Judgment — ECLI:EU:C:1997:499
Date: 1997-10-23
Language of the case: Dutch
Court formation: Full Court
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Free movement of goods;Measures having equivalent effect;Quantitative restrictions;State monopolies of a commercial character
Concepts: Public undertakings;General
Procedure: Action for failure to fulfil obligations - unfounded
Origin: Netherlands

Summary 
I — Community law context I . 5703 
II — Admissibility j, 5706 
III — Substance Į, 5 7 u 
A — Articles 30, 34 and 37 1-5711 
(a) Are forms of energy such as electricity and natural gas 'goods'? I - 5711 
(b) Does maintenance of the exclusive rights in question constitute an 
infringement of Articles 30, 34 and 37? I - 5714 
(aa) The relationship between Articles 30 and 34 and Article 37 1-5714 
(bb) Are the rights at issue connected with the specific operation of State 
monopolies of a commercial character? I - 5720 
(i) Netherlands I - 5721 
(«) Italy 1-5723 
(iii) France I - 5724 
(iv) Spain I - 5725 
(cc) Do the rights at issue amount to discrimination between nationals of 
Member States regarding the conditions under which goods are 
procured and marketed? I - 5730 
(1) Do the contested rights constitute quantitative restrictions or 
measures having equivalent effect? I - 5730 
(i) Exclusive import rights I - 5730 
(ii) Exclusive export rights I - 5737 
* Original language: Greek. 
I - 5701 
OPINION OF MR COSMAS — CASE C-157/94 
(2) The contested rights may be justified under Article 36 of the 
Treaty I - 5740 
(c) Conclusion I - 5748 
B — Article 90(2) 1-5748 
(a) Can Article 90(2) justify the derogation from the provisions of the Treaty 
relating to the free movement of goods? I - 5748 
(b) Have the holders of exclusive rights been entrusted with the operation of 
services of general economic interest? If so, does the application of the 
rules of the Treaty relating to the free movement of goods obstruct the 
performance of the particular task assigned to them? I - 5751 
(aa) Netherlands I - 5751 
(bb) Italy 1-5756 
(cc) France I - 5758 
(i) Exclusive rights relating to electricity I - 5758 
(ii) Exclusive rights relating to natural gas I - 5761 
(dd) Spain 1-5763 
(c) Does the maintenance of exclusive rights affect the development of 
trade to such an extent as would be contrary to the interests of the 
Community? I " 5764 
(d) Conclusion I - 5766 
IV — Conclusion I - 5766 
By means of four applications, which, for 
reasons of practicality, I shall consider 
together, the Commiss ion has asked the 
C o u r t to declare that , by granting exclusive 
rights to impor t (and, in the case of the 
French Republic, the K i n g d o m of Spain and 
the Italian Republ ic , t o export) electricity 
(and, in the case of the French Republic , 
natural gas) the defendant M e m b e r States 
have failed to fulfil their obligations unde r 
Articles 30, 34 and 37 (and, in the case of the 
K i n g d o m of the Nether lands , Articles 30 and 
37) of the Treaty and also, in the case of the 
K i n g d o m of Spain, u n d e r Article 48 of the 
Act concerning the Cond i t ions of Accession 
of the K i n g d o m of Spain and the Por tuguese 
I - 5702 
COMMISSION v NETHERLANDS 
Republic and the Adjustments to the Treaties 
(OJ 1985 L 302, hereinafter 'the Act of 
Accession'). 
The United Kingdom has intervened in the 
actions in support of granting the applica­
tions, Ireland has intervened in support of 
dismissing them, and the French Republic 
has intervened in support of dismissing the 
applications directed against the Kingdom of 
Spain, the Italian Republic and the Kingdom 
of the Netherlands. 
A brief description of the subject-matter of 
the applications is sufficient to show the 
quite exceptional interest of the questions 
which they raise. The Court is asked to con­
strue and apply, in a sector such as that of 
energy, the provisions of Articles 30, 34 and 
37 (and also, as I shall explain, Article 90(2)) 
of the Treaty and essentially, perhaps for the 
first time in such a direct manner, to rule 
whether the concept of public service which 
prevails in certain Member States (if not 
most of them) is, at least with regard to cer­
tain decisively important aspects, compatible 
with the fundamental principle of the free 
movement of goods. 
I — Community law context 
1. Although the original version of the 
Treaty establishing the European Economic 
Community contains no provisions relating 
specifically to the subject, ' the question of 
establishing a common market in energy 
occupied the Community from a very early 
date. As early as 1964 the Governments of 
the Member States agreed, in the 'Protocol of 
Agreement concerning energy problems',2 
that it was necessary to create a common 
market in the energy sector, laying down in 
very general outline in the same document 
the data on the basis of which that policy 
should be determined and the objectives 
which it should pursue. Also, on 18 Decem­
ber 1968 the Commission presented to the 
Council a document entitled 'Initial Guide­
lines for a Community Energy Policy' which 
represented the first attempt to undertake a 
detailed analysis of the framework for the 
common energy policy, to identify the main 
1 — Since the Treaty on European Union came into force, the 
Treaty establishing the European Community now contains 
two provisions concerning the energy sector under Article 
3(t) the activities of the Community for achieving its pur­
poses are to include, inter alia, the adoption of measures in 
the sphere of energy and, under Article 129b(l), the Com­
munity is to contribute to the establishment and develop­
ment of trans-European networks in the areas of, inter alia, 
energy infrastructures. It should be observed that, according 
to the declaration annexed to the Final Act of the European 
Union Treaty, the question of introducing into the Treaty a 
Title relating to the energy sector will be examined on the 
basis of a report which the Commission will submit to the 
Council by 1996 at the latest. 
2 — Protocol of Agreement on energy problems reached between 
the Governments of the Member States of the European 
Communities, on the occasion of the 94th session of the Spe­
cial Council of Ministers of the European Coal and Steel 
Community, held on 21 April 1964 in Luxembourg (JO 30 
April 1964, p. 1099). 
I - 5703 
O P I N I O N O F MR COSMAS — CASE C-157/94 
problems involved and to determine the 
means available to the Community institu­
tions for resolving them. 
2. N o progress beyond those first steps was 
made for a considerable period of time. The 
question was raised again later, after Europe 
and the rest of the world experienced the 
two oil crises of 1973 and 1979. The new 
starting point was the adoption of Article 8a 
of the Treaty by means of the Single Euro­
pean Act. The prospect of completing the 
internal market by 31 December 1992 
brought back to the agenda the question of 
establishing an internal market in energy as a 
matter of urgency. Only a few months after 
the Single European Act was signed, and 
almost before it came into force, the Coun­
cil, by means of the Resolution of 16 Sep­
tember 1986, 3 laid down as an objective of 
Community energy policy, inter alia [Article 
5(d)], 'greater integration, free from barriers 
to trade, of the internal energy market with a 
view to improving security of supply, reduc­
ing costs and improving economic competi­
tiveness'. On 2 May 1988 the Commission 
for its part published a working document 
entitled 'The Internal Energy Market ' ,4 in 
which, after stressing that, to establish an 
internal energy market, it would be neces­
sary, inter alia, to apply strictly all the rel­
evant provisions of Community law in force, 
express reference was made to the need to 
supervise, in the light of those provisions, 
monopolies for the importation and export 
of electricity and natural gas. 
3. At the same time the Commission under­
took a series of legislative initiatives designed 
to remove, by means of harmonization rules, 
at least some of the obstacles to the estab­
lishment of an internal energy market. Thus 
Council Directive 90/377/EEC of 29 June 
1990 concerning a Community procedure to 
improve the transparency of gas and electric­
ity prices charged to industrial end-users, 5 
Council Directive 90/547/EEC of 29 Octo­
ber 1990 on the transit of electricity through 
transmission grids, 6 and Council Directive 
91/296/EEC of 31 May 1991 on the transit 
of natural gas through grids 7 were adopted. 
4. The scope of the proposals for directives 
presented by the Commission on 24 Febru­
ary 1992 is far wider. The most ambitious 
element of the proposals, which, according 
to their preambles, constitute, after the 
adoption of the Directives referred to in 
paragraph 3, the second phase in the process 
of establishing the internal market in elec­
tricity 8 and natural gas, 9 is the introduction 
3 — Council Resolution of 16 September 1986 concerning new 
Community energy policy objectives for 1995 and conver­
gence of the policies of the Member Sutes (OJ 1986 C 241, 
p l ) . 
4 — COM(88) 238 final. 
5 — OJ 1990 L 185, p. 16. 
6 — OJ 1990 L 313, p. 30. 
7 — OJ 1991 L 147, p. 37. 
8 — Proposal for a Council Directive concerning common rules 
for the internal market in electricity (OJ 1992 C 65, p. 4). 
9 — Proposal for a Council Directive concerning common rules 
for the internal market in natural gas (OJ 1992 C 65, p. 14). 
I - 5704 
COMMISSION v NETHERLANDS 
of a system of rules designed to give produc­
ers of electricity and natural gas and their 
customers (or at least some of them) a right 
of access, subject to certain requirements and 
limitations, to the grids of the Member States 
through which electricity or natural gas is 
transmitted from the point of production to 
the distributors or final users (transmission 
grids), and also to the grids of the Member 
States through which distributors supply 
those forms of energy to final users (distri­
bution systems). The logic behind those 
proposals is clear: a right of access for pro­
ducers, distributors and final users to the 
transmission and distribution systems 
(without which, of course, trading in elec­
tricity and natural gas would be impossible) 
is the necessary prerequisite for the estab­
lishment of conditions for effective compe­
tition in the electricity and natural gas sector, 
as it enables distributors and final consumers 
to be supplied by the producer of their 
choice, irrespective of where the producer is 
established in the Community. Nevertheless, 
it is also clear that in the Member States 
where exclusive rights of access to transmis­
sion and distribution systems have been 
established, the grant of a right of that 
kind would necessitate a review of the fun­
damental principles of the organization and 
functioning of the energy sector, ranging 
from measures to ensure the safety of 
systems to long-term planning of energy 
needs. In such circumstances it is not sur­
prising that the Commission's proposals, as 
in the meantime amended,10 are still the 
subject of negotiation in the Council at the 
time of the proceedings relating to these 
applications. n 
10 — OJ 1994 C 123, pp. 1 and 26. 
1 1 — After the oral stage of the procedure was concluded, the 
pace of the negotiations accelerated considerably with the 
adoption by the Energy Council, meeting Ín Luxembourg 
on 20 June 1996, of a 'common position' on the principles 
and conditions for the gradual establishment of the single 
electricity market. The Council reserved for a later meeting 
the question of the liberalization of the national markets in 
the natural gas sector. 
In accordance with the 'common position' (which was to be 
forwarded to the European Parliament under the 
co-decision procedure) the main provisions of the directive 
to be adopted would be as follows [see the Summary of the 
Council's 'Common Position' (established by the Council 
Secretariat) in EUROPE/Documcnts, N o 1993, 10 July 
1996]: 
(a) By the end of the period for adjusting domestic law to 
the Directive, the Member Sutes must open to compe­
tition the percentage of their market corresponding, on 
a Community average, to the share of electricity con­
sumption of customers using more than 40 GWh per 
year. This share is esumateci to be 22.66% (weighted 
Community average) of the national markets. From 1 
January 2000 this threshold will be reduced from 40 
GWh to 20 GWh, and from 1 January 2003 it will be 
reduced to 9 GWh. 
(b) For the organization of access to the transmission and 
distribution system, the Member States may choose 
between two procedures as follows: 
(i) 'Negotiated access procedure'; producers and cer­
tain consumers (determined by reference to the cri­
teria laid down by the Member States) will negoti­
ate access to the system with the operator so as to 
conclude supply agreements with each other. The 
operator of the transmission or distribution system 
may refuse access where he lacks the necessary 
capacity. 
(ii) 'Single buyer procedure': Member States will desig­
nate a legal person to be the single buyer of electric 
power within the territory covered by the system. 
