Judgment — ECLI:EU:C:2010:25
Date: 2010-01-21
Language of the case: German
Court formation: Third Chamber
Subject matter: Freedom to provide services
Procedure: Action for failure to fulfil obligations - successful;Action for failure to fulfil obligations - unfounded
Origin: Germany

Summary of the Judgment 1. Actions for failure to fulfil obligations – Commission’s right to bring judicial proceedings – Time-limit for exercise of that right (Art. 226 EC) 2. Member States – Obligations – Failure to fulfil obligations – Justification – Principle of the protection of legitimate expectations (Art. 226 EC) 3. Freedom to provide services – Restrictions – Posting of workers in the framework of the provision of services (Arts 49 EC and 307 EC) 4. Accession of new Member States to the Communities – Act of Accession of 2003 – Transitional measures – Freedom to provide services (Art. 49, first para., EC; Act of Accession of 2003, Annex XII, Chapter 2(13)) 1. In the context of an action under Article 226 EC, it is for the Commission to judge at what time it will bring an action for failure to fulfil obligations; the considerations which determine its choice of time cannot affect the admissibility of the action. The rules set out in that article must be applied and the Commission is not obliged to act within a specific period, save where the excessive duration of the pre-litigation procedure in that provision is capable of making it more difficult for the Member State concerned to refute the Commission’s arguments and of thus infringing the rights of the defence. It is for the Member State concerned to provide evidence that it has been so affected. (see paras 21-22) 2. The procedure for a declaration of a failure on the part of a Member State to fulfil its obligations is based on the objective finding that a Member State has failed to fulfil its obligations under Community law, and the principle of protection of legitimate expectations cannot be relied on by a Member State in order to preclude an objective finding of a failure on its part to fulfil its obligations, since to admit that justification would run counter to the aim pursued by the procedure under Article 226 EC. The fact that the Commission did not take further action on a reasoned opinion immediately or shortly after its issue cannot create, on the part of the Member State concerned, a legitimate expectation that the procedure has been closed. That is a fortiori the position where efforts were made during the alleged period of inactivity to find a solution which would put an end to the alleged infringement. Furthermore, as no position was adopted by the Commission indicating that it was going to close the procedure instituted for a declaration of a failure to fulfil obligations, the Member State concerned cannot validly claim that the Commission infringed the principle of protection of legitimate expectations by not closing that procedure. (see paras 25-27) 3. A Member State, by interpreting, in its administrative practice, the term ‘undertaking from the other side’ in the provision at issue of a bilateral agreement on the posting of workers from undertakings established in another Member State to carry out works contracts as meaning ‘an undertaking established in the first Member State’, fails to fulfil its obligations under Article 49 EC. Such an interpretation of that provision creates direct discrimination, contrary to Article 49 EC against service providers established in other Member States wishing to conclude a works contract with an undertaking established in the other Member State party to the agreement in order to provide services in the first Member State. The disputed administrative practice cannot be justified by the fact that the provision in question is contained in a bilateral international agreement, for, when giving effect to commitments assumed under international agreements, be it an agreement between Member States or an agreement between a Member State and one or more non-member countries, Member States are required, subject to the provisions of Article 307 EC, to comply with the obligations that Community law imposes on them. Admittedly, disturbing the balance and reciprocity of a bilateral international agreement concluded between a Member State and a non-member country may constitute an objective justification for the refusal by a Member State party to that agreement to extend to nationals of other Member States the advantages which its own nationals derive from that agreement. Nevertheless, application of the bilateral agreement in question concerns, as from the accession of the other Member State party to that agreement to the Union, two Member States, with the result that the provisions of that agreement can apply to relations between those Member States only in compliance with Community law, in particular with the Treaty rules on the free provision of services In addition, there is nothing to support the view that an undertaking established in another Member State is in a situation different from that of undertakings established in the first Member State so far as concerns the possibility of entering into works contracts with undertakings established in the other Member State party to the agreement with a view to providing services in the first Member State. Furthermore, economic considerations and mere practical difficulties in the implementation of that agreement cannot, in any event, justify restrictions on a fundamental freedom or, a fortiori, a derogation under Article 46 EC, which presupposes the existence of a genuine and sufficiently serious threat affecting one of the fundamental interests of society. With regard to the alleged risk of circumvention of the transitional provisions favourable to the Member State concerned which were inserted into the Treaty of Accession in order to prevent serious disturbance to the labour market of that Member State, the extension to undertakings established in other Member States of the right to enter into works contracts with undertakings established in the other Member State party to the agreement, in order that the former may benefit from the quota for workers from that other Member State party to the agreement set pursuant to the bilateral agreement in question, is not liable to have such an effect, since the number of work permits granted to those workers is not, in any event, altered by the fact of such an extension in favour of undertakings established in other Member States. (see paras 40, 42-44, 46, 51-52, 68 and operative part) 4. Chapter 2, paragraph 13, of Annex XII to the Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded authorises the Federal Republic of Germany to derogate from the first paragraph of Article 49 EC with a view to limit, in the context of the provision of services by companies established in Poland, the temporary movement of workers whose right to take up work in Germany is subject to national measures. That derogation is designed to enable the Federal Republic of Germany to address serious disturbances, or the threat thereof, in specific sensitive service sectors on its labour market, which could arise in certain regions from the transnational provision of services and as long as that Member State applies, by virtue of the transitional provisions, national measures or those resulting from bilateral agreements to the free movement of Polish workers. The fact that, after the date of signature of the Act of Accession, new districts were added to the list of those in which works contracts under the German-Polish Agreement are not authorised does not amount to contravention of the ‘standstill’ clause under that paragraph 13. That clause prohibits the creation of ‘conditions … which are more restrictive’ for the temporary movement of workers than those existing at the date of signature of the Treaty of Accession. That is manifestly not the case where the reduction in the number of Polish workers liable to be posted in the context of the provision of services in Germany is simply the consequence of the application, after that date, of a clause, the terms of which have remained identical, to a factual situation which has developed in the labour market. Thus, the list, which is updated every quarter, of districts subject to the prohibition under the labour market protection clause in the national legislation is, in that context, purely declaratory, since there has not been any deterioration in the legal situation or any unfavourable change to German administrative practice. That interpretation is confirmed by the purpose of such ‘standstill’ clauses, which prohibit generally the introduction of any new measure by a Member State having the object or effect of creating more restrictive conditions than those which applied before the date from which those clauses come into force. (see paras 62, 64-66)