Judgment — ECLI:EU:T:2009:381
Date: 2009-10-02
Language of the case: Estonian
Court formation: First Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Accession;Agriculture and Fisheries
Concepts: Primary law and secondary legislation;Objectives of the common agricultural policy;Act of Accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia;Measures of inquiry and measures of organisation of procedure;Commission;General principles
Procedure: Action for annulment - unfounded;Action for annulment - inadmissible
Origin: Estonia

summary of the pleas in law on which it is based. It must accordingly specify the nature of the grounds on which the action is based, which means that a mere abstract statement of the grounds does not satisfy the requirements of the Statute of the Court of Justice or the Rules of Procedure (Case T‑102/92 VIHO v Commission [1995] ECR II‑17, paragraph 68, and the judgment of 10 September 2008 in Case T‑181/06 Italy v Commission, not published in the ECR, paragraph 139). 292 In the light of those considerations, it must be found that the arguments relied upon by the Republic of Latvia in support of its claim are too vague to be examined. It is impossible to determine, on the basis of those arguments, the way in which, according to the Republic of Latvia, the Commission should have taken account of the economic development of the new Member States in order to modify its calculation of the surpluses on the basis of supposedly higher consumption. 293 Furthermore, most of the arguments of the Republic of Latvia relate, in essence, to its own economic development. Even assuming them to be well founded, they have no bearing on the question whether, when calculating the surplus attributable to the Republic of Estonia, the Commission paid sufficient regard to the circumstances in which stocks were built up on Estonia’s territory. 294 In view of the foregoing, it must be found that the complaint of the Republic of Latvia must be rejected, as must the present plea in its entirety. IV – The third plea: breach of the obligation to state reasons A – Arguments of the parties 295 The Republic of Estonia argues that, in the contested regulation, the Commission failed to explain why household reserves were included in the surplus in question, which is all the more serious in the light of the circumstances of the case. 296 In that regard, first, it claims that, when a measure relates to a specific case, the requirement to state reasons is stricter (Joined Cases 292/81 and 293/81 Lion and Others v FIRS [1982] ECR 3887, paragraph 18 et seq., and Joined Cases 311/81 and 30/82 Klöckner-Werke v Commission [1983] ECR 1549, paragraph 30 et seq.). It maintains that the contested regulation concerns only five new Member States and relates to a unique situation that is unlikely to recur, namely the transition from the regime in force in those States to the CMO in sugar. In its opinion, where the number of persons is determinate and there is no possibility of its application in the future, a regulation constitutes rather a bundle of decisions. 297 Secondly, the Republic of Estonia argues that a decision must be justified in detail, particularly if it produces serious and important effects. As the sum to be paid by the Republic of Estonia – if it does not eliminate its surpluses – is EUR 45.7 million, equal to 1.35% of its budget, the Commission was under a greater obligation to state reasons. 298 Thirdly, the Republic of Estonia states that, by comparison with previous accessions, the Commission changed its practice regarding the calculation of the surpluses and that it introduced a method that is atypical in the context of the common agricultural policy, where a detailed statement of reasons is also required to explain a change in practice. 299 Fourthly and lastly, the Republic of Estonia claims that the contested regulation contains no explanation of the manner in which the specific circumstances referred to in Article 6(1)(c) of Regulation No 60/2004 were taken into account, apart from an incontrovertible indication in the third recital in the preamble. In its view, that would prevent any review of the lawfulness of the contested regulation, whereas the level of justification required in this situation is higher, since Article 6(1)(c) of Regulation No 60/2004 allows the Commission wide discretion. 300 In that regard, the Republic of Estonia states that it was not notified of the reasons for which household reserves were included in the calculation of the surpluses in question, even in the Sugar Management Committee or at the meeting of 19 May 2005, and calls on the Commission to forward to the Court the documents presented at that meeting. 301 The Commission disputes the arguments of the Republic of Estonia. B – Findings of the Court 302 It should be noted that the contested regulation is not the legislative measure which provided that household reserves were to be taken into account for the purpose of the surpluses. 303 In fact, the only legislative measure which provided that they were to be taken into account is Regulation No 60/2004. That regulation instituted a system for calculating surpluses that is very different from those established under Regulations Nos 579/86 and 3300/94 for the accessions of 1986 and 1995, which had been based in particular on the organisation of a survey by the national authorities of quantities of more than 3 tonnes existing within their territory in order to compare them with a quantity set by the Commission as the normal carryover stock and thus eliminate any surplus (see paragraphs 195 and 196 above). 