In this case the Member Sutes must ensure that a 
non-discriminatory tariff for the use of the trans­
mission and distribution system is published, and 
that eligible customers are free, in accordance with 
their own needs, to conclude supply contracts with 
producers. The 'single buyer' may refuse access to 
the system and may refuse to purchase electricity 
where he lacks the necessary transmission or distri­
bution capacity. 
(c) The customers who may conclude electricity supply 
contracts under one of the two procedures adopted 
(who, moreover, are those who will benefit in practice 
from the opening up of national markets to compe­
tition) must include, in any event, those whose annual 
consumption exceeds 100 GWh. 
(d) In order to avoid disequilibrium in the opening up of 
the electricity markets, a special provision will be 
included in the Directive, to De effective for a limited 
period, under which the conclusion of electricity supply 
contracts with a customer who is entitled to conclude 
such contracts in another Member State may not be 
f>rohibited if that consumer meets the relevant criteria 
aid down in both Member States in question; in the 
event of its not being possible to execute the contract 
owning to differences in the manner in which such cri­
teria are arrived at in the two Member Sutes, the Com­
mission may, in certain circumsttnees, require the con­
tract to be executed. 
(e) Member Sutes may impose on undertakings operating 
in the electricity sector public service obligations which 
may relate to security of supply, regularity, quality and 
price of supplies and to environmental protection. 
I - 5705 
OPINION OF MR COSMAS — CASE C-157/94 
5. What role do the present applications play 
in relation to the establishment of the inter­
nal market in energy? The Commission 
seeks a ruling that, irrespective of the 
progress achieved in drawing up the second­
ary legislation concerning electricity and 
natural gas, the defendant Member States are 
under an obligation to repeal certain provi­
sions of their domestic law relating thereto, 
namely those granting exclusive rights to 
import (and, in the case of France, Spain and 
Italy, export) electricity and (with regard to 
France) natural gas. Also, according to the 
Commission, those provisions are contrary 
to the Treaty itself, in particular, firstly, 
Articles 30 and 34 (which prohibit, as 
between Member States, quantitative restric­
tions on imports and exports and measures 
having equivalent effect) and, secondly, 
Article 37(1), which provides as follows: 
'Member States shall progressively adjust 
any State monopolies of a commercial char­
acter so as to ensure that when the transi­
tional period has ended no discrimination 
regarding the conditions under which goods 
are produced and marketed exists between 
nationals of Member States. The provisions 
of this Article shall apply to any body 
through which a Member State, in law or in 
fact, either directly or indirecdy supervises, 
determines or appreciably influences imports 
or exports between Member States. These 
provisions shall likewise apply to monopo­
lies delegated by the State to others.' In that 
connection, it is noteworthy that the Com­
mission emphasizes, in the preamble to each 
of the proposed directives referred to above, 
that 'the present Directive does not prejudice 
the application of the rules of the Treaty'. 
Should the present applications succeed, will 
the defendant States be under an obligation 
to repeal, or at least amend radically, the 
remaining exclusive rights in the sectors at 
issue in order to comply fully with the 
Court's judgment? One of the longer-term 
consequences of an outcome favourable to 
the Commission, and no doubt the most 
important, would be the imposition of an 
obligation on the defendant States to ensure, 
by one means or another, access to the 
respective transmission and distribution sys­
tems for distributors or final users who may 
wish to import or export electricity or natu­
ral gas. In the Commission's opinion, this 
would remove one of the main obstacles (if 
not the main obstacle) to the establishment 
of the internal energy market. 
II — Admissibility 
6. The French Republic (although emphasiz­
ing that in that connection it 'relies on the 
Court's assessment') objects that the Com­
mission's action is inadmissible on the 
grounds that the Commission did not adopt 
a reasoned position, except in its application, 
on some of the arguments put forward dur­
ing the preceding administrative procedure; 
that, in any case, such position differs from 
that set out in the reasoned opinion; and 
that, under those circumstances, the Com­
mission disregarded the purpose of the pro­
cedure under Article 169 of the Treaty, 
infringing the right of the defendant State to 
I - 5706 
COMMISSION v NETHERLANDS 
defend its viewpoint. The French Republic 
makes the following submissions: 
(a) In reply to the letter before action, the 
French Government contended that the 
monopolies on the import and export of 
electricity and natural gas were intended 
to ensure the national energy supply and 
consequently were bound up with 
grounds of 'public security' for the pur­
poses of Article 36 of the Treaty. With 
regard to electricity, the Commission's 
reasoned opinion stated that Article 36 
could not be relied upon and set out the 
reasons why the Commission considered 
that the removal of such monopolies 
could not endanger security of supply. 
However, according to the French Gov­
ernment, the arguments relating to that 
question in the application are quite dif­
ferent because, although the Commis­
sion accepts the need for centralized 
control of the electricity supply system, 
it takes the view that security of supply 
can be attained by less onerous means 
than import and export monopolies. So 
far as natural gas is concerned, the Com­
mission contends before this Court that 
the monopoly of imports is not bound 
up with security of supply, relying on 
arguments some of which (the existence 
of relatively large-scale Community pro­
duction, the lack of alternative medium-
term outlets for the countries which 
export gas in the Community, the greater 
dependence of France on oil, which it 
can import freely, than on gas) were not 
put forward during the preceding admin­
istrative procedure. 
(b) In reply to the letter before action, the 
French Government also sought to rely 
on Article 90(2) of the Treaty by alleging 
that the monopolies in question were 
justified by the services of general econ­
omic interest whose operation had been 
entrusted to the bodies in favour of 
which the monopolies had been created. 
Those arguments were dismissed in the 
reasoned opinion on the ground that in 
this case that provision could not be 
relied upon because it relates only to 
conduct of the undertakings referred to 
in Article 90(1). Nevertheless, according 
to the defendant State, the Commission, 
for the first time in its application, firstly, 
admits that Article 90(2) enables the 
Member States to grant to those under­
takings exclusive rights which restrict or, 
in some cases, exclude competition pro­
vided that this is necessary for the per­
formance of the particular task assigned 
to them and, secondly, refers extensively 
to the criteria for determining whether 
or not that condition is fulfilled. 
In my opinion, those arguments of the 
French Government cannot succeed. 
I - 5707 
O P I N I O N O F MR COSMAS — CASE C-157/94 
7. As the Court has repeatedly observed,1 2 
the purpose of the pre-litigation procedure is 
to give the Member State concerned an 
opportunity to comply with its obligations 
under Community law and to avail itself of 
its right to defend itself against the com­
plaints made by the Commission. Therefore 
the reasoned opinion with which that pro­
cedure concludes must determine as clearly 
and specifically as possible the subject-
matter of the dispute, that is to say, it must 
contain all the particulars necessary to enable 
the Member State concerned to understand 
the factual 1 3 and the legal 1 4 basis of the 
Commission's allegation that the State in 
question has failed to fulfil its obligations. If 
the reasoned opinion satisfies those require­
ments, the Commission's application will be 
admissible even though the arguments it 
contains, both factual (relating to the facts 
constituting the situation or the conduct seen 
by the Commission as involving a failure by 
the defendant State to fulfil its obligations) 
and legal (concerning the interpretation of 
the provisions of Community law which the 
Commission regards as having been 
infringed), may have been enhanced by 
comparison with the arguments in the rea­
soned opinion, provided that such enhance­
ment does not conceal an alteration or exten­
sion to the legal and factual basis of the case 
as crystallized in the reasoned opinion. 1 5 
8. In the present case the differences indi­
cated by the French Government between 
the reasoned opinion and the application do 
not alter or widen the subject-matter of the 
dispute as established in the preceding 
administrative procedure. From both the fac­
tual viewpoint (retention of exclusive rights 
of public bodies to import and export elec­
tricity and gas) and the legal viewpoint 
12 — See for example the order of 11 July 1995 in Case C-266/94 
Commission v Spain [1995] ECR 1-1975, paragraph 16, and 
the judgments in Case C-289/94 Commission v Italy [1996] 
ECR 1-4405, paragraph 15; Case 293/85 Commission v Bel­
gium [1988] ECR 305, paragraph 13; and Case 74/82 Com-
misńon v Ireland [1984] ECR 317, paragraph 13. 
13 — See Case 124/81 Commission v United Kingdom [1983] 
ECR 203, paragraph 5 et seq.; Case 51/83 Commission v 
Italy [1984] ECR 2793, paragraph 5 et seq.; Case 298/86 
Commission v Belgium [1988] ECR 4343, paragraph 9 et 
seq.; and Case C-296/92 Commission v Italy [1994] ECR 
1-1, paragraph 11 et seq. 
14 — See Case 186/85 Commission v Belgium [1987] ECR 2029, 
paragraph 11 et seq.; Case C-198/90 Commission v Nether­
lands [1991] ECR 1-5799, paragraph 13 et seq.; and Case 
C-52/90 Commission v Denmark [1992] ECR 1-2187, para­
graph 23 et seq. 
15 — It seems to me that this is what is implied by paragraph 14 
of the judgment in Case C-57/94 Commission v Italy [1995] 
ECR 1-1249, in which the Court stated that, in order to 
remedy a defect in the Commission's application, as found 
by the Court in an earlier judgment ruling that the applica­
tion was inadmissible because the pleas in law differed from 
those in the reasoned opinion, 'it sufficed for the Commis­
sion to submit an application based on the same complaints, 
pleas in law and arguments as the reasoned opinion ...' 
(emphasis added). See also Case C-375/90 Commission v 
Greece [1993] E C R 1-2055. In that case the Commission 
had alleged, in the course of the preceding administrative 
procedure, that the Greek authorities had infringed Com­
munity law by inspecting a consignment of meat by means 
of method A, which showed that the meat fulfilled the 
health requirements of the regulation in question and, sub­
sequently, carrying out a second inspection using method B, 
which was provided for by the regulation only when the 
method A inspection was inappropriate or showed that the 
products inspected did not meet the health requirements of 
the regulation. The Hellenic Republic stated during the pre­
ceding administrative procedure and before the Court that 
it had used method B only. The Commission did not chal­
lenge this assertion but argued, for the first time before the 
Court, that the Greek authorities had an obligation in any 
case to apply method A initially. The Court found that it 
could not take that 'allegation' into account because it had 
not been made during the written suge either before the 
Court or in the course of the preceding administrative pro­
cedure. In my opinion, that 'allegation' changed the 
subject-matter of the dispute entirely: in principle it was 
alleged that Greece had used method B when it had already 
used method A, and subsequently the Commission alleged 
that the failure consisted in not using method A (on this 
point, see paragraph 16 of the Opinion of Advocate Gen­
eral Tesauro). 
I - 5708 
COMMISSION v NETHERLANDS 
(infringement of Articles 30, 34 and 37 of the 
Treaty), the essence of France's alleged fail­
ure is the same in the reasoned opinion and 
in the application, and therefore the Member 
State concerned was not deprived of the 
opportunity to submit effectively its obser­
vations on the essential points of the dispute 
during the preceding administrative pro­
cedure. The situation is as follows: 
(a) With regard to the need to ensure sup­
plies, which the French Republic relies 
upon as justifying, in the light of Article 
36 of the Treaty, the grant of exclusive 
rights to import electricity and gas, the 
reasoned opinion sets out clearly enough 
the substance of the Commission's argu­
ment (rejecting the French Govern­
ment's submissions and arguing that 
security of supply could be attained by 
means less restrictive of imports). In the 
application that argument is merely par­
ticularized, so far as electricity is con­
cerned, by an indication of the factors 
which, according to the Commission, 
constitute the concept of 'security of 
supply', and the observation that none of 
those factors would be affected by with­
drawal of the contested exclusive rights 
and, so far as gas is concerned, by the 
provision of certain factual information 
on the existing situation in the market in 
question. 
