Opinion of Advocate General
Mr President,
Members of the Court,
1. In this application, the French Republic is asking the Court to annul, pursuant to the first paragraph of Article 173 of the EEC Treaty, an act entitled Commission communication to the Member States — Application of Articles 92 and 93 of the EEC Treaty and of Article 5 of Commission Directive 80/723/EEC to public undertakings in the manufacturing sector (hereinafter the communication).
2. That communication, which was notified to the Member States by letter dated 8 November 1991, is in two parts. The first part (points 1 to 44) sets out the Commission's interpretation of the Court's case-law on public undertakings and the manner in which the Commission intends to apply the rules on State aid to the following public intervention: injections of capital, guarantees and returns on invested capital.
3. Whilst I would refer to the Report for the Hearing for a detailed description of the legislative background to this dispute, I would point out that, according to its preamble, the essential aim of the transparency directive, which was adopted pursuant to Article 90(3), is to foster the effective application as regards public undertakings of Articles 92 and 93 of the Treaty on State aid. Transparency is ensured by the fact that the Member States are under a duty to ensure that assignments of funds to public undertakings, whether effected directly by the public authorities or through other public undertakings or through financial institutions, and the use to which those funds are actually put emerge (Article 1). The financial relations which are to be made transparent concern, inter alia, 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 compensation for financial burdens imposed by the public authorities (Article 3).
4. The dispute in question arose in relation to those provisions. The French Government considers that, unlike that which is provided in Article 5(2) of the transparency directive, the communication entails a systematic, generalized obligation on the Member States and the public undertakings concerned to provide the Commission with data on the financial relations in question, some of which at least are additional to those already provided for by the transparency directive.
5. As we know, the first paragraph of Article 173 empowers the Court to review the legality only of acts other than recommendations or opinions, that is to say, only of binding acts. Consequently, an act described as a communication should, as an act which is, ex hypotbesi, not binding, not be open to challenge before the Court.
6. In the instant case, the Court is faced with an act described as a communication, which does not indicate any legal basis and does not bear the signature of any member of the Commission, but which was adopted by the Commission as a body, was published in the C Series of the Official Journal and had as its addressees all the Member States, to which it was moreover notified by a letter from the competent member of the Commission.
7. The act at issue is concerned with the application of Articles 92 and 93 of the Treaty as well as with Article 5 of the transparency directive: the very title of the act reads as such, the Commission and the French Government have maintained that this is the case consistently and repeatedly both in their written observations and at the hearing, and, as will become clear, examination of the content of the act confirms this. That examination, however, will be confined to that part of the communication relating to the application of Article 5, since the French Government's criticisms allege only that the obligations arising under that provision for the Member States and indirectly for the public undertakings concerned have been altered.
8. I would start by stating that it goes without saying that the Commission is entitled to ask for information which is supplementary or, at any event, not specified in the transparency directive in connection with an individual case and can do so not only the basis of Article 5(2) of the transparency directive but also on the basis of various other Treaty provisions (such as Article 5, 93 or even 155). For present purposes, however, it must be determined whether, as the French Government maintains, the communication introduced a systematic, generalized reporting obligation and whether the obligation to provide periodical (annual) reports including a series of supplementary data (over and above those covered by the transparency directive) goes beyond the provisions of Article 5(2). From this point of view, it is necessary to establish first of all whether the provision in question may be interpreted as empowering the Commission systematically to request data regarding the financial relations covered by the communication for all undertakings in a particular sector whose turnover exceeds a given figure.
9. Although it does not deny that the obligations laid down by the communication are binding on the Member States, the Commission denies that the communication is of a regulatory nature, arguing instead that it constitutes simply a practical application of Article 5(2) to a specific case, namely that of manufacturing undertakings with a turnover exceeding ECU 250 million. In this connection, the Commission argues that it is particularly significant that, as far as France is concerned, only 14 undertakings are concerned by the communication and that the list of those undertakings, which the competent French authorities sent to the Commission even before the communication was notified, constitutes a negotiated act in as much as it was drawn up by mutual agreement by the Commission and the French authorities.
10. In the light of the foregoing, it needs to be established whether the communication in question embodies, as the Commission maintains, a complex act made up of a cluster of individual acts specifically concerning each of the Member States and each of the undertakings or groups of undertakings concerned or else, as the French Government argues, an act of general scope.