304 It should be observed in that regard that the seventh recital in the preamble to Regulation No 60/2004 states clearly that determination of the surplus stocks should be carried out by the Commission on the basis of trade developments and production and consumption trends in the new Member States during the period of 1 May 2000 to 30 April 2004. The ninth recital of that regulation indicates that, for the determination of surplus stocks, new Member States should provide the Commission with the most recent statistics on trade, production and consumption of the products considered (see paragraph 197 above). 305 Article 6 of Regulation No 60/2004 thus provides that, in order to determine the surpluses, account is in particular to be taken of the development during the year preceding accession, as compared with the previous years, of imported and exported quantities of sugar, as such or in processed products, isoglucose and fructose; production, consumption and stocks of sugar and isoglucose; and, lastly, the circumstances in which stocks were built up. 306 It is therefore evident that, as was explained above, the method laid down in Regulation No 60/2004 for determining the surpluses hinges on the observation of macroeconomic trends, and not on that of the quantities actually stockpiled in a particular Member State. That regulation also includes a final flexibility clause permitting the outcome of the investigation to be amended in the light of specific circumstances that justify the exclusion of certain quantities of sugar where they do not threaten to disrupt the mechanisms of the CMO in sugar, as is apparent from the interpretation of Article 6(1)(c) of Regulation No 60/2004 given in paragraphs 245 to 248 above. In Annex 1 to the communication from Mrs Fischer Boel, the Commission itself states that the purpose of that annex is to lay down methods for determining the surpluses of the new Member States at the macroeconomic level, as required by Article 6 of Regulation No 60/2004, which contains no provision excluding trivial amounts from the calculation of the surpluses. 307 The third recital in the preamble to the contested regulation mentions the macroeconomic variables which in practice the Commission took into account when calculating the surpluses. Thus it explains that, in general, the Commission considers that surplus quantities of sugar are the result of an increase in production, plus imports and minus exports, for the period from 1 May 2003 to 30 April 2004, as compared with the average of the same quantities for the same period of the three previous years. 308 It is also self-evident that such a method for determining the surpluses necessarily means taking into account household reserves in the same way as those built up by operators. In the case of the Republic of Estonia, a non-sugar-producing State, the surplus calculated for the 2003/2004 marketing year must necessarily be the result of the difference between the imports made during that year and the average of the imports made during the three previous years, less the difference between exports during that year and the average of exports during the three previous years. Such a method, which as a matter of principle aims to take account only of imports and exports, does not make it possible to exclude household reserves from the quantity so obtained, unless it is considered that the existence of such reserves is one of the circumstances in which the stocks were built up, for the purposes of Article 6(1)(c) of Regulation No 60/2004. 309 The fact that this method was in fact applied is apparent not only from the recitals in the preamble to the contested regulation but also, and very clearly, from the documents submitted on a number of occasions to the Republic of Estonia in the Sugar Management Committee and, lastly, at the meeting of the group of experts on 19 May 2005; these documents were produced before the adoption of the regulation in question and were known to the Republic of Estonia. 310 Accordingly, it must be found, first, that the contested regulation contains an adequate statement of reasons as to why household reserves were not excluded from the calculation of the Estonian surplus and, secondly, that the statement of reasons in that regulation did not necessarily have to contain the reasons why the Commission had departed from the practice adopted at the time of previous accessions, since such a change is a logical and necessary consequence of Regulation No 60/2004, the lawfulness of which has not been questioned by the Republic of Estonia in the present action. V – The fourth plea: breach of the principle of sound administration A – Arguments of the parties 311 The Republic of Estonia claims that the Commission breached the principle of sound administration by adopting the contested regulation, which consists of a bundle of five decisions relating to the new Member States concerned, since it was required to prepare its decision carefully and impartially. According to the Republic of Estonia, the Commission failed to take into account the specific circumstances of the situation in Estonia, of which it had been informed. Mrs Fischer Boel took that decision, it claims, on the basis of considerations that had nothing to do with the case, thus committing a misuse of powers. The Republic of Estonia claims that Mrs Fischer Boel tried, on the one hand, to avert the risk that other new Member States would challenge the basis of calculation for other products or would rely on specific circumstances and, on the other, to avoid creating precedents for future accessions. 