(b) With regard to Article 90(2) of the 
Treaty, upon which the French Govern­
ment seeks to rely, it is true that, whereas 
in the reasoned opinion the Commission 
merely stated that that provision did not 
concern State measures contrary to 
Articles 30, 34 and 37 of the Treaty, but 
related to conduct contrary to the Treaty 
by the undertakings referred to in 
Article 90(1), the application adds that, 
even assuming that Article 90(2) could 
justify State measures contrary to Article 
30 et seq. of the Treaty, it would in any 
case be necessary to show, following 
examination of those measures in the 
light of the principle of proportionality, 
that they were necessary for perfor­
mance of the particular task assigned to 
the undertakings for whose benefit they 
were adopted. However, the latter argu­
ment (which, it should be noted, is by 
way of an alternative: the Commission's 
viewpoint given in the reasoned opinion 
constitutes its main argument, as it does 
in the application, against the French 
Government's submissions concerning 
Article 90(2)) does not alter the legal or 
the factual basis of the defendant State's 
failure to fulfil its obligations or other­
wise affect its right to a fair hearing, but 
aims precisely to refute that State's 
defence. Furthermore, in its reply to the 
reasoned opinion, the defendant State 
referred, at least superficially, to the 
question of the extent to which the con­
tested exclusive rights are necessary for 
performance of the particular task 
assigned to the undertakings to which 
they were granted, pointing out (see 
page 15 of the document in question) 
that 'the control of trade is technically 
and economically necessary for the per­
formance of this task'. Therefore, even 
assuming that the Commission was not 
entitled to allude to that matter in the 
application without having previously 
mentioned it in the reasoned opinion, 
the defendant State, having considered, 
before the application was lodged, that 
the question was one relevant to the case, 
I - 5709 
OPINION OF MR COSMAS — CASE C-157/94 
certainly cannot be regarded as having 
been denied the right to a fair hearing. 16 
9. Before going on to examine the substance 
of the present applications, I consider it 
appropriate to refer very briefly to another 
question. 
The Spanish Government contends, in its 
defence in Case C-160/94, that in view of the 
differing energy policies of the Member 
States, and the diversity of the ways in which 
the sector is organized, the establishment of 
a genuine internal market in energy (particu­
larly in the electricity sector) makes it neces­
sary to harmonize or amend the legislation 
governing that sector in the other Member 
States and to deal with the technical prob­
lems associated with the liberalization of 
trade in electricity. In those circumstances, 
continues the Spanish Government, legisla­
tive initiatives are a method of establishing 
the internal energy market which is far pref­
erable to out-and-out, uncontrolled liberal­
ization such as that which the present appli­
cations seek to achieve. Furthermore, it 
concludes that it may be directly inferred 
from the preamble to the Proposal for a 
Council Directive concerning common rules 
for the internal market in electricity (cited in 
paragraph 4) that, in the Commission's opin­
ion, complete liberalization of this market 
can proceed only gradually. 
10. The French Republic also expresses 
doubts as to the objectives of the action 
against it. In its defence in Case C-l59/94 it 
observes that the application refers only to 
the exclusive rights to import and export 
electricity and gas, when in France those sec­
tors are organized in such a way that it 
would be pointless to abolish those rights 
without removing the other exclusive rights 
in existence (particularly the exclusive right 
of transmission). In that connection, adds the 
French Government, it is significant that the 
Commission's Proposals for Council Direc­
tives concerning common rules for the inter­
nal market in electricity and natural gas con­
sider the system for importing and exporting 
those products not in isolation but in con­
junction with the other parameters of the 
sectors in question. Similar reasoning is fol­
lowed by the Italian Republic in its observa­
tions concerning the intervention of the 
United Kingdom in support of the Commis­
sion's action against Italy. 
11. If the abovementioned objections con­
cerning the appropriateness of the present 
applications are intended to indicate that the 
latter are inadmissible, those arguments can­
not be accepted. The Court has consistently 
held that, in the context of the balance of 
powers between the institutions laid down in 
the Treaty, it is not for the Court to consider 
16 — See Case 176/84 Commission v Greece [1987] ECR 1193, 
paragraph 12 et seq., in particular paragraph 20, and Case 
178/84 Commission v Germany [1987] ECR 1227, para­
graph 13 et seq., in particular paragraph 23. 
I -5710 
COMMISSION v NETHERLANDS 
what objectives are pursued in an action 
brought under Article 169 of the Treaty; an 
action against a Member State for failure to 
fulfil its obligations, the bringing of which is 
a matter for the Commission in its entire dis­
cretion, is objective in nature.17 From that 
point of view, the fact that the Commission 
has presented proposals for directives laying 
down common rules in the sectors of elec­
tricity and natural gas is of no relevance at 
all. Likewise neither the fact that negotia­
tions on the subject were in progress within 
the Council at the time when these actions 
were brought nor the content of legislative 
measures under consideration exempts the 
Member States from fulfilling their obliga­
tions under the legislation which continues 
to govern the sectors in question until the 
provisions under discussion enter into 
force. , 8 
III — Substance 
A — Articles 30, 34 and 37 
(a) Are forms of energy such as electricity 
and natural gas 'goods'? 
12. The term 'goods', as used in Title I of 
the Treaty, is given a broad interpretation in 
the Court's case-law. As the Court stated in 
its judgment in Case 7/68, for the purpose of 
the Treaty provisions concerning the free 
movement of goods, 'goods' means 'prod­
ucts which can be valued in money and 
which are capable, as such, of forming the 
subject of commercial transactions'. 19 Like­
wise in Case C-2/90, 20 when faced with the 
question whether non-recyclable waste con­
stituted 'goods' as defined above, the Court 
replied in the affirmative (paragraph 26), stat­
ing that 'objects which are shipped across a 
frontier for the purposes of commercial 
transactions are subject to Article 30, what­
ever the nature of those transactions'. 
13. It is true that the special physical charac­
teristics of electricity and natural gas might 
justify some doubt as to how far those forms 
of energy are 'products' or 'objects,' as 
defined above, which are subject to Articles 
30, 34 and 372 1 of the Treaty. The Court 
does not appear to have shared those doubts 
at any time. As early as its judgment of 15 
April 1964 in Case 6/64,M the Court 
accepted indirectly that electricity was sub­
ject to the provisions of the Treaty concern­
ing the removal of quantitative restrictions 
between the Member States. That position 
was expressly confirmed in the judgment of 
17 — Sec Case 415/85 Commission v Ireland [1988] ECR 3097, 
paragraph 9. 
18 — See Case C-317/92 Commission v Germany [1994] ECR 
1-2039, paragraph 5, and Case 220/83 Commission v France 
[1986] ECR 3663, paragraph 7. 
19 — Commission v Italy [1968] ECR 618. 
20 — Commission v Belgium [1992] ECR 1-4431. 
21 — With particular regard to Article 37, it should be noted that, 
as the Court has repeatedly held, it is clear from the place 
of that provision in the chapter of the Treaty on the elimi­
nation of quantitative restrictions and from tne terminology 
used in that provision that it refers to trade in goods and 
not the supply of services (see Case 155/73 Sacchi [1974] 
ECR 217, paragraph 10; Case 271/81 Mialocq [1983] ECR 
2057, paragraph 8; Case 30/87 Bodson [1988] ECR 2479, 
paragraph 10; Joined Cases C-46/90 and C-93/91 Lagauche 
[1993] ECR 1-5267, paragraph 33, and Case C-17/94 Ger­
vais [1995] ECR 1-4353, paragraph 35). 
22 — Costa v Enel [1964] ECR 614. 
I -5711 
O P I N I O N O F MR COSMAS — CASE C-157/94 
27 April 1994 in Case C-393/92, 23 in para­
graph 28 of which the Court observes that 
'in Community law, and indeed in the 
national laws of the Member States, it is 
accepted that electricity constitutes a good 
within the meaning of Article 30 of the 
Treaty'; that is apparent, according to the 
same paragraph, from the fact that electricity 
is regarded as a good under the Communi­
ty's tariff nomenclature. 
14. The Italian Republic, the only one of the 
defendant States which questions whether 
electricity falls under the heading of 'goods', 
contends that the paragraph cited from the 
Almelo judgment does not take sufficient 
account of the natural characteristics of elec­
tricity and the conditions under which it is 
produced, transmitted, distributed and con­
sumed. A detailed study of those factors 
leads, according to the Italian Republic, to 
the conclusion that the import and export of 
electricity are activities subject to the provi­
sions concerning the freedom to provide ser­
vices, rather than those relating to the free 
movement of goods. Electricity is intangible, 
it cannot be warehoused and it has no inde­
pendent economic existence since its use can 
be conceived of only by reference to its 
applications. Furthermore, the import and 
export of electricity are mere acts of manage­
ment of the grid in question and can only be 
deemed to be included under the heading of 
'service'. According to the Italian Govern­
ment, the Schindler and ERT judgments also 
show that activities consisting in the import 
or export of goods with the sole object of 
providing a particular service are absorbed 
by the latter and therefore do not fall within 
the ambit of the provisions relating to the 
free movement of goods. The Italian Repub­
lic adds that the fact that it was necessary to 
introduce in Italian law provisions to the 
effect that electricity should, by way of a 
legal fiction, be deemed a 'movable' shows 
precisely that the definition of electricity as 
'goods' is far from obvious. 
15. That argument cannot be accepted. Irre­
spective of the reasons which may have led 
to the introduction in Italian law of express 
provisions defining electricity as a 'movable', 
there is no doubt that in Community law 
(having regard also to the fact that 'services' 
are subordinate to 'goods', which may be 
directly inferred from Article 60 of the 
Treaty) 24 the involvement of services with­
out which a thing cannot be used does not 
mean that the latter ceases to be capable of 
being described as a 'good' if, in spite of 
everything, that thing corresponds to the pri­
mary and principal purpose pursued by the 
contracting parties. In that connection I must 
observe that, notwithstanding the special 
characteristics of electricity, that form of 
energy may be, and is in practice, the subject 
of commercial transactions in which the con­
tracting parties (for example, the distributor 
and the final consumer) regard it not only as 
something which remains entirely indepen­
dent from the various activities needed, after 
its production, in order to transmit, distrib-
23 — Almelo [1994] ECR 1-1477. 
24 — See, for example, Joined Cases 60/84 and 61/84 Cinétbèque 
v Fédération Nationale des Cinémas Français [1985] ECR 
2605, paragraph 10, and Case C-239/90 Boscher [1991] 
ECR 1-2023, paragraphs 7 to 10. 
I -5712 
COMMISSION v NETHERLANDS 
ute and consume it, but also as something 
which is more important than those activi­
ties. 
16. Neither the Schindler judgment nor the 
ERT judgment to which the Italian Govern­
ment refers in this connection contains suffi­
cient particulars to detract from that conclu­
sion. The facts of the Schindler case 25 differ 
entirely from those of the present matter. In 
response to a question referred for a prelimi­
nary ruling, by means of which the national 
court asked whether lotteries fall, at least 
partly, within the ambit of Article 30 in so far 
as they entail the sending and distribution of 
material objects to and in another Member 
State, the Court replied in the negative, 
observing (paragraph 22) that the latter activi­
ties could not be considered independently of 
the lottery to which they relate, which must 
be regarded as a 'service' activity for the pur­
poses of the Treaty, since they are not ends in 
themselves and their sole purpose is to enable 
residents of the Member State into which 
those objects are imported to participate in 
the lottery.26 The differences between the 
activity to which the Schindler judgment 
refers and an activity consisting in importing 
or exporting electricity for subsequent distri­
bution or consumption are, I think, clear. In 
the latter activity, the objective of the transac­
tion is the purchase or transmission of elec­
tricity, and the independence of that objective 
(as an end in itself) is not affected in the 
slightest by the fact that, in order to attain it, 
the party concerned must in all probability 
become a user of services supplied in return 
for remuneration. Finally, in paragraph 14 of 
the ERT judgment, 27 the Court pointed out, 
thus following the Sacchi judgment,28 that 
trade in any kind of material used for televi­
sion broadcasting is subject to the rules on the 
free movement of goods, and went on to say 
(paragraphs 15 and 16) that the grant to a 
single undertaking of an exclusive right to 
import the material and products necessary 
for exercising the exclusive right (also owned 
by that undertaking) to supply television 
broadcasting services did not constitute a 
measure having an effect equivalent to a quan­
titative restriction on imports unless the grant 
of the exclusive right of importation resulted, 
directly or indirectly, in discrimination against 
imported products. However, it certainly can­
not be said that that assessment (that an exclu­
sive right to import goods which is granted in 
order to facilitate the exercise of an exclusive 
right to supply a service is not in itself a meas­
ure having equivalent effect — and I shall 
revert to the exact significance of that assess­
ment in paragraph 65 below) excludes a priori 
from the ambit of the provisions concerning 
the free movement of goods the activity of 
importing or exporting a good the purchase 
or transmission of which is connected with 
the supply of a service or even depends on it 
where, as in the case of imports or exports of 
electricity, such purchase and transmission 
are purposes which are entirely independent 
of the service. 29 
25 — Sec Case C-275/92 H. M. Customs and Excise v Schindler 
[1994] ECR 1-1039. 