11. In the final analysis, I cannot accept the Commission's argument to the effect that the communication constitutes a mere measure applying and implementing the obligations set out in Article 5. Instead, it is a measure of general, abstract scope introducing a systematic obligation to report in relation to all the undertakings falling within its scope, undertakings which are identified on the basis of objective criteria.
12. In addition, as I have already mentioned, the communication requires a series of data to be provided which were not provided for — or at least not expressly — by the transparency directive. I refer primarily to the communication's inclusion within the field of application of Article 5 of capital movements within a given undertaking or group of undertakings.
13. The Commission argues, however, that the inclusion of the data in question answers the need of applying Article 5 consistently with the evolution of economic life and, above all, of the relevant case-law of the Court, which, in recent years, has shown that transactions carried out within a given group may also constitute aid within the meaning of Articles 92 and 93 of the Treaty, with the result that the Commission is empowered to interpret and apply Article 5 differently from the accepted way of interpreting it in the past.
14. Lastly, the communication at issue introduces the obligation to report a series of detailed data which cannot in every case be inferred from the wording and rationale of the relevant provisions of the transparency directive. I refer in particular to the obligation to report a number of accounting data, which in fact the undertakings in question are already bound to publish under the Fourth Council Directive 78/660/EEC of 25 July 1978 on the annual accounts of certain types of companies. However, I cannot agree with the Commission's argument that the communication of a number of data covered by the directive on annual accounts could not, in any event, entail new obligations for the Member States and the undertakings inasmuch as the undertakings already have to fulfil those accounting obligations by virtue of that directive. In the first place, as the French Government has correctly pointed out, the directive on annual accounts requires undertakings to publish their annual accounts, including a number of specific accounts data, but does not require them to create two separate, parallel accounting lines, of which one is to cover, for instance, loans and guarantees given by public undertakings (for example, public financial agencies) and the other similar transactions effected by private undertakings (for example, private banks). It is only too obvious that this would involve a supplementary burden on the undertakings: it is sufficient to mention that a single financial transaction may involve both private and public operators.
15. It follows from the foregoing that, in so far as it imposes on the Member States, and indirectly on the public undertakings concerned, a systematic, generalized obligation to provide a series of detailed data, the communication goes beyond the provisions of Article 5(2) of the transparency directive. As a result, the communication in question constitutes an act intended to have legal effects distinct from those of Article 5(2) and hence is a challengeable act.
16. Having established that, I would note that the French Government claims that the act should be annulled in so far as (a) it infringes Article 190 and the principle of legal certainty and (b) it exceeds the discretion conferred on the Commission by Article 90(3) of the Treaty in view of the lack of necessity, the imposition of disproportionate constraints and discrimination between public and private undertakings.
17. More specifically, the need to broaden the scope of Article 5(2) is amply reasoned in the communication, where it is stated that further specification of the obligations set out in the transparency directive has become necessary as a result of the evolution of economic life and of the relevant case-law.
18. Consequently, the only remaining question is whether the contested communication infringes Article 190 of the Treaty and the principle of legal certainty. The French Government argues that, in so far as it imposes new obligations, the communication should have been given a specific legal basis; it claims that that omission further aggravates the uncertainty as regards the actual nature of the new obligations laid down by the communication.
19. In that connection, I would first observe that the aforementioned case-law on legal bases was elaborated with regard to cases in which the binding effect of the contested act was not in issue, merely the fact that the only indication of any legal basis was a general reference to the Treaty; it was therefore necessary only to establish what consequences had to be attached to failure to specify the Treaty provision underlying the act in question.
20. In this connection, I would venture to recall that in my Opinion on the internal instructions case, to which I have already referred, I suggested that the Court should deal expressly with a preliminary issue: whether, in the absence of a minimum of essential formal requirements and hence regardless of the fact that, on completion of an examination of the specific content of the measure, a claim is found to the effect that it has legal effects, it may be considered that the measure itself is capable of having legal effects. Although the Court did not expressly rule on that question, it confirmed indirectly that the formal criterion is completely irrelevant and that, therefore, it is necessary to categorize the act on the basis only of its content. However, in my view, the decision thus taken by the Court for the purposes of establishing the admissibility of the relevant application cannot yet be interpreted as meaning that any formal defects in the act are invariably and in any event irrelevant for the purposes of assessing the validity of the act itself. Moreover, such a conclusion would be at odds with the very rationale underlying the case-law in question: strengthening the judicial protection of individuals and, in so doing, legal certainty.
