Opinion of Mr Advocate

Mr President,

Members of the Court,

1. Court proceedings are a kind of barometer. It is interesting to observe the prevalence of particular subjects in any given period.

I — Application of Article 92 (1) of the Treaty

2. In order to discuss the statement of reasons in relation to Article 92 (1) it is necessary first of all to consider the question of principle raised by the Commission's contention that regional aid is fundamentally incompatible with the common market. According to the Commission the Member States recognized in 1971 that regional aid was as a matter of principle incompatible with the common market. It refers to the general nature of regional aid schemes and contends that it is neither necessary nor even possible to make legal assessments on the basis of specific circumstances.

3. Let us dismiss straight away the contention that regional aid is per se contrary to the rules of the common market. There is no trace of such incompatibility either in the Treaty or in secondary legislation. On the contrary, the machinery set up by Articles 92 to 94 leaves it to the Council or the Commission, subject of course to review by the Court, to determine whether any aid or class of aid is compatible with the Treaty according to the criteria laid down in those provisions.

4. The fact remains that the Treaty gives the Commission a wide discretion, reflected in the statement of reasons, the requirements to be satisfied by which

5. In the present case the Commission decided to initiate the review stage referred to in Article 93 (2), which entails giving notice to the parties concerned to submit their comments.

II — Application of Article 92 (3).

6. The main issue relates to the scope and implementation of Article 92 (3).

7. Without it being necessary to establish a strict order of precedence among those rules it may be observed that they are all to be found in the third part of the Treaty, relating to the Policy of the Community. Title I contains its common rules, that is to say guiding principles. Article 104 is to be found in Title II concerned with the Economic policy of the Community; the provisions of that title can thus be interpreted only by reference to the general principles previously set out. It is true that Article 104 states that each Member State is to pursue the economic policy needed to ensure the equilibrium of its overall balance of payments and to maintain confidence in its currency, while taking care to ensure a high level of employment and a stable level of prices, but it is immediately followed by provisions requiring the Member States to coordinate their economic policies and to provide for cooperation to that end, and the Commission and Council are entitled to make recommendations for the achievement of such cooperation (Article 105). In addition, Article 104, which is contained in Chapter 2, on the balance of payments, cannot have the scope claimed for it by the applicant so as to deprive the Commission in the present case of any power, in applying Article 92 (3), to fix indicators and threshold values in order to determine regions eligible for aid.

8. Having regard to those principles, we must now determine the rules for their application in the successive stages of the Commission's decision and review by the Court.

9. In the light of those criteria, what is to be thought of the statement of reasons for the refusal to apply the exemption provided for in Article 92 (3) (a)?

10. The issue of Article 92 (3) (c) is more complex.

11. Let us now consider its application to the labour market regions of Borken-Bocholt and Siegen.

III — Other submissions

12. The last two submissions, manifest error of assessment and misuse of powers, remain to be considered.

My opinion is therefore that the Commission decision of 23 July 1984 should be declared void in so far as it declares the aid proposed which the Land North Rhine-Westphalia proposes to grant to undertakings in the labour market region of Borken-Bocholt, in the circumstances set out in Article 1 of the contested decision, to be incompatible with the common market within the meaning of Article 92 of the EEC Treaty. I propose that the remainder of the claim by the Federal Republic of Germany should be dismissed and that the parties should bear their own costs.

1 Translated from the French.

2 First Resolution of 20 October 1971 of the Representatives of the Governments of the Member States, meeting within the Council, on general systems of regional aid (Official Journal, English Special Edition (II), No IX, p. 57) following a Communication of 23 June 1971 from the Commission to the Council in relation to such systems (Journal Officiel, C 111 of 4.11.1971, p. 7).

3 Judgment of 22 March 1977 in Case 78/76 Slehilte and Weinlig v Federal Republic of Germany [1977] ECR 595, paragraph 8 at p. 609.

4 Judgment of 14 November 1984 in Case 323/82 Intennilli v Commission [1984] ECR 3809.

5 Judgment of 13 March 1985 in Joined Cases 296 and 318/82 Kingdom of the Netherlands and Leeuwarder Papierwarenfabriek v Commission [1985] ECR 809, paragraph 19.

6 See footnote 1 above and, for the Communication of 21 December 1978, Official Journal, C 31 of 3.2.1979.

7 Point 8 of Annex A to the aforementioned First Resolution of 20 October 1971; sec also point 10 of the 1978 Commission Communication.

8 Judgment of 17 September 1980 in Case 730/79 Philip Morris v Commission [1980] ECR 2671, at p. 2688, paragraph 11.

9 Case 84/82 Federal Republic of Germany v Commission [1984] ECR Holmat p. 1488, in particular paragraphs 11 to 13.

10 Resolution of the Bundestag of the Federal Republic of Germany of 11 March 1982, referred to in the reply.

11 Resolution of the German Planning Committee for Regional Economic Structures of 16 March 1983, cited in its reply by the applicant (p. 7).

12 Judgment of 9 June 1982 in Case 95/81 Commission v Italian Republic [1982] ECR 2187, at paragraph 16.

13 Case 730/79 Philip Morris v Commission [1980] ECR 2671, at p. 2702.

14 Judgment of 10 July 1986 in Case 40/85 Kingdom of Belgium v Commission [1986] ECR 2263, at p. 2321, paragraph 21.

15 Annex to the letter dated 6 November 1981 from the Commission to the government of the Federal Republic of Germany.