26 — See also Case C-55/93 Van Schaik [1994] ECR 1-4837, 
paragraphs 12 to 14. 
27 — Sec Case C-260/89 ERT v DEP and Others [1991] ECR 
2925. 
28 — Cited above (footnote 21). 
29 — See Case 45/87 Commission v Ireland [1988] ECR 4929. In 
that case the Commission asked the Court to declare that, 
by allowing the inclusion, in an invitation to tender for a 
public works contract, of a clause providing that certain 
materials to be used in the performance of the contract 
were to be certified as complying with the Irish technical 
specifications, Ireland had failea to fulfil its obligations 
under Article 30 of the Treaty. Ireland claimed before the 
Court that the contract in question did not relate to the sale 
of goods but to the performance of work, so that it fell 
under the Treaty provisions concerning the freedom to sup­
ply services, and that the clauses relating to the materials to 
be used were completely subsidiary. That argument was not 
accepted by the Court, which stated (paragraph 17) that 
'the fact that a public works contract relates to the provi­
sion of services cannot remove a clause in an invitation to 
tender restricting the material that may be used from the 
scope of the prohibitions set out in Article 30'. 
I -5713 
OPINION OF MR COSMAS — CASE C-157/94 
17. Consequently electricity and natural gas 
are 'goods' for the purpose of Title I of the 
Treaty, and activities such as the import and 
export of those forms of energy fall within 
the ambit of the Treaty provisions relating to 
the free movement of goods. 
(b) Does maintenance of the exclusive rights 
in question constitute an infringement of 
Articles 30, 34 and 37? 
(aa) The relationship between Articles 30 
and 34 and Article 37 
18. As the Court is asked by the Commis­
sion to declare that the defendant Member 
States have failed to fulfil their obligations 
under Article 30 (and also Article 34 in the 
cases of France, Spain and Italy) and Article 
37, the question immediately arises of the 
relationship between Articles 30 and 34 on 
the one hand and Article 37 on the other: 
must the exclusive rights in question be 
regarded as contrary both to Articles 30 and 
34 and to Article 37, or should perhaps the 
question whether those rights are compatible 
with the Treaty be judged solely by reference 
to Article 37, in view of its special character? 
19. This is by no means the first time that 
the Court has had to consider the relation­
ship between Article 37 and other provisions 
of the Treaty. In the mid-1960s Advocate 
General Gand, in his Opinion in Case 
20/64, 30 took the view that, to reply to the 
questions referred to the Court as to 
whether in 1959, at the material time, 
Articles 30, 31, 32 and 33, on the one hand, 
and Article 37, on the other, automatically 
required, in accordance with their exact 
meaning, the abolition of the national mea­
sures falling within the ambit of those provi­
sions, it was necessary to clarify the relation­
ship between Article 37 and the other 
provisions of the chapter of the Treaty relat­
ing to the elimination of quantitative restric­
tions in trade between the Member States. 
According to the Advocate General, there 
were two possible solutions: either the ele­
ments of the State monopolies of a commer­
cial character referred to by Article 37 
should be examined on each occasion and 
should subsequently be assessed in the light 
of Articles 30 and 36, or else Article 37 was 
to be regarded as the only one governing the 
question of State monopolies of a commer­
cial character. According to that Opinion, 
the second solution would not totally 
exclude the application of Articles 30 and 36, 
although it would mean they would have to 
be applied through Article 37 to the extent to 
which the latter refers to the former provi­
sions. The Advocate General inclined in 
favour of the second solution, concluding 
that the quantitative restrictions on imports 
and exports prohibited under Articles 30 and 
34 were one of the forms which might be 
taken by 'discrimination regarding the con­
ditions under which goods are procured and 
marketed', such discrimination being con­
nected with the existence and operation of 
the State monopolies of a commercial char­
acter of which Article 37 requires the aboli­
tion. However, in its judgment of 4 February 
30 — Case 20/64 Albatros [1965] ECR 40. 
I -5714 
COMMISSION v NETHERLANDS 
1965, the Court did not give a ruling on that 
question. It found that the Treaty did not 
require the immediate abrogation of all the 
measures for controlling imports existing 
when it entered into force but did, on the 
other hand, prohibit any new restriction or 
discrimination and impose the obligation 
progressively to abolish existing restrictions 
and discrimination, which should disappear 
totally by the end of the transitional period 
at the latest. The Court added that there was 
no need, under those circumstances, to 
decide 'whether the application of Article 37 
to State monopolies does or does not exclude 
the application of any other provision of the 
Chapter relating to the elimination of quan­
titative restrictions between Member States, 
the effect of both interpretations being iden­
tical in the context of the legal information 
supplied by the Italian court'. 
20. The opinion of Advocate General Reischl 
in Case 45/75 31 was similar to that of the 
Advocate General in the Albatros case. In the 
later case the Court was asked to give a pre­
liminary ruling on various questions relating 
to the interpretation, in connection with a 
national tax on imported and domestic prod­
ucts in the framework of a monopoly of a 
commercial character, of Article 37 of the 
Treaty, on the one hand, and Article 95, on 
the other, with regard to the prohibition on 
imposing on products imported from other 
Member States internal taxation in excess of 
that imposed on domestic products. The 
Advocate General took the view 32 that, in 
order to reply to the questions, it was not 
necessary to construe Article 95, observing 
that, in his opinion, 'Article 37 is the sole 
criterion for judging monopoly charges since 
Article 37 is the lex specialis in relation to 
Article 95', and in support of that viewpoint 
he cited the judgment of 16 December 1970 
in the Cinzano case, 33 in which a question 
relating to the taxation of imported goods 
subject to a monopoly in the importing 
country was answered solely on the basis of 
Article 37 and the prohibition of discrimi­
nation for which it provides. Nevertheless, in 
its judgment of 17 February 1976, the Court 
took a different approach: 34 firstly, it exam­
ined the contested tax in the light of Article 
95 and, after finding that that provision did 
not, under certain circumstances, prohibit 
the tax, it considered the same tax in the light 
of Article 37 of the Treaty, observing (para­
graph 21) that 'the fact that a national meas­
ure complies with the requirements of 
Article 95 does not imply that it is valid in 
relation to other provisions of the Treaty' 
and that therefore it was necessary to deter­
mine whether the contested tax, although 
fulfilling the requirements of Article 95, 
nevertheless, constituted, for the purpose of 
Article 37, unfavourable discrimination 
regarding the conditions under which goods 
are procured and marketed, linked with the 
existence and operation of a State monopoly 
of a commercial character. 
21. The judgment in the Miritz case,35 
which was published on the same day as that 
31 — Rewe-ZentraU des Lebensmittel-Großhandels [1976] ECR 
181. 
32 — See the Opinion cited above, p. 106 et seq. 
33 — Cise 13/70 [1970] ECR 1089. 
34 — See in particular paragraph 19 et seq. 
35 — Case 91/75 [1976] ECR 113. 
I -5715 
O P I N I O N O F MR COSMAS — CASE C-157/94 
in Case 45/75, dealt with a number of pre­
liminary questions, the first of which con­
cerned the interpretation, in relation to a 
charge imposed by the Member State on 
imported products, of Article 12 of the 
Treaty concerning the elimination between 
Member States of customs duties on imports 
or exports or any charges having equivalent 
effect, while the other two questions sought 
an interpretation of Article 37 of the Treaty 
in relation to the same charge. The first ques­
tion referred directly to Article 12, but the 
Court's reply did not consider Article 12, 
following Advocate General Trabucchi on 
that point. The Court observed (paragraph 5) 
that 'since the structure and character [of the 
charge in question] link it to the system of 
the German alcohol monopoly, the answer 
to the first question must be ascertained 
from the text of Article 37, which deals spe­
cifically with the adjustment of State 
monopolies'. 3 6 Further on, the Court stated 
(paragraph 8) that, as Article 37(1) is not 
concerned exclusively with quantitative 
restrictions on imports, but prohibits all dis­
crimination between nationals of Member 
States regarding the conditions under which 
goods are procured and marketed, the prohi­
bition -which it imposes is not limited to 
imports and exports which are directly sub­
ject to the monopoly, but covers all measures 
which are connected with its existence and 
affect intra-Community trade, including 
therefore even charges which result in dis­
crimination against imported products as 
compared with national products coming 
under the monopoly. In those circumstances, 
the Court concluded that the purpose of the 
obligation of the Member States under 
Article 37(1) is to ensure compliance with 
the fundamental rule of the free movement 
of goods, 'in particular by the abolition, in 
trade between Member States, of customs 
duties and charges having equivalent effect', 
and that a charge of the type at issue in that 
case, which was introduced after the Treaty 
came into force, was contrary to rule requir­
ing the maintenance of the status quo in 
Article 37(2). 
22. Are the Rewe-7.entra.le des Lebensmittel-
Grosshandels and Miritz judgments compat­
ible? A first reading might lead to the oppo­
site conclusion since, in the former, the 
Court examined the charge on imported 
goods subject to a State monopoly in the 
importing State, first in the light of Article 
95 and then by reference to Article 37, 
whereas in the latter the charge which was 
levied on the import of goods and was con­
nected with the operation of a State 
monopoly of a commercial character was 
examined solely in the light of Article 37, 
considered as a special rule. Nevertheless, I 
think that the approaches in the two judg­
ments with regard to the relationship 
between Article 37 and similar provisions of 
the Treaty are not necessarily incompatible. 
In the Mińtz judgment, the Court appears to 
have accepted that levying on the imported 
product a tax which constitutes a 'charge of 
equivalent effect to customs duty', which is 
prohibited by Article 12, necessarily involves 
'discrimination between nationals of the 
Member States regarding the conditions 
36 — Case 59/75 Munįhera [1976] ECR 91, in which a national 
measure relating to the grant of a monopoly of the exclu­
sive right to import a particular product was assessed solely 
in the light of Article 37, with no express reference to 
Article 30 of the Treaty, did not adopt a similar approach to 
that taken in the Miriti judgment, mainly because the cues­
tión submitted for a preliminary ruling in that case related 
only to the interpretation of Article 37. 
I-5716 
COMMISSION v NETHERLANDS 
under which goods are procured and mar­
keted', which is prohibited by Article 37(1) 
of the Treaty, where, in addition, that tax is 
connected with the operation of a State 
monopoly of a commercial character, and 
that, since the latter provision refers specifi­
cally to State monopolies of a commercial 
character, it is the only one which is appli­
cable to this question. In the Rewe-Zentrale 
case, the Court, after stating that the charge 
referred to in the questions was, in certain 
circumstances, compatible with Article 95, 
went on to determine whether, notwith­
standing, the charge constituted from 
another viewpoint 'discrimination regarding 
the conditions under which goods are pro­
cured and marketed', which is prohibited by 
Article 37(1). Therefore the Court did not 
have an opportunity (and, in my opinion, it 
is in this respect that the judgment may dif­
fer from the Miritz judgment) to consider 
whether the charge on the imported goods 
contrary to Article 95 necessarily, where in 
addition it was connected with the operation 
of a State monopoly of a commercial charac­
ter, involved discrimination regarding the 
conditions under which goods are procured 
and marketed, which is prohibited by Article 
37, and whether, in that case, only the latter 
provision could be regarded as having been 
infringed. 
