JUDGMENT OF 15.3.1984 — CASE 310/81 EISS / COMMISSION

In Case 310/81

THE COURT (First Chamber) composed of: T. Koopmans, President of Chamber, A. O'Keeffe and G. Bosco, Judges, Advocate General: G. F. Mancini Registrar: P. Heim

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

II — Conclusions of the parties

III — Submissions and arguments of the parties

IV — Questions put by the Court

V — Oral procedure

Decision

Costs

I —. Facts and written procedure

(a). a large number of the trainees were over 40;

(b). the requirement with regard to unemployment was not fulfilled in the majority of cases, since many trainees were performing regularly paid duties as assistant social workers in outlying offices of the Ministry of Labour itself, with Alitalia or with other bodies, under agreements which the latter had made with the Board;

(c). the geographical origin of the trainees did not satisfy the requirements laid down, since the trainees did not come from the Mezzogiorno;

(d). moreover, the number, the content and the progress of the courses provided did not comply with the terms of the scheme.

II —. Conclusions of the parties

(a). by not having placed at its disposal, pursuant to Article 2 (2) of Commission Decision No 2203/def./27 of 27 December 1973, the full sum of LIT 371649981 which was the balance which the Board should have received in April 1978;

(b). by virtue of the fact that, as a result of not having had the use of that sum when it was required, the Board was made to incur a large overdraft at the bank and suffered consequential damage in the form of considerable charges for interest, particulars of which will be furnished in the course of the proceedings.

(a). declare that the action brought by the Board on 8 December 1981 is inadmissible;

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

(c). order the applicant to pay the costs.

(a). order the Commission, after the examination of witnesses requested in the reply and any other measure of inquiry which it thinks appropriate, to pay damages to make up the total amount of LIT 719909560, together with the interest provided for until final discharge, an equal sum remaining charged to the Italian State;

(b). order the defendant to pay the costs.

III —. Submissions and arguments of the parties

(a). an order that the Commission make over the sums, which it should have granted and wrongfully failed to grant, to the Italian Government, for immediate transmission to the Board; such sums include both the contributions for 1973, even reduced, and the outstanding balance of 15% of the contributions at issue; the whole amounting in all to LIT 743299382, half of which is to be charged to the European Social Fund and half to the Italian Republic;

(b). the other damage resulting from the substantial indebtedness of the Board, and arising from the unjustified withholding of payment, may be assessed at LIT 692519738 at 31 December 1981, which may be apportioned to the Commission for the share attributable to it and to the Italian authorities for the share attributable to the Italian Republic.

(a). it is a fact that the decision of 27 December 1973, which showed assistance to the Board amounting to 439554.90 units of account (equivalent to LIT 274721810) for 1973, was neither revoked nor amended by the Commission's subsequent decision of 30 December 1974;

(b). it is a fact that the assistance which was allocated for 1974 in the decision of 27 December 1973, amounting to a total of 2322377.25 units of account (equivalent to LIT 1451485782), was subsequentlyapportioned by the decision of 30 December 1974 as to LIT 609798130 for 1974 and LIT 841678652 for 1975;

(c). it is a fact that as a result of the findings made jointly by officials of the Commission and the Ministry of Labour the contributions for 1973 were reduced from the initial sum of LIT 274721810 provided in the decision of 27 December 1973 to LIT 134912640, but were not refused in their entirety;

(d). it is a fact that the reduction in the contribution to the running expenses for 1973, which followed joint findings made by Community and national officials, has not hitherto been the subject of a formal decision;

(e). it is a fact that, in accordance with the practice of the Commission, the decisions adopted at the end of the year allocating the funds relate only to the contributions for the current year and, in some cases, to the following year, but never entail the implied revocation or the amendment of allocations laid down for the preceding year;

(f). it is a fact that, despite the Commission's practice in all other cases of intervention by the European Social Fund, the Board has not received the expected payment either for 1973 or for subsequent years even though the sums were minimal;

(g). it is a fact that the Board has not yet received the final balance of the payments which are not in dispute, but has received only 85% of the contribution allocated to it, with the result that the remaining 15% is still owed to it.

(a). to produce the request made by the Italian Republic for assistance to the Board with all the annexes to the original request; or, at least, to confirm that the copy of the programme laid before the Court by the Board is identical to that attached to the request which was later accepted;

(b). to specify whether the Commission's consistent practice is to give effect to the allocations ordered by the European Social Fund solely for each individual financial year, in which case the tacit or implied revocation of previous decisions relating to earlier financial years is inconceivable.

IV —. Questions put by the Court

V —. Oral procedure

1. By application lodged at the Court Registry on 8 December 1981 pursuant to Article 178 and the second paragraph of Article 215 of the EEC Treaty the Ente Italiano di Servizio Sociale [Italian Social Services Board, hereinafter referred to as the Board] claimed compensation for the damage caused by the Commission's not having placed at its disposal, under Article 2 (2) of the Commission's decision of 27 December 1973, the sum of LIT 371649981 which it should have received as a final balance by April 1978, and for the damage arising from the fact that, as a result of not having had the use of that sum when it was required, the Board was made to incur a large overdraft at the bank and suffered consequential damage in the form of considerable charges for interest.

2. In its application, the Board states that the application, which is to be served on the Commission, may be regarded as formal notice under the second paragraph of Article 175 of the EEC Treaty. In its reply the applicant has withdrawn that submission.