312 Moreover, according to the Republic of Estonia, the Commission should have assessed the impact of its conduct on the situation created, in particular since it had stated that it would use the same method of calculation as at the time of previous accessions. 313 Lastly, in accordance with the principle of sound administration, the College should, in the opinion of the Republic of Estonia, acquaint itself with the essential facts before reaching any decision. By contrast, it ruled on the inclusion of household reserves in the Estonian surplus even though the final version of Mrs Fischer Boel’s communication did not contain the arguments of the Republic of Estonia regarding, among other things, the serious consequences of that decision on its budget; or Mrs Fischer Boel’s considerations in the matter; or the actual figures; or a comparison with the Republic of Malta and the Republic of Cyprus. 314 The Commission contends that this plea should be rejected. B – Findings of the Court 315 It should be observed that, by means of this plea, while relying on the principle of sound administration, the Republic of Estonia first essentially repeats the reasons why it considers that the Commission infringed Article 6(1)(c) of Regulation No 60/2004 by adopting the contested regulation without taking into account the specific circumstances of its situation. Those arguments have been examined and rejected in connection with the second part of the second plea. Secondly, the Republic of Estonia repeats the reasons why it considers that the principle of collegiality was breached in the present case. These arguments have been examined and rejected in connection with the first plea. 316 The present plea must therefore be rejected in its entirety. VI – The fifth plea; breach of the duty to act in good faith A – Arguments of the parties 317 The Republic of Estonia claims that the duty to act in good faith prohibits the signatories to an international agreement from adopting measures that would vitiate the objective and purpose of that agreement. Accordingly, after the signature of the Act of Accession, the Commission should have abstained from any measure likely to encourage any disruption of the market or speculation. The Republic of Estonia claims that the Commission failed to take measures against the increase in Community exports and prevented the Republic of Estonia from doing so. In its opinion, this was all the more serious in that the Commission had indicated that it would take into account the effects on stocks caused by the liberalisation of trade between the candidate States and the European Union and that it would apply the same principles as at the time of previous accessions. 318 The Commission disputes the arguments of the Republic of Estonia. B – Findings of the Court 319 By the present plea, the Republic of Estonia essentially puts forward the same arguments as those adduced in connection with its second and fourth pleas. These arguments must therefore be rejected for the same reasons as those pleas. VII – The sixth plea: breach of the principle of non-discrimination 320 The Republic of Estonia claims that the contested regulation breaches the principle of non-discrimination in three ways, which must be examined separately. A – Discrimination by comparison with the Republic of Malta and the Republic of Cyprus 1. Arguments of the parties 321 The Republic of Estonia considers that it was treated in a discriminatory manner by comparison with the Republic of Malta and the Republic of Cyprus, as these two new Member States were treated in the same way as the Republic of Estonia, whereas half of the Estonian surplus consisted of household reserves while the Maltese and Cypriot surpluses were held only by operators. That discrimination also emerges clearly, according to the Republic of Estonia, from Annex 18 and is all the more serious in that specific circumstances were in fact taken into account for the Republic of Malta, as demonstrated by the change in the calculation of the Maltese surplus between the draft regulation (13 210 tonnes) and the contested regulation (2 452 tonnes). 322 The Commission disputes the arguments of the Republic of Estonia. 2. Findings of the Court 323 In essence, the Republic of Estonia maintains that the Estonian surplus was calculated in the same way as the Cypriot and Maltese surpluses, whereas specific circumstances relating to its situation should have led the Commission to treat it differently. However, the reasons for which the Republic of Estonia considers it should benefit from such treatment do not support its claim. 