23. Nevertheless, there is no doubt that in 
the later judgment of 13 March 1979, in Peu-
reux II, 37 giving a preliminary ruling on the 
interpretation of Article 37 and other provi­
sions of the Treaty relating to the free move­
ment of goods, although the Court con­
firmed (paragraph 27) that Article 37 is a 
special rule ('specific provision'), it ruled that 
a national provision (prohibiting the distilla­
tion, for the purpose of manufacturing prod­
ucts reserved to a national commercial 
monopoly, of raw materials coming from 
other Member States — a prohibition which 
did not apply to identical raw materials pro­
duced within the national territory — was 
simultaneously, firstly, a measure having an 
effect equivalent to a quantitative restriction 
within the meaning of Article 30 and, sec­
ondly, a measure involving discrimination 
regarding the conditions under which goods 
are procured and marketed within the mean­
ing of Article 37(1). Consequently the Court 
appears to have abandoned the approach 
taken in the Miritz judgment (examination of 
a national measure connected with the 
operation of a State monopoly solely in the 
light of Article 37). A similar course was fol­
lowed in the subsequent judgments of 21 
June 1983, Commission v France,38 and 13 
December 1990, Commission v Greece,39 in 
which the national measures were held (para­
graphs 27 and 50 respectively) to be contrary 
to both Article 30 and Article 37(1). 
24. It seems, therefore, that in the Court's 
view a national measure may be contrary to 
Article 30 (and/or Article 34) as well as 
Article 37. However, I think that the border­
lines between Articles 30 and/or 34, on the 
one hand, and Article 37, on the other, are 
such that, where a question relates to the 
compatibility of a national measure with 
those provisions, it must be the subject of a 
37 — Caie 119/78 [1979] ECR 975. 
38 — Case 90/82 [1983] ECR 2011. 
39 — Case C-347/88 [1990] ECR 1-4747. 
I -5717 
O P I N I O N O F MR COSMAS — CASE C-157/94 
single examination which, for reasons of 
methodology, must begin with an analysis of 
the requirements for applying Article 37, 
that is to say ascertaining the extent to which 
the measure in question may be regarded as 
connected with the exercise by a State 
monopoly of a commercial character of its 
exclusive rights. 40 If the reply to that ques­
tion were in the negative, it would be logical 
to examine the matter solely in the light of 
Article 30 and/or Article 34. On the other 
hand, if it were found that the requirements 
for applying Article 37 were in principle sat­
isfied, it would then be necessary to consider 
whether the measure in question involved 
'discrimination between nationals of the 
Member States regarding the conditions 
under which goods are procured and mar­
keted', which is prohibited by the latter 
Article. 
25. That is precisely the dividing line 
between the respective fields of application 
of Article 37 on the one hand and Articles 30 
and 34 on the other. The Court has repeat­
edly observed41 that Article 37(1) has the 
object, in prohibiting 'discrimination 
between nationals of the Member States 
regarding the conditions under which goods 
are procured and marketed', of removing, by 
the end of the relevant transitional period, 42 
all obstacles to the free movement of goods 
which may arise from the existence in the 
Member States of State monopolies of a 
commercial character, and of maintaining in 
this way normal conditions of competition 
between the economies of the Member 
States. As the case-law clearly shows, 43 some 
of the greatest obstacles of this kind are 
national measures inseparably connected 
with the existence of such State monopolies 
which constitute quantitative restrictions on 
imports or exports, or measures having 
equivalent effect within the meaning of those 
40 — See Case 120/78 Rewe-Zentrale [1979] ECR 321, paragraph 
7; Case 86/78 Peureux I [1979] ECR 897, paragraph 35; 
Case 118/86 Nertsvoederfabriek Nederland [1987] ECR 
3883, paragraph 7; Joined Cases C-78/90 to C-83/90 
Compagnie Commerciale de l'Ouest and Others [1992] 
ECR 1-1847, paragraph 36; and Case C-387/93 Banchero II 
[1995] ECR 1-4663, paragraph 29. 
41 — See Manghera, cited in footnote 36 (paragraph 9), and 
Miritz, cited in footnote 35 (paragraph 8), and Case 91/78 
Hansen II [1979] ECR 935, paragraph 13; Case 78/82 Com­
mission v Italy [1983] ECR 1955, paragraph 11; Commission 
v Greece, cited in footnote 39 (paragraph 42), and Banchero 
II, cited in the preceding footnote (paragraph 27). 
42 — As the Court observed in Hansen II, cited in footnote 41 
(paragraph 8), Article 37 did not cease to be operative at the 
end of the transitional period within which the progressive 
adjustment of national monopolies of a commercial charac­
ter was to be carried out, but continues to be, even after 
that period, the sedes materiae in relation to the prohibition 
on retaining or introducing measures, inherent in those 
monopolies, which constitute 'discrimination regarding the 
conditions under which goods are procured and marketed'. 
So far as the French Republic, the Italian Republic and the 
Kingdom of the Netherlands are concerned, the transitional 
period ended on 31 December 1969 (Article 8 of the Treaty 
establishing the European Economic Community, now 
Article 7 or the Treaty establishing the European Commu­
nity). 
With regard to Spain, Article 48 of the Act of Accession 
provided as follows: 
' 1 . Without prejudice to paragraphs 2 and 3 of this Article, 
the Kingdom of Spain shall, from 1 January 1986, progres­
sively adjust State monopolies of a commercial character 
within the meaning of Article 37(1) of the EEC Treaty, 
bearing in mind, where appropriate, Article 90(2) of the 
EEC Treaty, so as to ensure that by 31 December 1991 at 
the latest no discrimination regarding the conditions under 
which goods are procured and marketed exists between 
nationals of the Member States. [...] 
2. The Kingdom of Spain shall, from 1 January 1986, abol­
ish all exclusive export rights. 
3. With regard to products indicated in the list appearing in 
Annex V, the exclusive import rights shall be abolished not 
later than 31 December 1991. The abolition of these exclu­
sive rights shall be made by progressively opening, from 1 
January 1986, import quotas for products from the present 
Member States. [...] 
The Kingdom of Spain shall increase the quota volumes in 
the manner set out in the annex referred to in the first sub­
paragraph. [...] 
4. [.·.]' 
Electricity is not included in the list of products in Annex 
V to which Article 48(3) refers. 
43 — See Manghera, cited in footnote 36 (paragraph 9), Rewe-
Zentrale des Lebensmittel-Großhandels, cited in footnote 
31 (paragraph 26), Peureux I, cited in footnote 40 (para­
graph 30), Commission v Italy, cited in footnote 41 (para­
graph 11), and Commission v Greece, cited in footnote 39 
(paragraph 42). 
I -5718 
COMMISSION v NETHERLANDS 
terms in Articles 30 and 34. ^ Consequently, 
if it is shown that the national measure in 
question is a quantitative restriction or a 
measure having equivalent effect, it is not 
only contrary to Articles 30 or 34, but also 
ipso facto infringes Article 37. 
26. There is only one way of ensuring that a 
measure of that kind does not thus automati­
cally fall within the prohibition laid down by 
Article 37(1), and that is to show that the 
measure is justified on one of the grounds set 
out in Article 36 of the Treaty. In my view 
that follows from the need for the chapter of 
the Treaty of which Article 37 forms part, 
concerning the elimination of quantitative 
restrictions, to be logically consistent. Other­
wise, a national measure which, despite being 
a quantitative restriction or measure having 
equivalent effect, could be based on one of 
the grounds set out in Article 36, would 
infringe the Treaty merely because it was 
connected with the operation of a State 
monopoly. However, no possible interpreta­
tion can serve as a basis for the view that 
such a measure may be covered by two dif­
ferent sets of rules, depending on the exist­
ence or otherwise of a connection with a 
State monopoly. I believe that my view also 
conforms with the Court's case-law. In the 
Commission v Greece judgment cited above 
(footnote 39), the declaration that Greece 
had failed to fulfil its obligations under 
Article 37(1) (paragraph 50) followed the 
Court's rejection (paragraphs 47 to 49) of the 
defendant State's argument that the mainte­
nance of the measure in question (which, as 
is clear from paragraphs 42 to 46, was, in the 
Court's view, also contrary to Article 30) 
was justified on grounds of public security, 
that is to say, grounds included in the list in 
44 — To say that measures constituting quantitative restrictions 
or measures having equivalent effect within the meaning of 
those terms in Articles 30 and 34 necessarily amount to 
'discrimination regarding the conditions under which goods 
are procured and marketed' for the purpose of Article 37(1) 
appears obvious with regard to measures which distinguish 
directly between imported and national products. Does the 
same apply Ín relation to measures which, although cover­
ing imported and national products alike, are considered, in 
accordance with paragraph 5 of the judgment in Case 8/74 
Dassonville [1974] ECR 411, as measures having an effect 
equivalent to quantitative restrictions on imports because 
they are capable of hindering, although only indirectly or 
potentially, intra-Community trade? 
An affirmative reply to that question is supported not only 
by Article 37(2) and (3), which show that there is a direct 
connection between the prohibition of 'discrimination 
regarding the conditions under which goods are procured 
and marketed' and all the prohibitions imposed by Articles 
30 and 34, but is also the only reply which fulfils the pur­
pose of Article 37(1), which is intended, as I have said in 
the main body of this opinion, to ensure observance of the 
basic rule of the free movement of goods by eliminating all 
obstacles connected with the operation of national 
monopolies of a commercial character. From that view­
point, it is noteworthy that in Commission v Italy, cited in 
footnote 41, which was given on an application by the 
Commission seeking a declaration that the retention of a 
national measure was contrary to Article 37, the Court, 
after showing that the measure in question applied without 
distinction to imported and national products, went on to 
consider (paragraph 12 et seq.) not only whether the meas­
ure could, in spite of its said character, entail discrimination, 
but also whether, in general, it could 'distort competition 
by restricting imports of [...] products, thereby impeding 
trade within the Community': see paragraph IIIB of the 
opinion of Advocate General Rozès in that case. 
However, quantitative restrictions and measures having 
equivalent effect are not the only 'discrimination regarding 
the conditions under which goods are procured and mar­
keted', prohibited by Article 37(1). As the series of judg­
ments cited in point 19 et seq. of this opinion show, the 
prohibition may extend to measures (provided that they are 
intrinsically connected with the specific operation of a 
national monopoly of a commercial character) such as the 
imposition of customs duties or charges within the meaning 
of Article 12 (see the Moritz judgment, cited in footnote 35) 
or the introduction of fiscal discrimination within the 
meaning of Article 95 of the Treaty (see Peureux / , cited in 
footnote 40) and any other national measure, although it 
may not fall within the ambit of another provision of the 
Treaty (see Rewe-Zentrale des Lebensmittel-Großhandels, 
cited in footnote 31, in particular paragraph 21). 
Therefore, Article 37(1) performs two functions: firstly, it 
makes it clear beyond doubt that the prohibitions laid 
down in the fundamental provisions of the Treaty, such as 
Articles 12, 30, 34 and 95, apply even to measures con­
nected with the operation of national monopolies and, sec­
ondly, it imposes a general prohibition on all discrimination 
which may arise from the operation of such monopolies. 
I -5719 
OPINION OF MR COSMAS — CASE C-157/94 
Article 36.45 Nevertheless, in my opinion, 
the latter article should not be relied upon to 
justify 'discrimination regarding the condi­
tions under which goods are procured and 
marketed' if such discrimination does not 
involve a quantitative restriction or measure 
having equivalent effect for the purpose of 
Articles 30 and 34. ^ To take the opposite 
approach would conflict with the need, 
which is repeatedly confirmed by the case-
law, to construe strictly Article 36 which, by 
laying down exceptions to the fundamental 
rule of the free movement of goods, cannot 
justify the imposition of measures other than 
those referred to in Articles 30 and 34. 47 
27. Taking the approach outlined above, I 
shall consider firstly whether the exclusive 
rights at issue are inseparably connected with 
the operation of State monopolies of a com­
mercial character (see section (bb) below) 
and then whether such rights constitute dis­
crimination between nationals of Member 
States regarding the conditions under which 
goods are procured and marketed (see sec­
tion (cc) below). At that second stage I shall 
deal firstly (see section (cc)(l)) with the 
question whether such exclusive rights 
amount to quantitative restrictions or mea­
sures having equivalent effect and then (see 
section (cc)(2)) with the question whether 
such measures may be justified on the basis 
of Article 36 of the Treaty. 
