Opinion of Mr Advocate General lENZ
Mr President,
Members of the Court,
Article 13 of Italian Law No 308 of 29 May 1982 provided for an appropriation of LIT 2000 million in 1982 and LIT 4000 million in 1983 for the purpose of subsidizing purchases of electric vehicles or vehicles equipped with both electric and diesel engines by municipal transport undertakings in cities with a population of more than 300000 for the purpose of replacing traditional vehicles. The grant was subject to the condition that the vehicles be produced in Italy.
The Commission, whose attention was drawn to that condition by the Unione nazionale rappresentanti autoveicoli esteri [National Union of Distributors of Foreign Motor Vehicles], considers that the condition is not compatible with the prohibition of quantitative restrictions on imports and all measures having equivalent effect contained in Article 30 of the EEC Treaty, and with the guidelines for the implementation of that provision contained in Commission Directive 70/50 of 22 December 1969 (Official Journal, English Special Edition 1970 (I), p. 17), particularly Article 2 (3) (k) thereof. It informed the Italian Government of that view in a letter dated 29 November 1982. It was pointed out in that letter that the rule attached to the aid was not necessary for the attainment of the object which the measure sought to achieve and that that was sufficient for it to be regarded as contrary to Article 30 of the EEC Treaty.
The Permanent Representation of Italy expressed its views on that letter in February 1983. It pointed out that the measure in question was valid only for a limited period (two years) and also referred to the objectives in regard to energy policy and research policy (domestic production to be influenced by promoting the purchase of prototypes of the vehicles in question) which the measures sought to achieve. It concluded that the measure could not genuinely be regarded as a restriction on imports.
As it found that reply unconvincing, the applicant delivered a reasoned opinion in August 1983 under Article 169 of the EEC Treaty. In that opinion, it explained why it regarded the provision it was criticizing as a form of aid which was not essential to attaining the object of the measure. If it was intended to be merely an inducement to buy energy-saving vehicles, the limitation of the measure to vehicles produced in Italy could not be regarded as logical. If it was also intended to encourage the development of the relevant Italian industry, however, it was evident that such development would have taken place even in the absence of the aforementioned condition because the fact that foreign vehicles of that type could be purchased with the help of grants from public funds would itself have spurred Italian manufacturers to carry out the development necessary to obtain a share of that market. Discrimination against foreign products in the context of those rules must therefore be regarded as a measure having equivalent effect to a quantitative restriction within the meaning of Article 30 of the EEC Treaty; the defendant was therefore called upon to bring the breach of the Treaty to an end within one month from the date of reception of the reasoned opinion.
As the Court will be aware, that did not happen. However, as the Court was informed, subsequent contacts between the applicant and the Italian authorities led to the latter giving an undertaking to abolish the condition to which the Commission objected, and thus a bill was laid before the Chamber of Deputies in March 1984 providing for grants for the years 1984 to 1986 which were not to be subject to the contested condition.
Since it appears that that bill has never been enacted into law, since the law of 29 May 1982 has not actually been amended (and it cannot be excluded that that law might still produce legal effects) and since the defendant has not altered its view that provisions such as the one of which the applicant complains are not in fact contrary to the Treaty, the applicant brought an action before this Court in April 1984.
The applicant claims that the Court should declare that, by requiring municipal public transport undertakings to purchase only vehicles produced in Italy in order to qualify for the financial aid provided for in Article 13 of Law No 308 of 29 May 1982, the defendant has failed to fulfil its obligations under Article 30 of the EEC Treaty.
My opinion on this case is as follows:
1. The first problem which must be considered is the defendant's contention that the Commission has no interest in bringing this action, which should therefore be declared inadmissible.
2. Let me now consider whether or not the claim is well founded. With regard to the question of whether the contested Italian rules are to be regarded as a measure having equivalent effect to a quantitative restriction within the meaning of Article 30 of the EEC Treaty, there is no doubt that subsidies granted from public funds for the purchase of particular goods, when they are subject to a condition that only domesticallyproduced goods may be acquired, constitute discrimination against similar goods coming from other Member States. Such a clear inducement would undoubtedly have the effect of directing demand towards domestic products rather than imported goods, thus reducing the flow of imports. It is also significant that, as the Court was told, the statement of reasons on which the bill covering the years 1984 to 1986 was based, and which no longer contains the nationality clause, states that a protectionist clause is no longer necessary. One is thus compelled to conclude that the Italian measure is covered by the formula which the Court has developed in interpreting Article 30 : that is, it constitutes trading rules enacted by a Member State which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade (Case 8/74 [1974] ECR 837, at p. 852).
3. There is thus nothing further of interest to this case to be deduced from the aforementioned Commission directive and in particular Article 2 (3) (k) thereof, according to which measures having equivalent effect to quantitative restrictions include those measures which hinder the purchase by private individuals of imported products only, or encourage, require or give preference to the purchase of domestic products only.
4. Before making a final judgment of the applicant's position, two objections put forward by the defendant must be considered.
5. It can be seen from the foregoing that the applicant's interpretation of the contested measure cannot be refuted and it is thus correct to speak of an infringement of Article 30. Although the defendant did not seek to justify the measure under Article 36, it can be shown fairly quickly that such a justification is not possible. The essential point is quite simply that, as was emphasized in the judgment in Case 238/82, Article 36 relates only to measures of a non-economic nature. The measure in question in this case is not of such a nature since, as the Court was expressly assured, Article 13 of Law No 308 is designed to attain objectives in the fields of energy policy and research policy, which cannot easily be excluded from the economic sphere.
I can thus only propose that the Court decide in favour of the applicant and declare that by requiring municipal transport undertakings to purchase domestically produced vehicles in order to qualify for the financial benefits provided for in Article 13 of Law No 308 of 29 May 1982, the defendant has failed to fulfil its obligations under Article 30 of the EEC Treaty. In acordance with the Commission's claim, the Italian Republic should also be ordered to pay the costs.
1 Translated from the German.
2 Judgment of 15 January 1986 in Case 52/84 Commission v Belgium [1986] ECR 89.
3 The amount of LIT 6000 million was sufficient, in 1982 and 1983, to acquire goods to the value of LIT 30000 million, that is to say, about 4.5 million ECU, on the basis of a subsidy of 20%.
4 Judgment of 11 July 1974 in Case 8/74 Procureur du Roi v Bernit and Gustave Dassonville [1974] ECR 837.
5 Judgment of 24 November 1982 in Case 249/81 Commission v Ireland [1982] ECR 4005.
6 Judgment of 11 December 1985 in Case 192/84 Commission v Hellenic Republic [1985] ECR 3967.
7 Judgment of M March 1985 in Case 269/83 Comminimi v Franci [1985] ECR 837.
8 Judgment of 22 March 1977 in Case 74/76 fornelli & Volpi SpA. v Ditta Paolo Aferom' [1977) ECR
9 Judgment of 22 March 1977 in Case 74/76 Iannelli & Volpi SpA. v Ditta Paolo Merom [1977] ECR 557.
10 Judgment of 7 February 1984 in Case 238/82 Dllpbar BV and Others w The Netherlands State [1984] ECR 523.