324 Those reasons are, in essence, those relied upon to claim that the Commission should have taken account of the special role of sugar consumption in the Republic of Estonia, which were set out in connection with the second part of the second plea. As the Court has ruled that those reasons could not lead the Commission to exclude the household reserves of the Republic of Estonia from the calculation of its surplus, as was stated in paragraphs 252 to 260 above, it cannot be considered that, by not taking those reasons into account, the Commission treated the Republic of Estonia in a discriminatory way. 325 Furthermore, in so far as the argument of the Republic of Estonia may be construed as meaning that the Commission reduced the Maltese surplus by taking into account a specific circumstance relating to the situation in Malta whereas it did not do the same in the case of the Republic of Estonia, it must be observed that the existence of such a specific condition, which is not mentioned in the contested regulation, cannot affect the lawfulness of the calculation of the Estonian surplus or prove discrimination against the Republic of Estonia. 326 The Republic of Estonia does not indicate whether the reduction to which the Republic of Malta was entitled should have been granted to it as well because its situation and that of the Republic of Malta, which enabled the latter to obtain the reduction in question, stem from the same specific circumstance. 327 Moreover, if the argument of the Republic of Estonia were to be construed as meaning that the total surplus of the Republic of Malta was wrongly reduced, it would have to be stated that that error on the part of the Commission, even if proven, cannot call into question the validity of the contested regulation in relation to the Republic of Estonia. That Member State cannot seek to have a method of calculating its surplus applied that is different from the method applicable to it and, at any event, the error committed can affect the validity of the contested regulation only in so far as it concerns the Republic of Malta (see, to that effect, Case C‑340/98 Italy v Council [2002] ECR I‑2663, paragraphs 90 and 91). 328 It must therefore be found that the Republic of Estonia has failed to show that, by adopting the contested regulation, the Commission treated it in a discriminatory way by comparison with the Republic of Malta and the Republic of Cyprus. B – Discrimination as compared with certain Member States which had previously joined the Community 1. Arguments of the parties 329 The Republic of Estonia argues that it was treated in a discriminatory way by comparison with the Member States which had previously joined the Community and later, the European Union, because in identical situations of fact and law their household reserves were not taken into account for the purposes of determining their surpluses. The Commission disputes that assertion. 2. Findings of the Court 330 It should be observed that the transitional measures to be adopted regarding agricultural matters at the time of each enlargement must be adapted to the actual risk of disruption of the agricultural markets that that enlargement may cause. Accordingly, the institutions are not required to apply identical transitional measures in connection with two successive enlargements. 331 In particular, the Commission was entitled to take into account, among the differences between the enlargements of 1995 and 2004, the fact that the objective of preventing disruption of the Community market in sugar owing to the build-up of surpluses was more difficult to achieve in 2004 because of the much larger size of the markets of the new Member States and their very much greater production capacity, as well as the fact that some new Member States, such as the Republic of Estonia, levied no import duty on sugar, which could simply be purchased on the world market; the Commission alludes to these facts in its statements without being challenged by the Republic of Estonia. In addition, the price differences between the Community and the new Member States were also larger. The combination of these two factors greatly increased the risk of destabilisation of the sugar market and consequently justified the adoption of stricter transitional measures. 332 It must therefore be found that the Republic of Estonia has failed to prove that the Commission treated it in a discriminatory way by comparison with the Member States which joined the Community and, later, the European Union, at the time of previous accessions. C – Discrimination as compared with all the old Member States 1. Arguments of the parties 333 The Republic of Estonia argues that it was treated in a discriminatory way by comparison with all the old Member States. It alleges that, under the contested regulation, it was obliged to compel its operators to eliminate a quantity of sugar greater than their surplus quantity in order to fulfil its elimination obligation, given that it is impossible to eliminate household reserves. As a consequence, its operators are in a less favourable situation than those in the old Member States. Lastly, if Regulation No 60/2004 has to be interpreted in such a way that the Republic of Estonia must bear the consequences of the existence of such reserves by paying the amount referred to in Article 7(2) of Regulation No 60/2004, it is the subject of discrimination as compared with the old Member States, which previously never had to bear such a charge. 334 The Commission maintains that the arguments of the Republic of Estonia are directed against Regulation No 60/2004 and not against the contested regulation and are thus inadmissible and, in the alternative, it disputes those arguments. 