(bb) Are the rights at issue connected with 
the specific operation of State monopolies of 
a commercial character? 
28. It is clear from Article 37(1) itself that, in 
using the phrase 'State monopolies of a com­
mercial character', the article applies to situ­
ations in which the national authorities are in 
a position to control or supervise imports 
and exports between Member States, or even 
to influence them through a body established 
for that purpose or a monopoly delegated by 
the State to a third party. 48 Consequently a 
'State monopoly of a commercial character' 
must consist of two elements: 
(a) an organic element, which may consist 
either in the constitution, by a sovereign 
State measure and in any legal form, 49 of 
an ad hoc 'body' with monopoly rights 
which most typically take the form of 
various exclusive rights,50 or in the grant 
45 — See point 5 of the Opinion of Advocate General Roemer in 
Case 82/71 SAIL [1972] ECR 119. 
46 — See examples of such measures in footnote 44. 
47 — See Case 46/76 Bauhuis [1977] ECR 1, paragraph 12; Case 
32/80 Kortmann [1981] ECR 251, paragraph 11; Case 29/87 
Dansk Denkamt [1988] ECR 2965, paragraph 32; and 
Case C- l l l /89 Bakker Hillegom [1990] ECR 1-1735, para­
graph 8. 
48 — See Case 30/87 Bodson [1988] ECR 2479, paragraph 13; 
Almelo (cited in footnote 23), paragraph 29, and Banchero 
11 (cited in footnote 40), paragraph 26. 
49 — The very general nature of the term 'body' shows that 
Article 37(1) must be construed in such a way as to, cover 
- all the organizational forms of State monopolies in the 
Member Sutes, irrespective of the legal form conferred 
upon them by national law (see the Opinion of Advocate 
General Lagrange in Costa v ENEL, cited in footnote 22, 
and paragraphs 32 and 33 of the Opinion of Advocate Gen­
eral Da Cruz Vilaça in the Bodson case, cited in the preced­
ing footnote). 
50 — With regard to the nature of exclusive rights such as, first 
and foremost, monopoly rights, see Rewe-Zentrale, cited in 
footnote 40, paragraph 7. 
I - 5720 
COMMISSION v NETHERLANDS 
of rights of that kind to an entity of 
another form such as, for example, a pri­
vate undertaking or a territorial public 
body; 5I 
(b) a functional element, consisting in the 
capacity of the national authorities to 
influence intra-Community trade by 
means of the abovementioned 'bodies' or 
entities, where such influence may, in 
accordance with the second subpara­
graph of Article 37(1), consist in control­
ling or supervising, in law or in fact, 
imports or exports between Member 
States, or any other type of direct or 
indirect influence, provided that it is 
appreciable. In order for such influence 
to be possible, the 'bodies' or other enti­
ties must, according to the Costa v 
ENEL judgment (cited in footnote 22), 
'have as their object transactions regard­
ing a commercial product capable of 
being the subject of competition and 
trade between Member States and [...] 
must play an effective part in such trade'. 
Are these two elements present in the cases 
now before the Court and, if so, can the 
exclusive rights in question be considered 
inherent in State monopolies of a commercial 
character existing in the defendant States? 
(i) Netherlands 
29. In the Netherlands Article 34 of the Elek­
triciteitswet of 16 November 1989 regulat­
ing the generation, import, transmission and 
sale of electricity {Staatsblad 535, 'EW'), 
provides as follows: 
' 1 . Only the company designated for that 
purpose shall be authorized to import elec­
tricity intended for public distribution. 
2. Paragraph 1 shall not apply to the import 
of electricity of under 500 V.' 
Article 37 of the same Law also prohibits the 
supply of electricity which has not been 
imported into the country by the undertak­
ing referred to in Article 34(1). 
NV Samenwerkende Elektriciteitsproduktie-
bedrijven ('SEP') was designated by the Min­
isterial Order of 20 March 1990 {Staatscou­
rant, 22 March 1990) as the undertaking with 
the right to import electricity for public dis­
tribution. 51 — Sec Bodson, cited in footnote 48, paragraph 13. 
I - 5721 
OPINION OF MR COSMAS — CASE C-157/94 
30. The Commission infers from the above-
mentioned provisions that SEP's exclusive 
right, to which the application against the 
Kingdom of the Netherlands refers, to 
import electricity for public distribution 
constitutes a State monopoly of a commer­
cial character for the purpose of Article 37(1) 
of the Treaty. 
31. The Netherlands Government contends, 
on the contrary, that there is no question of 
Article 37 of the Treaty being applied since: 
'The contested exclusive right is not a 
monopoly because, as Article 34(1) in con­
junction with Article 37(1) of the EW makes 
clear, final consumers also have the right to 
import electricity, provided that the electric­
ity which they import is intended solely for 
their own needs. 
Even if it were accepted that SEP's exclusive 
right constituted a "State monopoly", it 
would not in any event be a monopoly "of a 
commercial character" because SEP does not 
operate in accordance with commercial prin­
ciples.' 
32. These arguments are untenable. It is true 
that the abovementioned articles of the EW 
show that individual consumers may import 
electricity if it is intended for their own use. 
It is also clear from Article 47 of the EW 
that such consumers may, subject to certain 
conditions, transmit imported electricity 
through the existing grids which are in prin­
ciple intended for the public distribution ser­
vice. However, that does not mean that 
SEP's exclusive right is not a monopoly. The 
other undertakings, except SEP (and mainly 
the existing electricity distribution undertak­
ings, of which there are approximately 40, 
according to the defence), have no right 
•whatever to engage in a specific economic 
activity, that is to say, no right to 
import electricity for distribution to final 
consumers. 
33. Even if it were accepted that the import 
of electricity into the Netherlands should be 
considered as a whole, without taking 
account of whether imported electricity is 
intended for the importer's own consump­
tion or for distribution to final consumers, in 
any event SEP's exclusive right, because of 
its subject-matter, has such a decisive effect 
on imports that, even if that interpretation is 
accepted, it must be considered a monopoly. 
It seems to me obvious that for a consumer 
to consider meeting his requirements by 
means of the direct import of electricity, his 
consumption would have to be so large that, 
firstly, he could use it as a means of obtain­
ing an advantageous price and, secondly, the 
transmission costs could be amortized. I 
think it unlikely that there are many con­
sumers in that position and that, in practice, 
I - 5722 
COMMISSION y NETHERLANDS 
the great majority will have no alternative to 
obtaining supplies through the public grid. 52 
However, in that connection, since the 
subject-matter of SEP's exclusive right of 
importation is precisely electricity intended 
for public distribution, that right enables the 
national authorities of the Netherlands, 
through SEP, 'to influence appreciably' elec­
tricity imports and therefore that right is, in 
the final analysis, a State monopoly for the 
purpose of Article 37(1) of the Treaty. 53 
34. Furthermore, the Netherlands Govern­
ment's argument that SEP does not operate 
in accordance with commercial criteria has 
absolutely no bearing on the finding that the 
State monopoly in question is commercial. 
This finding is sufficiently justified (see para­
graph 28 above) by the fact that because the 
subject-matter of SEP's monopoly is the 
importation of a good such as electricity, that 
monopoly makes it possible to influence 
appreciably the intra-Community trade in 
question. 
35. For all the foregoing reasons, SEP's 
exclusive right to import electricity for 
public distribution in the Netherlands is a 
'State monopoly of a commercial character' 
which falls within the ambit of Article 37(1) 
of the Treaty. 
(ii) Italy 
36. In Italy the electricity industry was 
nationalized by means of Law N o 1643 of 6 
December 1962 (GURI N o 316, 12 Decem­
ber 1962), which established the Ente Nazio­
nale per l'Energia Elettrica ('ENEL'), a pub­
lic undertaking to which the industrial 
undertakings in the electricity sector were 
transferred. Article 1(1) of Law N o 1643 
assigned to ENEL the functions of the gen­
eration, import and export, transmission, 
transformation, distribution and sale of elec­
tricity throughout Italy, irrespective of its 
source. 
Subsequendy, ENEL's rights were clearly set 
out by Legislative Decree N o 342 of 18 
March 1965 (GURI N o 104, 26 March 1965), 
Article 20 of which expressly prohibits any 
undertaking other than ENEL from import­
ing, exporting and trading in electricity, and 
transmitting it for third parties. 
37. Likewise a number of provisions (Article 
133 et seq. of Consolidated Enactment 
52 — The Netherlands Government appears to agree. In the 
defence submitted to the Court, in which it argued that the 
abolition of the contested exclusive right would result in an 
increase in the cost of electricity generated in the Nether­
lands, which would be passed on to the distribution under­
takings and, through them, to final consumers, it indicated 
that, in spite of their statutory right to generate or import 
electricity direct, most consumers 'have no alternative with 
regards to the source of supply because of their low con­
sumption'. 
53 — See Commission v Greece, cited in footnote 39, in which the 
Court observed (paragraph 41) that a Member State's exclu­
sive right to import and market a quantity of petroleum 
products corresponding to 65% of the requirements of the 
domestic market gave that Sute power to exert an appre­
ciable influence on imports of petroleum products by virtue 
of its right with regard to the importation and its right with 
regard to the marketing of such products and therefore it 
was a Sute monopoly within the meaning of Article 37. 
I - 5723 
OPINION OF MR COSMAS — CASE C-157/94 
N o 1775 of 11 December 1933, as amended 
by Law N o 127 of 26 January 1942, and Law-
N o 606 of 19 July 1959) require an authori­
zation to be obtained to import or export 
electricity. The authorization is granted by 
the Ministry of Public Works after it has 
been shown that several requirements have 
been satisfied (including, in the case of 
imports, a shortfall in national production 
and, in the case of exports, a surplus in 
national production). The Commission states 
in its application (relying on figures said to 
have been supplied by the Italian Govern­
ment) that, when the application was lodged, 
ENEL had the right, under the authorization 
which was granted in 1989 and is due to 
expire on 31 December 1997, to import or 
export annually, from and to European 
countries bordering on Italy, up to 30 000 
TWh (1 TWh (terawatt-hour) = 1 000 mil­
lion KWh), subject to a tolerance of +20%. 
38. In those circumstances, ENEL's exclu­
sive rights to import and export electricity, at 
issue in the action brought by the Commis­
sion against the Italian Republic are the sub­
ject of a State monopoly of a commercial 
character for the purposes of Article 37 of 
the Treaty. The national authorities may, 
through the undertaking constituted by law 
and enjoying those exclusive rights, control 
imports and exports of electricity from and 
to other Member States. 
(iii) France 
39. In France, Article 1 of Law N o 46-628 
of 8 April 1946 on the nationalisation of 
electricity and natural gas QORF, 9 April 
1946, 'the 1946 Law') provides as follows: 
'From the publication of this Law, the fol­
lowing shall be nationalized: 
1. the generation, transmission, distribution, 
import and export of electricity; 
2. the production, transmission, distribution, 
import and export of natural fuel gas.' 
Articles 2 and 3 of the Law entrust manage­
ment of the nationalized electricity and natu­
ral gas undertakings to public bodies of an 
industrial and commercial nature called Elec­
tricité de France (EDF), Service National, 
and Gaz de France (GDF), Service National 
(hereinafter 'EDF' and 'GDF ' respectively). 