3. In its reply, the applicant has specified that its claim for compensation is based exclusively on the non-contractual liability of the Community under the second paragraph of Article 215 of the Treaty.

4. The application states that in 1972 the Directorate General for the vocational guidance and training of workers at the Italian Ministry of Labour and National Insurance instructed the Board to study, draft and submit a special programme for the training and requalification of Italian workers who were unemployed or in precarious conditions of employment for work in the social services.

5. In a letter dated 10 July 1973, the Directorate General announced that it had sent the applicant's programme to the Commission so that it might take the decisions falling within its competence to secure the intervention of the European Social Fund.

6. The applicant states further that it was requested to execute the training project which, for the initial phase of development in 1973, entailed intensive courses to requalify social workers attached to the Board whose precarious state of employment made them eligible for assistance by the European Social Fund in accordance with the Council Decision of 1 February 1971 (Official Journal, English Special Edition 1971 (I), p. 52).

7. In a decision of 27 December 1973 addressed to the Italian Republic, the Commission allowed the request for assistance submitted by the Italian Republic, to carry out a training project in the period from 1 January 1973 to 31 December 1974 for some 1150 unemployed young persons from the Mezzogiorno to be reemployed as social workers or assistants in the Mezzogiorno or in areas with a high proportion of immigrant workers from the Mezzogiorno. The decision put at the disposal of the Board LIT 1726207592 designated as assistance by the European Social Fund in order to carry out the operations referred to in the decision. That sum was allocated as to LIT 274721810 for 1973 and as to LIT 1451485782 for 1974.

8. It appears from the preamble to that decision that on 10 July 1973, the Italian Republic had submitted a request to the European Social Fund on behalf of the Board to support, in the period from 1 January 1973 to 31 December 1974, a project intended to promote the training of some 1150 unemployed young persons from the Mezzogiorno as social workers or assistants to be reemployed in that capacity in the Mezzogiorno itself or in areas with a high proportion of immigrant workers from the Mezzogiorno. The Commission found that that request was in accordance with the provisions governing the operation of the European Social Fund, subject to checks being carried out in the course of the project's execution on its compliance with the rules in force.

9. It appears from the file that after a check was carried out in June and July 1974 by officials of the Commission and the Italian Ministry of Labour, the Commission took the view that the criteria which it had laid down in its decision were not satisfied by the Board's activities in 1973. The Commission accordingly refused the assistance which had been allocated by the European Social Fund for 1973.

10. By decision dated 30 December 1974, the Commission agreed to the request of the Italian Republic that since there had been delays in putting the programme into effect, the apportionment of the amount of assistance for this project, among others, as between financial years, should be modified, and it allocated the assistance to be granted as follows: LIT 609798130 for 1974 and LIT 841687652 for 1975.

11. It should be emphasized that that decision did not allow for any assistance for 1973, and that the total assistance approved by that decision was less than that provided for in the decision of 27 December 1973 by LIT 274721810. The difference is to be explained by the fact that that sum was the amount stated by the applicant as its expenditure for 1973. It may be observed in this connection that in its application, the Board admits to having accepted that only LIT 134912640 out of a total of LIT 274721810 were eligible for assistance for 1973.

12. In response to the Italian Republic's request for a modification of the apportionment of the amount of assistance as between financial years, the Commission by decision of 18 May 1976 again reallocated the assistance agreed so as to provide LIT 385875145 for 1975 and LIT 455812507 for 1976.

13. For the years 1974, 1975 and 1976, a sum amounting to LIT 345763716 was refused on the ground that the activities performed did not comply with Community rules and in particular with the terms of the Commission's decision. In addition a sum of LIT 65149763 was not claimed. The final balance therefore represents a total sum of LIT 1040572303.

14. It should be recalled that the financing procedure of the European Social Fund is as follows. Requests for assistance are submitted by Member States to the Commission. If the Commission considers that the request falls within the objectives of the European Social Fund and that it should be given priority, the Commission addresses a decision to the Member State concerned after receiving the opinion of the European Social Fund Committee. That decision places the applicant Member State under a number of obligations. In particular that State undertakes to assume a financial burden equal to the amount requested from the Commission as a reimbursement for the cost of the project, to obtain all documents regarding the project and to verify their accuracy, to request payments on account from the European Social Fund as the operation progresses and the payment of the final balance, and to facilitate the checks made by the Commission to establish whether the activities completed or in course of completion comply with the relevant provisions.

15. It follows that this procedure creates a financial relationship between the Commission and the Member State on the one hand and between that Member State and the institution which is the recipient of the financial assistance on the other.

16. In order that, in such a situation, liability on the part of the Community towards the recipient institution may arise, it is not enough to state, as does the applicant, that it is entitled to a balance from the Commission on the ground that acts or conduct on the part of that institution — none of which is specified in the application or the reply — are invalid or illegal. For this purpose it is not sufficient merely to mention that the result of checks carried out by Commission officials did not show as many irregularities as were referred to in the Commission's decision. It was, on the other hand, incumbent on the applicant to adduce evidence capable in fact and in law of sustaining a causal link between the damage alleged by it and specific wrongful acts which may be imputed to the Community.

17. In default of such details the application cannot be granted.

18. Under Article 69 (2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs; as the applicant has been unsuccessful it must be ordered to pay the costs.

On those grounds, THE COURT (First Chamber) hereby:

1 Dismisses the application;

2 Orders the applicant to pay the costs.