2. Findings of the Court 335 Without it being necessary to rule on the admissibility of the arguments put forward by the Republic of Estonia, it should be pointed out that Estonian operators are not required, under Regulation No 60/2004, to eliminate a quantity of sugar larger than their individual surplus. It is for the Republic of Estonia itself to ensure the elimination of a quantity of sugar equal to the surplus determined by the Commission (see paragraph 171 above). 336 As regards the alleged discrimination against the Republic of Estonia as compared with the old Member States, in so far as it would have to pay the amount referred to in Article 7(2) of Regulation No 60/2004 if it failed to eliminate a quantity of sugar equal to its surplus, it should be observed that the agricultural situation in the new Member States was radically different from that in the old Member States (Case C‑273/04 Poland v Council [2007] ECR I‑8925, paragraph 87). Accordingly, it must be found that, as regards the existence of surpluses, the situation of the old Member States and that of the Republic of Estonia before the enlargement cannot be regarded as comparable. 337 It is true that operators in the old Member States and those in Estonia were subject to different rules, quotas and production support mechanisms before enlargement. However, whereas the Community institutions could prevent the build-up of surplus stocks within the territory of the old Member States by the measures taken under the CMO in sugar, they could not prevent the build-up of surplus stocks within the territory of the new Member States before their accession to the European Union. For that reason, point 4(1) to (4) of Annex IV to the Act of Accession requires the new Member States to eliminate their surplus stocks at their own expense without laying down a parallel obligation for the old Member States, a situation which the Republic of Estonia accepted by signing the Act of Accession. 338 It must therefore be found that the Republic of Estonia has failed to demonstrate discrimination against it by comparison with the old Member States. 339 The present plea must therefore be rejected in its entirety. VIII – The seventh plea: breach of the right to property A – Arguments of the parties 340 The Republic of Estonia claims that the contested regulation breaches the right to property, which is recognised and protected in the context of the common agricultural market and on which restrictions may not be imposed unless they meet objectives of general interest pursued by the Community and do not constitute a disproportionate interference that would damage the very substance of that right. To require Estonian citizens to eliminate the sugar purchased for their consumption would constitute such interference, since that sugar could not give rise to a risk of speculation or market disruption. Moreover, it would constitute expropriation, in that households, as simple consumers, do not benefit directly from the CMO in sugar. Lastly, if operators are obliged to eliminate a quantity in excess of their individual surplus stock, in the view of the Republic of Estonia, that would also constitute a breach of the right to property. B – Findings of the Court 341 The submission of the Republic of Estonia must be rejected outright. 342 No provision of Regulation No 60/2004 obliges Estonian households to eliminate any quantity of sugar; nor is there any obligation on Estonian operators to eliminate a quantity of sugar greater than their individual surplus. Only the Republic of Estonia is required to ensure the elimination of a quantity of sugar equal to the surplus determined by the Commission or to pay the amount referred to in Article 7(2) of that regulation if it fails to fulfil its obligation. 343 In the light of the foregoing, it must be held that the Republic of Estonia has failed to prove any breach of the right to property as a result of the adoption of the contested regulation. IX – The eighth plea: breach of the principle of proportionality A – Arguments of the parties 344 The Republic of Estonia claims that the contested regulation breaches the principle of proportionality, since the elimination of household reserves is not necessary to prevent speculation and market disruption, objectives pursued by Regulation No 60/2004. First, those reserves would give rise to a risk of disruption only if they could be resold, which would be beyond the capabilities of households, as proved by the fact that the price of sugar in Estonia tripled after accession and then remained stable. Secondly, those reserves would not encourage speculation, as shown by the fact that they have never been taken into account at the time of previous accessions. Lastly, the inclusion of such reserves in the surplus attributed to the Republic of Estonia has the effect of doubling the amount payable in the event of non-compliance with the obligations laid down in Regulation No 60/2004. 345 The Republic of Latvia adds that, given the calculation errors made by the Commission, the contested regulation cannot achieve the objective of Regulation No 60/2004, which is not to punish the budgets of the new Member States but those of undertakings which stockpiled sugar for speculative purposes by exploiting differences in import duties. B – Findings of the Court 346 The considerations set out in paragraphs 121 to 129 and 162 to 167 above mean that the arguments put forward by the Republic of Estonia must of necessity be rejected. 