a more favourable conversion rate for producers, as regards the English market too and for the sales he made on this market. Leaving aside the period from 7 October 1974 to 10 October 1976 in which the difference between the exchange rates was under 10 %, he thus arrives at damages amounting to £9504 for the period from 11 October 1976 to February 1979. He claims the Council should be ordered to pay this sum in accordance with his application on the basis of Article 178 and the second paragraph of Article 215 of the EEC Treaty.

On the other hand the Council contends that the application should bė dismissed as being unfounded.

To my mind the following considerations should be put forward in this case:

1. The errors asserted by the applicant — improper determination of the socalled green pound for the United Kingdom — are allegedly linked with provisions contained in a series of regulations which I do not need to recount individually here. These are undoubtedly genuine legislative measures since they all concern an indeterminate number of businesses and persons.

2. In support of his claim the applicant has put forward a number of infringements which the Council is alleged to have committed.

3. If one therefore focuses one's attention upon the criticism with regard to the discrimination under which British producers are supposed to have suffered compared to the Irish owing to the adoption of different conversion rates for the green pound, one must first recall that the applicant founds this criticism upon the fact that on the one hand both countries formed a common currency area at the time in question and on the other hand producers farming in both countries found themselves in exactly the same situation as regards the price increases caused by the devaluation of the pound, so that the different calculation of the conversion rate for the green pound which directly affected income levels and led to distortions in competition could not therefore be justified at all.

4. In summing up I say this: it may be hard to suppress a feeling of disquiet and there may be justification for some misgivings; the efforts of the Commission to achieve solutions more suited to the common market cannot therefore be too strongly approved and correspondingly the Council cannot be too energetically encouraged not to turn a deaf ear to such proposals in the interests of maintaining a genuine common market; be that as it may, there is no escape from the conclusion in this case that the exceptionally strict requirements laid down by case-law for a claim for administrative liability based on the illegality of legislation are not satisfied. In spite of everything that has been said there is an absence in this case of any sufficiently serious breach of a superior rule of law for the protection of the individual; accordingly no further comments are required on the extent of the alleged damage or on the problems of the chain of causality.

5. I therefore suggest that the application be dismissed as unfounded. As far as the costs are concerned, however, I think it is right that account should be taken of the fact that the subject-matter of the case is extraordinarily complex, and that it was not surprising that it gave rise to misgivings. Therefore the parties should bear their own costs under the first paragraph of Article 69 (3) of the Rules of Procedure.

1 Translated from the German