Opinion of Mr Advocate General
Mr President,
Members of the Court,
In the joined cases which form the subject of this opinion, the validity of Comission Directive No 80/723/EEĆ of 25 June 1980 on the transparency of financial relations between Member States and public undertakings (Official Journal, 1980, L 195, p. 35) is to be determined. The contents of this directive, which is based on the EEC Treaty and in particular Article 90 (3) thereof, may be outlined as follows:
Under Article 1, transparency is to be ensured by the Member States so that public funds made available directly or through the intermediary of public undertakings or financial institutions and the use to which those funds are actually put emerge clearly. According to Article 3, the transparency of financial relations which is to be ensured is to apply in particular to the setting-off of operating losses, the provision of capital, nonrefundable grants, or loans on privileged terms, the granting of financial advantages by forgoing profits or the recovery of sums due, the forgoing of a normal return on public funds used, and also compensation for financial burdens imposed by the public authorities. Article 5 provides that the Member States are to keep the information concerning the financial relations in question at the disposal of the Commission for five years and are to supply it to it on request. Article 2 makes it clear that for the purpose of this directive public authorities are to be taken to mean anv undertaking over which the public authorities mav exercise directly or indirectly a dominant influence bv virtue oí their ownership of it, their financial participation therein, or the rules which govern it. Such a dominant influence is to be presumed when these authorities directly or indirectlv in relation to an undertaking hold lhe maior pan of the undertaking's subscribed capitai, or control the majority of the votes attaching to shares issued bv the undertakings, or can appoint more than half of the members of the undertaking's administrative, managerial or supervisory body. According to Article 4, the directive is not to apply, first, to smaller undertakings and undertakings for the supply of services, whose activities are not liable to affect trade within the Community to an appreciable extent, secondly, to public credit institutions and, finally, to those undertakings which carry on activities in the area of water and energy, including in the case of nuclear energy the production and enrichment of uranium, the reprocessing of irradiated fuels and the preparation of materials containing plutonium, as well as in the areas of posts and telecommunications and transport. Finally under Article 8 the directive was to be incorporated into national law by 31 December 1981.
Before that date the French Republic, the Italian Republic and the United Kingdom each brought an action against the Commission under Article 1973 of the EEC Treaty, by applications which were received at the Court Registry on 16, 18 and 19 September 1980 respectively, in which they claimed that the abovementioned directive should be declared void. In addition, the French Republic, as intervener, supported the applications of the Italian Republic and of the United Kingdom. The Federal Republic of Germany and the Kingdom of the Netherlands were admitted as interveners in support of the Commission, which claimed that the applications should be dismissed as unfounded.
My views on these applications, which are grounded on lack of competence, infringement of an essential procedural requirement, infringement of the Treaty and misuse of powers, are as follows:
1. The applicants base their applications first and chiefly on the ground of the lack of competence of the Commission, which in their view was not authorized to adopt a directive containing such provisions. Essentially in agreement, they state that Article 90 (3) of the EEC Treaty confers a power on the Commission as guardian of the Treaty only to take action against particular Member States in an individual case, but does not provide a general legislative competence to create new obligations for Member States which are not laid down in the Treaty. The subject-matter of the directive is, moreover, so closely connected with the field of application of Articles 92 and 93 of the EEC Treaty that the Council alone, under Article 94 of the EEC Treaty, had power to legislate. However, in so far as the Commission needed information going beyond the field of State aids, Article 213 of the EEC Treaty, which also requires the Council's participation, would, in the applicants' opinion, provide the necessary legal basis.
2. Moreover, on the requirements as to the contents which may be made of a directive based on Article 90 (J) of the EEC Treaty, the applicants take the view that on the basis of that provision the Commission can react only to repress something actually done by the Member States, but cannot prescribe abstract measures of a preventive nature.
3. Furthermore it then remains to be determined how the obligation incumbent on the Commission under Article 90 (3) of the EEC Treaty, inter alia to ensure the application of the provisions of Article 90 (1), is constituted in detail. For that purpose it is necessary to submit to closer investigation the content and scope of Article 90 (1) of the EEC Treaty, in view of its position in the Treaty system as a whole.
4. Therefore it is in addition above all necessary to investigate the question whether other special Treaty rules preclude the issue of a directive of this kind by the Commission. Essentially in agreement on this point, the applicants argue that on account of the close connection between the provisions of the directive and State aids, only the Council is empowered to issue such rules under Article 94 of the Treaty. In the view of the Commission and also of the [German] Federal Government, on the other hand, the subject-matter of the directive does not fall within the field of application of Articles 92 and 93 of the Treaty. Consequently the Council is not competent to issue such a rule, as its power under Article 94 cannot go beyond the provisions of the said article. In the view of the Kingdom of the Netherlands also, the Commission has such a competence, without prejudice to the question whether the Council might possibly at the same time have been able to issue rules on the basis of Article 94 of the Treaty.
