Opinion of Advocate General

Mr President,

Members of the Court,

In Cases 55/83 and 56/83 the Republic of Italy challenges part of two Commission decisions which refuse to recognize that certain sums paid by the Italian intervention board (AIMA) were chargeable to the European Agricultural Guidance and Guarantee Fund (EAGGF). The first case is concerned with Commission Decision No 83/37 (Official Journal 1983 L 38 p. 30) dated 14 January 1983 relating to 1976 ; the second with Commission Decision No 83/48 of the same date but relating to 1977 (Official Journal 1983 L 40 p. 55). In both cases payments relating to table wine are at stake and, since the same issues arise in both cases, it is convenient to deal with them in one opinion. Additionally, however, a question as to payments in respect of meat arises in Case 55/83 and in respect of cereals in Case 56/83.

Wine

Council Regulation No 816/70 of 28 April 1970 (Official Journal 1970 L 99 p. 1) provided that, if estimates of wine production for a given period exceeded the limits specified, private storage aid should be given but that, if this was unlikely to be effective in restoring price levels, measures for the distillation of wine might be adopted. The conditions laid down for such distillation must be such as to ensure that the balance of the market in ethyl alcohol is not adversely affected (Article 7).

Pursuant to these powers, Council Regulation No 567/76 (Official Journal 1976 L 67 p. 25) laid down rules for the distillation of wine to be carried out between 1 April and 31 July 1976 throughout the Community. A minimum buying-in price was fixed on the basis that the price for wines to be distilled should not act as an encouragement to the production of wines primarily for the purposes of distillation, but should nevertheless be sufficiently attractive for the operation to be effective. The amount of aid to be paid to the producer was also laid down, the balance of the price being paid by the distiller.

Because some producers who hesitated to avail themselves of the option created by that Regulation did not submit an application in time, provision was made for a second distillation to take place between 15 June and 30 September 1976.

Substantial amounts were paid out by AIMA in respect of wine which had been distilled. The first objection taken by the Commission as to why the accounts should not be accepted goes to all these amounts; the second and third objections relate only to certain of the contracts concerned. Other objections that the proceedings were inadmissible and that the sums in question were wrongly paid to the distillers rather than to the producers have been withdrawn by the Commission.

1. The first and overriding objection is that on 18 March 1976, three days after the adoption of Regulation No 567/76, a Decree law (No 46) was passed which raised the taxes on wine-based alcohol and on alcohol made from molasses in such a way as to make wine-based alcohol cheaper than molasses-based alcohol.

2. Secondly the Commission contends that Italy paid out aid with respect to contracts for distillation which were not completely executed. It relies on Article 6 (3) of Regulation 567/76 which provides as follows:

3. Lastly, the Commission claims and Italy accepts that in many cases Italy paid the aid in one sum rather than in two instalments as required by Article 2 of Regulation 567/76. That was clearly an infringement of the Regulation. However, it appears to be common ground between the parties that in certain cases payments were made in two instalments as required. Furthermore, payments made during the period covered by Regulation 1281/76 could lawfully be paid in one sum, since this was expressly permitted by Article 2 of that Regulation. Consequently, if the Court decides against the Commission on the first point, the Commission and Italy will have to go through the accounts together to establish what proportion of the aids are to be covered by EAGGF.

Meat

Article 1 of Council Regulation 1857/74 (Official Journal 1974 L 195 p. 17) reads as follows :

Article 4 provided that the Regulation was to enter into force on the third day following its publication in the Official Journal, which publication occurred on 18 July 1974.

Council Regulation 2930/74 (Official Journal 1974 L 311 p. 6) provided for the campaign to be extended to pigmeat and poultry meat. Article 1 stipulates that:

In Decision 83/37 the Commission found that EAGGF was not able to reimburse the expenses incurred by Italy in these publicity campaigns. It is clear from point 3.6.5 of the Commission's report on the clearance of accounts for 1976 and 1977 that the reason for this was that Italy had not met the deadline of 20 July 1975.

Italy contests this. By 20 July 1975 it had taken all the preparatory measures for the campaigns to be carried out, but had done no more. It now claims that the requirement to promote the campaigns was fulfilled once the preparatory measures had been taken.

Italy's argument would lead to the result that the publicity campaigns could be carried out at any time, provided that the preparatory measures had been taken prior to 20 July 1975. This, to my mind, conflicts with the preambles to the two Regulations, in particular to Regulation 1857/74, where it is clear that the object of the campaigns was to overcome difficulties in the immediate short-term arising from particularly low prices.

Secondly, the second recital in the preamble to Regulation 2930/74 stipulates that the campaigns envisaged by that Regulation were to finish on the same date as that laid down for beef and veal. There can be no doubt that that date was 20 July 1975.

Thirdly, Article 3 (2) of Regulation 1857/74 states that when six months have elapsed from the entry into force of the Regulation, the results of the measures herein provided for shall be reviewed.... Article 3 (2) of the second Regulation contains a provision to similar effect. Even though the relevant periods would not have ended in either case, it seems to me that these provisions contemplated that the measures would have been implemented since it is the results which are to be reviewed.

In my opinion this part of Italy's case must therefore be dismissed.

Cereals

Council Regulation 2255/77 (Official Journal 1977 L 261 p. 4) provided that 200000 tonnes of common wheat of breadmaking quality held by the German intervention agency was to be sold to the Italian intervention agency, AIMA. Detailed rules for this sale were laid down by Commission Regulation 2452/77 (Official Journal 1977 L 285 p. 121).

According to the Community Regulations applicable, the purchase price would normally have been paid directly by AIMA to the German intervention agency. However, Regulation 2255/77 derogated from that system: EAGGF was to act as intermediary, advancing the sum in question to the German intervention agency and being reimbursed by AIMA at the end of 1977. Furthermore, at the same time the Commission made a declaration noted in the minutes of the Council to the effect that Italy could credit the money due to EAGGF at an earlier date, namely 1 December 1977.

Italy claims to have exercised this option and paid the moneys on 1 December 1977. In Case 56/83 it therefore impugns Commission Decision 83/48 for failing to take account of this. The Commission on the other hand claims that no such payment or credit was made on this date.

Consequently, the dispute between the parties in the end seems to boil down to this — was the payment in question actually made or credited on 1 December 1977 or not?

It is common ground between the parties that no documentary evidence exists to show that it was made at that date. Italy contends that this in no way undermines its positions because it is or was not the practice to evidence such payments by any documents. The Commission denies this and says that such payments are always evidenced in writing, as clearly they ought to be. It seems to me that the Commission is right here in saying that there is no evidence that Italy exercised the option to make the credit on 1 December 1977 and I would reject this part of the claim.

In the result it is my opinion that both Applications should be dismissed and that the Republic of Italy should pay the Commission's costs in both cases.