# C_2004262EN.01004601.xml

| 23.10.2004 | EN | Official Journal of the European Union | C 262/46 |
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23.10.2004

EN

Official Journal of the European Union

C 262/46

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Action brought on 27 July 2004 by the Federal Republic of Germany against the Commission of the European Communities

(Case T-314/04)

(2004/C 262/87)

Language of the Case: German

An action against the Commission of the European Communities was brought before the Court of First Instance of the European Communities on 27 July 2004 by the Federal Republic of Germany, represented by Claus-Dieter Quassowski and Christoph von Donat.

The applicant claims that the Court should:

| — | annul the Commission decision notified by letter of the Directorate-General for Regional Policy of 17 May 2004 in so far as the Community assistance from the European Regional Development Fund for the Objective 2 Programme 1997-1999 North Rhine-Westphalia (ERDF No 97.02.13.005/ARINCO No 97.DE.16.005) was reduced to EUR 319 046 236.76 and payment to the German authorities of the balance amounting to EUR 5 488 569.24 was refused; |
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annul the Commission decision notified by letter of the Directorate-General for Regional Policy of 17 May 2004 in so far as the Community assistance from the European Regional Development Fund for the Objective 2 Programme 1997-1999 North Rhine-Westphalia (ERDF No 97.02.13.005/ARINCO No 97.DE.16.005) was reduced to EUR 319 046 236.76 and payment to the German authorities of the balance amounting to EUR 5 488 569.24 was refused;

| — | order the Commission to pay the costs of the proceedings. |
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order the Commission to pay the costs of the proceedings.

Pleas in law and main arguments:

The applicant complains, pursuant to Article 230 EC, that secondary Community law and general principles of law have been infringed, that the Commission has erred in the exercise of its discretion and that there are mistakes in the contested decision's reasoning.

By the contested decision the Commission reduced the Community assistance from the structural fund (the European Regional Development Fund) for the Objective 2 Programme 1997-1999 North Rhine-Westphalia to EUR 319 046 236.76 and refused to pay to the German authorities the balance amounting to EUR 5 488 569.24. The background to the reduction is that, compared with the indicative financing plan, recourse to the programme was lower in the case of certain measures and higher in the case of others. The balancing out did not take place within the programme's respective priorities, but at the level of the programme as a whole.

The Commission is of the view that only a transfer between measures, and not a transfer between programme priorities, is possible, or that the latter would have required the Commission first to have taken a fresh decision. In its view, this also applies to expenditure under the approved programme that turns out higher and is not linked to an application for an increase in ERDF assistance.

The German Government considers the transfers to be objectively justified. It submits that the transfers, which are insignificant in amount, help to achieve the Community's assistance objectives. There are no grounds for a reduction. In particular, the reduction in the approved ERDF assistance cannot be justified on the basis that the competent authorities and agencies in the Land North Rhine-Westphalia administered in a flexible manner the indicative financing plan for the programme for Community structural interventions in the areas falling within Objective 2 in respect of the period from 1 January 1997 to 31 December 1999. In this regard, the reduction of the balance to be paid infringes Community law.

The German Government further submits that, by not allowing any flexibility at the level of priorities even where, at the end of a reference period, formal Commission approval can no longer be attained, the Commission inexpediently restricts the freedom of action of the Member State or the competent local authorities and agencies.

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