5. Contrary to the applicants' opinion, it is not possible either to refer the Commission within the framework of the performance of its supervisory function under Article 90 of the Treaty to Article 212 of the Treaty, which provides that the Commission may collect any information and carry out any checks required for the performance of the tasks entrusted to it within the limits and under conditions to be laid down by the Council in accordance with the provisions of the Treaty. Even on the grounds of the general logic on which the Treaty is based, that provision cannot be applied to requests for information which the Commission makes to Member States within the framework of its powers and which the latter must answer properly and fully on account of the duty to cooperate, incumbent upon them under Article 5 of the Treaty. It would be simply absurd if the Commission could not in fulfilling its task under the Treaty obtain necessary information from the Member States without the cooperation of the Council. Consequently the purpose of that provision cannot be to confer upon the Commission a right to information from the Member States which is dependent upon actions by the Council, but it can be intended only to regulate information from undertakings and other third parties, which, unlike the Member States, are not subject to the duties resulting from Article 5.
6. As it must thus be accepted that the Commission can in principle require by means of a directive the disclosure of the financial relations between public authorities and public undertakings, it still remains hereinafter to examine whether in the arrangement of the content of the directive it has misused its powers or infringed other principles in the Treaty.
7. Against the directive's validity it is further argued that it was not needed and that in any event it goes beyond what is necessary in its requirements. However, contrary to be view put foward in particular by the French Government, Article 90 (3) does not pursue the aim of conferring on the Commission merely a subsidiary competence in the event of the Council's not being competent, the element where necessary can mean only that on account of the complex relations between the Member States and their public undertakings, the Commission is to be given a discretion in the fulfilment of the tasks conferred upon it to judge whether or not an action is necessary.
8. From the above, moreover, it follows that the criticism that the list of financial relations arising out of Anieles 1 and 3 of the directive without being exhaustive clearly exceeds the limits of the concept of aid is not valid. In assessing that allegation is must also be remembered that the purpose of the directive does not consist in enumerating capital movements or even defining groups of aids which are incompatible with the common market. However, so that the Commission will be in a position to form an opinion thereon at a later stage, it must also be entitled to a margin of discretion to decide what paniculars it considers necessary for the fulfilment of its tasks. In determining the limits of the discretion, however account must be taken of the fact that the concept of aid, as the phrase used in Article 92 of the Treaty aid... in any form whatsoever shows, must be interpreted broadly, so as to include any grant or advantage from the public authorities which is capable of distoning conditions of competition. However, such a range of possible aids inevitably requires that the series of financial relations, which is to provide the basis for an examination as to whether or not an aid is acceptable must necessarily also be wide.
9. Finally it is also clear that in delimiting the directive's field of application the Commission must have the power to define concepts such as public authorities and public undertakings. At the same time, in view of the objective of Article 90 (1) of the Treaty and of the different structures in the Member States, exception may not be taken to the fact that, for the sake of better understanding of Sute activity, the directive refers to public authorities instead of Member State and thereby includes both the Sute and also regional or local authorities.
10. As it is certain that treating public undertakings differently from private undertakings with regard to the disclosure of financial relations is objectively justified, I can also deal shortly with the funher objection raised by the French and Italian Governments, that the directive results in discrimination against public undertakings. Together with the Commission and those supporting it, I must point out in this connection that the directive, which is addressed to the Member States, can create obligations only for the latter and not for public undertakings. Futhermore, it is clear that, if the Member States exercise an appropriate form of supervision over public undertakings, there is as a rule also no reason why the obligations concerned should be transferred to those undertakings.
11. Lastly, with the question of the directive's field of application is also linked the final subsidiary criticism raised by the French Government to the effect that the directive, based on the EEC Treaty, is inconsistent with the principle of the functional separation of the three Communities set ont in Article 232 of the EEC Treaty, which expressly provides that the secondary legislation based on the EEC Treaty is not to affect the provisions of the Treaty establishing the European Coal and Steel Community and is not to derogate from those of the Treaty establishing the European Atomic Energy Community. From the definition of public undertakings contained in Article 2 of the directive and also from the exceptions enumerated in Article 4 thereof, it may, however, be inferred that apan from those exceptions the directive is to apply to all financial relations between Member States and public undertakings covered by the three Treaties.
12. Therefore, as an examination of all the grounds raised by the applicants and by the French Government in support has revealed that there can be no objection to the legality of the directive in question, I propose that the applications should be dismissed as unfounded. As the applicants have failed in their submissions, they must also be ordered to pay the costs.
1 Translated from the German.
2 Judgment of 17 Januarv I98C in Cajc 792/79 R, Cimera Cart Ud. v Commtmon, [1980) ECR 119. at p. 131.
3 Judgment of 16 November 1977 in Cue 13/77. C.B.-INNO-BM v Vereniging van de Kleinhandelaar! in Tabak lATAB), [1977] ECR 2115
4 Judgmeni of 22 March 1977 in Case 78/76 7S/76. Striniand Weinlig v federai Republic o/Grfunv. 1997 ECR 595
5 Judgment of 11 December 1973 in Case 120/73 — Gebr. Lorenz v Feaeral Republic oi Germany and the Land Rheinland-Pfalz [1973) ECR 1471.
6 Judgement of 2 July 1974 in Case 173/73 — Republic ot Italy v Commtmon [1974] ECR 709.
7 Judgment of 21 March 1974 in Cut 127/73. Belgiicbe Radio en Televisie and Société Belge dei Auteurs, Compoíiteun et Ėdueun v SVISABAM and hlV Fontor, [1974] ECR 313.