347 As regards the arguments of the Republic of Latvia, it should be observed that they do not make it possible to identify the calculation errors which were allegedly made by the Commission and which would prevent attainment of the objective pursued by the contested regulation and by Regulation No 60/2004. Furthermore, it should be pointed out that, contrary to the assertions of the Republic of Latvia, the objective of those regulations is not to punish the budgets of undertakings that stockpiled sugar for speculative purposes by exploiting differences in import duties rather than those of the new Member States, but to prevent possible disruption of the CMO in sugar linked to the existence of surpluses on the territory of the Member States in question following their accession, in particular by ensuring that those surpluses will be eliminated at the sole expense of those Member States. 348 The present plea must therefore be rejected. X – The first additional plea raised by the Republic of Latvia, alleging infringement of the rights of the defence A – Arguments of the parties 349 The Republic of Latvia states that it has not had an opportunity to make known its views on the contested regulation or to submit its objections regarding the methodology for calculating the surpluses within a reasonable period of time. The Commission disputes that claim. B – Findings of the Court 350 In essence, the Republic of Latvia alleges infringement of its right to a fair hearing. Its arguments are therefore inoperative because, even if found to be admissible and well founded, they could have no effect on the lawfulness of the contested regulation so far as the Republic of Estonia is concerned. 351 The present plea must therefore be rejected. XI – The second additional plea raised by the Republic of Latvia, alleging breach of the principle of the protection of legitimate expectations A – Arguments of the parties 352 The Republic of Latvia claims that the Commission acted in breach of the principle of the protection of legitimate expectations, as it should have determined for each new Member State not just the corresponding surplus but also the normal carryover stock at 1 May 2004. The Commission disputes that argument. B – Findings of the Court 353 It should be pointed out that the fourth paragraph of Article 40 of the Statute of the Court of Justice, which applies to the procedure before the Court of First Instance by virtue of the first paragraph of Article 53 of that statute, and Article 116(4) of the Rules of Procedure give the intervener the right to set out arguments as well as pleas independently, in so far as they support the form of order sought by one of the main parties and are not entirely unconnected with the issues underlying the dispute, as established by the applicant and defendant, as that would otherwise change the subject-matter of the dispute (Case T‑171/02 Regione autonoma della Sardegna v Commission [2005] ECR II‑2123, paragraph 152). 354 This additional plea raised by the Republic of Latvia is entirely unconnected with the considerations made in support of the pleas submitted by the Republic of Estonia in the present action and must be dismissed as inadmissible. Although, by the second part of its second plea, the Republic of Estonia put forward an argument that could be interpreted in part as being based on breach of the principle of the protection of legitimate expectations, it did so in relation to the fact that, at the time of previous accessions, quantities of less than 3 tonnes had not been taken into account for calculating the surpluses, and not in relation to the purported legitimate expectation that it was the normal carryover stock and not the surplus that had to be calculated. 355 For the sake of completeness, it should be observed that, although point 4(2) of Annex IV to the Act of Accession provides that any stock of product in free circulation at the date of accession within the territory of the new Member States exceeding the quantity which could be regarded as constituting a normal carryover of stock must be eliminated at the expense of those Member States, that provision does not oblige the Commission to calculate this surplus quantity in two stages, that is to say, by calculating first the normal carryover stock and then the quantity in excess of that figure that must be eliminated. 356 In that regard, it should be observed that the Commission, when exercising the powers which the Council, or indeed the authors of the Act of Accession, conferred on it for implementation of the common agricultural policy, is entitled to consider it necessary to exercise a broad discretion, and the legality of a measure adopted in that sphere can therefore be affected only if the measure is manifestly inappropriate in relation to the objective which the competent institution is seeking to pursue (see Weidacher, paragraph 118 above, paragraph 26 and the case-law cited). Accordingly, it must be concluded that the Commission was free, in exercising that broad discretion, to apply a simplified method of calculation from which the surplus to be eliminated can be ascertained directly. It would be for the Republic of Latvia to show that the