40. It is clear from those provisions that the 
exclusive rights to import and export elec­
tricity and natural gas, which are the subject 
of this action against the French Republic 
and which are exercised by public bodies 
through which the national authorities are 
able to control intra-Community trade in 
such goods, constitute State monopolies of a 
I - 5724 
COMMISSION v NETHERLANDS 
commercial character falling within the 
ambit of Article 37 of the Treaty. 
(iv) Spain 
41. In Spain, Article 1(1) of Law 49/84, of 26 
December 1984, on the unified operation of 
the national electricity system (BOE Nos 
311 and 312, p. 5466, 'the 1984 Law') pro­
vides as follows: 
'The unified operation of the national elec­
tricity system over the high-voltage net­
works is a public State service, the purpose 
of which is to optimise the system as a whole 
on the basis of the functions and activities set 
out in Article 2 of this Law. The service shall 
be managed by a State company in accord­
ance with the present Law and the provi­
sions adopted for its implementation.' 
Article 2(1) of the Law specifies the func­
tions and activities comprising the public ser­
vice, which include: 
'[...] 
(e) to operate and maintain [..] all interna­
tional connection facilities [...]; 
[...] 
(i) to engage in such international trade as 
is considered appropriate in order to 
ensure the supply of electric energy, to 
reduce production costs on a national 
scale or, for reasons of national interest, 
- to allocate to each undertaking its share 
of such international trade and monitor 
the conduct thereof.' 
These functions and activities were assigned 
to a State corporation called Red Electrica de 
España ('Redesa') by Royal Decree 91/85, of 
23 January 1985 (BOE N o 24, p. 448, 'the 
1985 Royal Decree'), adopted pursuant to 
the 1984 Law. 54 
42. According to the Commission, it is quite 
clear from the abovementioned provisions of 
the 1984 Law that in Spain there is a State 
monopoly of a commercial character for the 
purposes of Article 37 of the Treaty because, 
under those provisions, the import and 
export of electricity are the subject of exclu­
sive rights granted to the State corporation 
Redesa, through which the national authori­
ties control intra-Community trade in elec­
tricity. 
54 — As the Commission observes in its reply, Law N o 40/94 of 
30 December 1994, regulating the National Electricity Sys­
tem (BOE N o 313, 31 December 1994) was published after 
the Commission brought this action against the Kingdom 
of Spain. That Law, which came into force on 20 January 
1995, repealed the 1984 Law. Clearly the new measure has 
no effect on the present action, which has been brought 
under Article 169 of the Treaty and seeks a declaration that 
the State in question has failed to fulfil its obligations and 
had not remedied that situation within the time-limit 
allowed by the Commission in the reasoned opinion. 
Therefore, when examining the Commission's present 
application against the Kingdom of Spain, regard must be 
had to the national legal system in force when the period 
allowed to the defendant State to comply with the reasoned 
opinion expired (sec Commission v Greece (cited in foot­
note 39), paragraph 40, and Case C-105/91 Commission v 
Greece [1992] ECR 1-5871, paragraph 21). 
I - 5725 
OPINION OF MR COSMAS — CASE C-157/94 
43. In reply, the Kingdom of Spain contends 
that the present action for a declaration that 
the exclusive rights in Spain to import and 
export electricity are contrary to Articles 30, 
34 and 37 of the Treaty, and to Article 48 of 
the Act of Accession, is based in its entirety 
on a false assumption, since the provisions 
referred to by the Commission do not confer 
upon Redesa exclusive rights to import and 
export electricity. In particular, the defendant 
State makes the following submissions: 
— The Royal Decree of 12 December 1924 
laid down that the supply of electricity 
should be deemed a public service. The 
only consequence of this which is still in 
effect is that electricity tariffs are deter­
mined by the State authorities, as pro­
vided for by the Royal Decree. Further­
more, neither the generation nor the 
distribution of electricity was brought 
within the exclusive remit of the State. 
They are still activities carried on by 
numerous undertakings subject to a sys­
tem of administrative authorization. 
— The presence of a large number of elec­
tricity undertakings led to problems with 
regard to, inter alia, security of supply 
for consumers and the emergence of large 
surpluses the management of which 
increased the production cost. To resolve 
these problems, the 1984 Law classified 
the 'unified operation of the national 
electricity system through high-voltage 
grids' (Article 1(1)) as a public service 
and assigned its management to a State 
corporation. According to the explana­
tory memorandum to the Law, to which 
the defendant State refers in detail, the 
legislature did not intend, in enacting that 
measure, to entrust to one State corpora­
tion all the activities which until then had 
been carried on by the private undertak­
ings generating and distributing electric­
ity. The intention was, without affecting 
the system of ownership of the latter or 
their freedom to use and manage their 
installations, only to establish a system 
whereby each and every one of them 
would interact with the State corporation 
in order that, through the introduction of 
unified criteria of economic efficiency 
and management of the generation and 
distribution cycle, it would be possible to 
ensure the best method of supply and the 
success of the energy policy of each Gov­
ernment. 
— For the purpose of the 'unified operation' 
system, various powers were conferred 
upon the abovementioned State corpora­
tion, including: 
(1) the operation and maintenance of a 
high-voltage grid (transmitting elec­
tricity from the point of generation 
to the point of reception by distribu­
tion undertakings, which supply it, 
through low-voltage grids, to the 
final consumers), and the operation 
and maintenance of the parts of the 
high-voltage grid which permit con­
nection with grids in other countries 
[Article 2(1 )(e) of the 1984 Law]; 
I - 5726 
COMMISSION v NETHERLANDS 
(2) powers relating to international trad­
ing in electricity [Article 2(1 )(i) of 
the same Law], by virtue of which 
Redesa, in the opinion of the Spanish 
Government, only has an opportu­
nity to carry out transactions in this 
sector. 
Those transactions may consist in 
imports and exports of electricity by 
Redesa itself, where this is consid­
ered conducive to ensuring supply or 
to reducing production costs of elec­
tricity at national level, or in the allo­
cation, on grounds of national inter­
est, of the precise share of each 
undertaking in international trade, 
and also in supervising the imple­
mentation of decisions in that area. 
According to the Spanish Govern­
ment, Redesa's power to import and 
export electricity, if it sees fit, does 
not affect the right of private under­
takings to do the same: their right 
can only be limited on 'grounds of 
national interest', when the State cor­
poration allocates the share of each 
undertaking in international trade in 
electricity. Nevertheless, the Spanish 
Government adds that an implied 
requirement, for private undertak­
ings to be able to exercise such right, 
is that in each case fulfilment of the 
technical prerequisites must be veri­
fied so as to ensure that the electric­
ity import or export transaction con­
cerned (which can only be carried 
out through the international inter­
connection equipment of the high-
voltage grid, for the operation of 
which Redesa is responsible under 
the 1984 Law) does not endanger the 
operation of the electricity system. 
On the basis of those considerations, the 
Spanish Government claims that neither a 
literal nor a systematic interpretation of the 
provisions relied upon by the Commission 
can support the latter's contention that 
Redesa has exclusive rights to import and 
export electricity. 
44. Indeed, I find the Commission's argu­
ments on this point unconvincing. 
45. The Commission's claim that Redesa has 
exclusive rights to import and export elec­
tricity, although there is no provision 
expressly conferring such rights upon the 
State corporation, is based mainly on the fact 
that, firstly, Redesa manages the 'unified 
operation' of the national electricity system, 
which is described as a public service and, 
secondly, that it operates the country's high-
voltage grid, including all the international 
connection facilities of the grid. However, I 
do not think that either of those factors suf­
ficiently supports the conclusion that Redesa 
has exclusive rights to import and export 
electricity, having regard in particular to the 
defendant State's clarification of the exact 
meaning of the term 'unified operation' and 
to the underlying objective of the 1984 Law. 
46. As the Spanish Government points out 
(without being challenged by the Commis-
I - 5727 
O P I N I O N O F MR COSMAS — CASE C-157/94 
sion), exclusive rights to generate and dis­
tribute electricity did not exist in Spain 
before the 1984 Law was enacted, nor have 
they existed since then. The fact that the 
'unified operation' of the national electricity 
system was entrusted to Redesa can under 
no circumstances be construed as amounting 
to covert nationalization of the system as a 
whole or the grant to the State corporation 
of exclusive rights to carry on all the associ­
ated activities without exception, including 
importing and exporting electricity. 55 
47. Secondly, the fact that the operation and 
maintenance of the international connection 
facilities of the national transmission system 
were entrusted to Redesa alone is not suffi­
cient to conclude necessarily that it was 
granted exclusive rights to import and export 
electricity, because the aforementioned task 
does not make it technically impossible for 
other undertakings to import and export 
electricity.56 In addition, Article 2(1 )(i) of 
the 1984 Law provides that Redesa may, sub­
ject to certain conditions, take steps to regu­
late the exact shares of the other undertak­
ings in trade in international electricity 
which implies, without a shadow of doubt, 
that in principle they may engage in activities 
of that kind. 57 
48. To show the existence of the exclusive 
rights in question, the Commission also 
alleges that the Spanish Government has not 
cited a single specific case of a private under­
taking which has imported or exported elec­
tricity to or from Spain and adds that, 
according to the information it has obtained, 
there is no undertaking, save Redesa, which 
imports or exports electricity. On that point, 
it seems to me sufficient to observe that the 
absence of information concerning imports 
or exports of electricity does not in itself 55 — As the Spanish Government observes in its defence, the 
Council of State (which, pursuant to Article 107 of the 
Spanish Constitution, is the Government's supreme advi­
sory body), in an opinion given at the request of the Span­
ish Government for the purposes of its reply to the Com­
mission's reasoned opinion, adopted the position that, in 
the absence of an express statutory provision, the 1984 Law 
could not be construed as conferring exclusive rights to 
import and export electricity. It appears indirectly from the 
Commission's application (see paragraph 36) that the 
Council of State's opinion seems to be based on the prin­
ciple of interpretation that a statutory provision must be 
construed, if the wording so permits, in a manner compat­
ible with the formal provision of higher status regulating 
the matter in question. In this case, the Council of State 
(according to the Commission's application) seems to have 
accepted that, according to the Spanish Constitution, ín 
particular Article 38 (which recognizes freedom of enter­
prise) and Article 128 (which provides for the power to 
reserve certain activities for the public sector, provided that 
this is done by statute), the grant of exclusive rights, which 
interferes with the abovementioned constitutional freedom 
and with the reservation of an activity for the public sector, 
cannot be inferred by means of interpretation, in the 
absence of an express statutory provision. On this point the 
Commission repeats its argument that, although the 1984 
Law made no express reference to the abovementioned 
exclusive rights, it reserved the import and export of elec­
tricity for the public sector (namely, Redesa). 
56 — In particular, it should be stressed that in the amended pro­
posal for a directive concerning common rules for the inter­
nal market in electricity (cited in footnote 10) Article 21, 
which relates to the free access of electricity producers and 
transmitters to the distribution system, coexists with 
Article 9, which relates to the 'transmission system opera­
tor' who, under the latter provision, will not only 'be 
responsible for managing energy flows on the system' and 
'maintain a secure, reliable and efficient electricity system', 
but may also refuse access to the system if the requirements 
of Article 21(3) are not fulfilled. Furthermore, it is signifi­
cant that, in the action against the French Republic, the 
Commission recognizes the need for centralized supervi­
sion of the national electricity system and adds that 'the 
abolition of exclusive import and export rights would not 
prevent the Member States from entrusting to the system 
operator certain functions of centralized supervision' (see 
paragraph 29 of the application in that case). 
57 — O n the other hand, see Case 173/83 Commission v France 
[1985] ECR 491, paragraph 7, where the Court found that 
the national provision laid down 'an implicit yet clear pro­
hibition*. 