21. A communication intended to have legal effects and capable in the abstract of having such effects inasmuch as it emanates from an institution competent to adopt binding acts in the sector in question is bound to give rise to confusion and uncertainties amongst its addressees, be they Member States or individuals, as to whether the conduct contemplated by it is obligatory. Manifestly, this is detrimental, not only to individuals, but also to the administration.
22. In the final analysis, I do not consider that I can agree with the argument put forward by the Commission to the effect that the choice of the legal basis and the form have particular importance only as regards acts whose adoption depends on an ad hoc procedure or involves a particular institution having competence, which is not the case here, since the exclusive competence of the Commission is uncontested.
23. In the light of the foregoing, I therefore propose that the Court should uphold the application and order the Commission to pay the costs.
1 Original language: Italian.
2 OJ 1991 C 273, p. 2.
3 Council Directive 80/723/EEC of 25 June 1980 on the transparency of the financial relationship between public undertakings and the State, OJ 1980 L 195, p. 35.
4 Case 22/70 Commission v Conimi [1971] ECR 263, paragraphs 38 to 43.
5 Case C-366/88 France v Commission [1990] ECR I-3571, paragraph 8.
6 Case C-303/90 France v Commission [1991] ECR I-5315, paragraph 8.
7 Case C-303/90 Commission v France, cited in footnote 5, paragraph 34.
8 See, for example, the judgment in Case 177/86 UFADE v Commission and Council [1986] ECR 3255, paragraph 11.
9 Sec, for example, the judgment in Case C-303/88 ENI v Lanerossi [1991] ECR I-1433, paragraphs 11, 12 and 13.
10 OJ 1978 L 222, p. 11.
11 Joined Cases 188/80 to 190/80 France, Italy and United Kingdom v Commission [1982] ECR 2545.
12 Case 45/86 Commission v Coimai [1987] ECR 1493, paragraphs 5 and 9.
13 Council Directive 85/413/EEC of 24 July 1985 amending Directive 80/723/EEC on the transparency of the financial relationship between public undertakings and the State, OJ 1985 L 229, p. 20.
14 I considered that it was necessary to answer that question because, whilst it is quite true that the choice of form cannot alter the nature of the act, it is equally true that the absence of some formal requirements, in particular those which enable an act to be identified as binding, would mean that, even where an examination of its content revealed that it was intended to have legal effects, it would in any case be unable to be relied upon against third parties. Essentially, therefore, these would be acts in any event without legal effects vis-à-vis individuals and Member States, irrespective as to whether the Commission was or was not empowered to adopt binding acts in the sector in question.
15 Case 310/85 Denfil v Commission [1987] ECR 901, paragraph 22. In that case, in ruling on the scope of a Commission communication on aid to the textile sector, the Court held that the communication contained guidelines setting out the course of conduct which the Commission intends to follow and with which it asks the Member States to comply ....
16 Sec, among many other judgments, Case 70/83 Kloppenberg [1984] ECR 1075, paragraph 11, Case 325/85 Ireland v Commission [1987] ECR 5041, paragraph 18, Case 326/85 Netherlands v Commission [1987] ECR 5091, paragraph 24, Case 332/85 Germany v Commission [1987] ECR 5143, paragraph 23, Case 336/85 France v Commission [1987] ECR 5173, paragraph 17 and Case 348/85 Denmark v Commission [1987] ECR 5225, paragraph 19.
17 Joined Cases 205/86 to 215/86 Deutsche Milchkontor [1983] ECR 2633, paragraph 30.
18 Case 322/88 Grimaldi [1989] ECR 4407, paragraph 13.
19 The principle laid down by the Court to the effect that [t] he uniform application of Community law is only guaranteed if it is the subject of formal measures taken in the context of the Treaty (Case 74/69 Hauptzlloamt Bremen v Krohn [1970] ECR 451, paragraph 9) is not without relevance here. Moreover, it seems uncontestable to me that that principle may and must be applied whenever the Treaty provides for the adoption of typical acts in the sector in question.