method chosen by the Commission is manifestly inappropriate. However, the arguments adduced by the Republic of Latvia in this regard are not such as to call into question the soundness of the method used by the Commission. The Republic of Latvia merely maintains, without in any way substantiating its assertion, first that if the Commission had employed a method which the Republic of Latvia considers adequate it would have been better able to ensure that the circumstances in which stocks were built up were correctly analysed and, secondly, that in failing to do so it breached the principle of the protection of legitimate expectations. In the context of that argument, the Republic of Latvia does not refer to any specific assurance from the Commission that it would proceed in the manner that the Republic of Latvia considers appropriate. 357 It follows that the additional plea raised by the Republic of Latvia must also be rejected as to the substance. 358 In view of the foregoing, the action must be dismissed in its entirety. Costs 359 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Republic of Estonia has been unsuccessful and the Commission has applied for costs, the Republic of Estonia must be ordered to pay the costs. 360 The Republic of Latvia must bear its own costs, pursuant to the first subparagraph of Article 87(4) of the Rules of Procedure. On those grounds, THE COURT OF FIRST INSTANCE (First Chamber) hereby: 1. Dismisses the action; 2. Orders the Republic of Estonia to bear its own costs and to pay the costs incurred by the Commission of the European Communities; 3. Orders the Republic of Latvia to bear its own costs. Tiili Dehousse Wiszniewska-Białecka Delivered in open court in Luxembourg on 2 October 2009. [Signatures] Table of contents Legal context I – The common organisation of the markets in sugar II – The Treaty of Accession and the Act of Accession Background to the dispute I – Regulation (EC) No 60/2004 II – Regulation (EC) No 651/2005 III – The contested regulation Procedure and forms of order sought Law I – The requests made as a preliminary matter by the Republic of Estonia and by the Commission A – The preliminary request made by the Republic of Estonia 1. Arguments of the parties 2. Findings of the Court B – The Commission’s preliminary request 1. Arguments of the parties 2. Findings of the Court II – The first plea: breach of the principle of collegiality A – Arguments of the parties B – Findings of the Court III – The second plea: infringement of Regulation No 60/2004 A – The binding nature of Regulation No 60/2004 in relation to the contested regulation 1. Arguments of the parties 2. Findings of the Court B – The first part 1. The meaning of the term ‘stocks’ a) Arguments of the parties b) Findings of the Court 2. The systematic reading of Regulation No 60/2004 a) Arguments of the parties b) Findings of the Court 3. The concept of ‘stocks’ adopted at the time of previous accessions a) Preliminary observations b) Arguments of the parties c) Findings of the Court 4. The interpretation of Article 32 EC a) Arguments of the parties b) Findings of the Court 5. The concept of ‘holders of surplus stock’ as interpreted by the Court of Justice a) Arguments of the parties b) Findings of the Court C – The second part 1. Preliminary observations on the scope of Article 6(1)(c) of Regulation No 60/2004 2. The importance of the consumption of sugar in Estonia a) Arguments of the parties b) Findings of the Court 3. The amendment by the Commission of the criteria applied at the time of previous accessions a) Arguments of the parties b) Findings of the Court 4. The Commission’s contribution to the build-up of household reserves in Estonia a) Arguments of the parties b) Findings of the Court 5. The Commission’s failure to take sufficient account of the economic development of the new Member States. a) Arguments of the parties b) Findings of the Court IV – The third plea: breach of the obligation to state reasons A – Arguments of the parties B – Findings of the Court V – The fourth plea: breach of the principle of sound administration A – Arguments of the parties B – Findings of the Court VI – The fifth plea; breach of the duty to act in good faith A – Arguments of the parties B – Findings of the Court VII – The sixth plea: breach of the principle of non-discrimination A – Discrimination by comparison with the Republic of Malta and the Republic of Cyprus 1. Arguments of the parties 2. Findings of the Court B – Discrimination as compared with certain Member States which had previously joined the Community 1. Arguments of the parties 2. Findings of the Court C – Discrimination as compared with all the old Member States 1. Arguments of the parties 2. Findings of the Court VIII – The seventh plea: breach of the right to property A – Arguments of the parties B – Findings of the Court IX – The eighth plea: breach of the principle of proportionality A – Arguments of the parties B – Findings of the Court X – The first additional plea raised by the Republic of Latvia, alleging infringement of the rights of the defence A – Arguments of the parties B – Findings of the Court XI – The second additional plea raised by the Republic of Latvia, alleging breach of the principle of the protection of legitimate expectations A – Arguments of the parties B – Findings of the Court Costs * Language of the case: Estonian.