I - 5728 
COMMISSION v NETHERLANDS 
justify the presumption that exclusive rights 
exist. 58 
Furthermore, if, with regard to the lack of 
information, the Commission is in reality 
alleging that, although there is no express 
provision in the 1984 Law granting Redesa 
exclusive rights to import and export elec­
tricity, in the present case the requirements 
for applying Article 37 of the Treaty are ful­
filled because the State authorities are in a 
position, through the State corporation, to 
control de facto the intra-Community trade 
in question, the Commission's argument 
would be untenable even on that basis. I 
think that, to show de facto control by the 
Spanish authorities of imports and exports of 
"electricity for the purposes of the second 
subparagraph of Article 37(1) of the Treaty, 
it is not sufficient for the Commission 
(which bears the burden of proof) to rely on 
the mere lack of information concerning 
trade in electricity: it would be necessary to 
adduce evidence to show at least that the rel­
evant provisions of the 1984 Law have been 
used as a basis for measures (for example, the 
refusal of requests) by means of which 
undertakings other than Redesa have simply 
been prevented from importing or exporting 
electricity. 
49. Finally, the Commission claims that the 
Spanish Government, in its reply to the rea­
soned opinion, stated that the Draft Law, 
which was then being debated (and which 
subsequently replaced the 1984 Law after the 
present action was brought: see footnote 54), 
expressly provided that undertakings other 
than Redesa could import and export elec­
tricity, subject to certain requirements and 
restrictions. The Commission's reasoning 
here seems to me to be particularly weak. 
The fact that a subsequent provision 
expressly confers a right to pursue an econ­
omic activity, at the same time laying down 
the requirements for that activity, does not 
justify the contrary inference that under the 
previous system that activity was entirely 
prohibited when, as in this case, that conclu­
sion is not supported by other evidence. 
50. In view of the foregoing, I consider that 
the Commission has not shown that in Spain 
there are exclusive rights to import and 
export electricity. Mainly on that ground, 
therefore, the application for a declaration 
that, by introducing such rights, the King­
dom of Spain has failed to fulfil its obliga­
tions under certain articles of the Treaty and 
Article 48 of the Act of Accession should be 
dismissed in its entirety. 59 
58 — As has been said [see Case C-62/89 Commission v France 
[1990] ECR 1-925, paragraph 37], 'in proceedings brought 
under Article 169 of the Treaty the Commission is required 
to prove the allegation that the obligation has not been ful­
filled and may not rely on any presumption in order to 
show that a Member State has failed to fulfil its obligation 
under Community law'. 
59 — The question whether Article 2(l)(i) of the 1984 Law con­
tains a measure having an effect equivalent to a quantitative 
restriction on imports and exports, in so far as it enables 
Redesa, subject to certain conditions, to allocate the exact 
share of each undertaking in international trade in electric­
ity, cannot be examined in the present proceedings, which 
have the object of ascertaining how far the Kingdom of 
Spain has failed to fulfil its obligations by introducing 
exclusive rights to import and export electricity. Examina­
tion of that question would amount to an inadmissible 
alteration of the factual basis of the infringement alleged 
against the defendant State, as set out in the reasoned opin­
ion (see the case-law cited in footnote 13). 
I - 5729 
O P I N I O N O F MR COSMAS — CASE C-157/94 
(cc) Do the rights at issue amount to dis­
crimination between nationals of Member 
States regarding the conditions under which 
goods are procured and marketed? 
51. For the reasons I have already given (see 
paragraph 24 et seq. above), I shall now con­
sider whether the exclusive rights in question 
constitute quantitative restrictions or mea­
sures having equivalent effect to restrictions 
on imports (see section 1 below) and then 
whether such rights may be justified on the 
basis of Article 36 of the Treaty (see section 
2 below). 
(1) Do the contested rights constitute quan­
titative restrictions or measures having 
equivalent effect? 
(i) Exclusive import rights 
52. According to the Commission, the 
exclusive rights in the defendant States 60 to 
import electricity and (in the case of France) 
natural gas may create a barrier to trade in 
the Community and may therefore be mea­
sures having effects equivalent to quantitative 
restrictions on imports for the purpose of 
Article 30 of the Treaty because: 
— they prevent producers in other Member 
States from selling electricity or natural 
gas to persons in the defendant States 
other than those vested with the con­
tested rights, and 
— they prevent undertakings in the defen­
dant States (for example, distributors) 
and (in the case of Italy, France and 
Spain) consumers from choosing a sup­
plier of electricity or natural gas who is 
established in another Member State. 
53. I think there is firm support in the 
Court's case-law for the Commission's view. 
54. The earliest of those cases is Manghera 
(cited in footnote 36). That judgment gave a 
preliminary ruling on certain questions, the 
first of which was whether, in connection 
60 — It should be observed that, for the reasons given in point 41 
et seq., in my opinion exclusive rights to import and export 
electricity do not exist in Spain. However, in the following 
discussion, for the sake of completeness, I shall assume that 
the exclusive rights referred to by the Commission's appli­
cation actually exist in all the defendant States. 
I - 5730 
COMMISSION v NETHERLANDS 
with the 'adjustment' of State monopolies of 
a commercial character, required by Article 
37(1) of the Treaty, exclusive rights to import 
from other Member States should be abol­
ished. The Court replied in the affirmative 
(paragraph 13), after observing that the 
object of Article 37(1) is to ensure compli­
ance with the fundamental rule of the free 
movement of goods throughout the common 
market, 'in particular by the abolition of 
quantitative restrictions and measures having 
equivalent effect in trade between Member 
States' (paragraph 9), that 'this object would 
not be attained if, in a Member State where a 
commercial monopoly exists, the free move­
ment of goods from other Member States 
similar to those goods with which the 
national monopoly is concerned were not 
ensured' (paragraph 10), and that, accord­
ingly, an exclusive right to import manufac­
tured goods granted to a monopoly of a 
commercial character constitutes, in respect 
of Community exporters, discrimination 
prohibited by Article 37(1) of the Treaty 
(paragraph 12). The sequence of steps in that 
reasoning leaves hardly any doubt, in my 
opinion, that an exclusive import right, in 
conjunction with a State monopoly of a 
commercial character, constitutes, according 
to the Manghera judgment, discrimination 
prohibited by Article 37(1), precisely because 
it is a measure having an effect equivalent to 
a quantitative restriction on imports.6I In 
that connection it is noteworthy that, in his 
Opinion in Manghera, Advocate General 
Warner was in favour of construing Article 
37 as requiring the abolition of exclusive 
import rights on the ground, inter alia, that 
it prohibits not only actual but also potential 
discrimination, which in his view made it 
necessary to interpret Article 37 in confor­
mity with Dassonville (cited in footnote 44) 
with regard to the definition of 'measure 
having equivalent effect'. 62 
55. If the precise meaning of the Manghera 
judgment is that exclusive import rights are 
measures having an effect equivalent to 
quantitative restrictions on imports, that 
assessment is by no means an isolated 
instance. On the contrary, it is in line with 
the Court's settled case-law that measures 
which are capable of hindering, directly or 
indirecdy, actually or potentially, intra-
Community trade include any national pro­
vision or practice which results in imports 
being channelled in such a way that only cer­
tain traders can carry them out, whereas oth­
ers are prevented from doing so. 63 
61 — It seems to me that Advocate General Rozès construed in 
the same way the relevant paragraphs of Manghera in her 
Opinion in Commission v Italy (cited in footnote 41). 
62 — The important question on which a preliminary ruling was 
given in Manghera was whether, in accordance with Article 
37 of the Treaty, 'the trade monopoly should have been 
reorganized in such a way as to eliminate even the possibil­
ity of any discrimination being practised against Commu­
nity exporters, with the consequential extinction of the 
exclusive right to import [...]' (emphasis added). 
63 — See the general wording of the judgment in Case 104/75 De 
Peiįper [1976] ECR 613, paragraph 13. Sec also Case 94/79 
Vriend [1980] ECR 327, in particular paragraph 10, to the 
effect that national rules whereby a Member State, directly 
or through the intermediary of bodies established or 
approved Dy an official authority, prohibits, inter alia, the 
importation of certain products by persons not belonging 
to one of the said bodies are incompatible with Article 30 
of the Treaty. 
I-5731 
O P I N I O N O F MR COSMAS — CASE C-157/94 
56. Nevertheless, it could be argued that 
the conclusion reached by the Court in 
Manghera is connected with the fact that the 
holder of the exclusive right to import 
tobacco, which was the subject of the 
question before the Court, had also been 
given the exclusive right to manufacture 
the same product in the Member State in 
question. Therefore the adverse effect of the 
exclusive import right on trade in the 
Community was attributable, from that 
viewpoint, to the 'natural' tendency of the 
holder of exclusive rights to promote trade 
in his own products rather than in imported 
products. I must say that this reading of the 
Manghera judgment is not supported by the 
wording of the judgment (no part of it 
appears to uphold the view that the Court's 
attitude would be different if the holder of 
the exclusive import right did not also 
possess the exclusive right of manufacture) 
or by the approach taken in the case-law 
cited in paragraph 55 relating to national 
measures restricting the category of persons 
who can import goods from other Member 
States. 
57. In any case, in my opinion, there has 
been no justification for such doubts since 
the judgment in France v Commission. M The 
French Republic brought an action for the 
annulment of certain provisions of Commis­
sion Directive 88/301/EEC,65 which was 
adopted under Article 90(3) of the Treaty. 
The provisions in question included Article 2 
of the Directive, whereby Member States 
which have granted special or exclusive 
rights to undertakings for, inter alia, the 
import of telecommunications terminal 
equipment are to 'ensure that those rights are 
withdrawn'. It is clear from the preamble to 
the directive that Article 2 was adopted 
because, according to the Commission, the 
retention of such rights would be inconsis­
tent with, inter alia, Article 30 of the Treaty 
since it 'can, and often does, lead to restric­
tions on imports from other Member States' 
(see the third recital in the preamble). France 
claimed that Article 2 should be annulled 
because, inter alia, the Commission had mis­
takenly taken the view that the exclusive 
rights referred to by Article 2 were contrary 
to the Treaty. The Court, taking as its start­
ing point (paragraph 33) the classic formula­
tion of the Dassonville judgment (cited in 
footnote 44 above), stated that, on the con­
trary, the Commission was right to consider 
exclusive import (and marketing) rights in 
the telecommunications terminal sector to be 
incompatible with Article 30 of the Treaty 
because such rights 'are capable of restricting 
intra-Community trade' (paragraph 36). 
Among the reasons given by the Court was 
that the existence of such rights 'deprives 
traders of the opportunity of having their 
products purchased by consumers' (para­
graph 34), and that, because of the diversity 
and technical nature of the products con­
cerned, 'there is no certainty that the holder 
of the monopoly can offer the entire range of 
models available on the market, inform cus­
tomers about the state and operation of all 
the terminals and guarantee their quality' 
(paragraph 35). The Court thus recognized 
that the exclusive rights in question 
(which included exclusive import rights) 
restricted intra-Community trade, without 
taking any account of the fact that the hold­
ers of the exclusive rights in question also 
manufactured the products concerned. For 
the Court, it was sufficient that, on the 
64 — Case C-202/88 [1991] ECR 1-1223. 
65 — Commission Directive 88/301/EEC of 16 May 1988 on 
competition in the markets in telecommunications terminal 
equipment (OJ 1988 L 131, p. 73). 
I - 5732 
COMMISSION v NETHERLANDS 
supply side, such rights prevent traders from 
offering their products to all consumers 
without exception and, on the demand side, 
such rights deny consumers access to the full 
range of products available on the market in 
question. 
58. In view of that case-law, the exclusive 
rights to import electricity and natural gas to 
which the present actions refer must (leaving 
aside the fact that the bodies to which they 
were granted are also the producers of the 
products in question) 66 be regarded as mea­
sures having equivalent effect to quantitative 
restrictions on imports. By depriving pro­
ducers and distributors of the opportunity to 
offer the aforementioned products to all 
potential customers in the defendant States 
and by preventing those potential customers 
(simply the other side of the coin) from 
obtaining the products in question from the 
undertaking of their choice, such rights may 
adversely affect trade in the Community by 
restricting the category of persons who can 
take part in that trade. 
59. To counter that conclusion, the defen­
dant States contend, firstly, that the exclusive 
rights in question do not fall within the 
ambit of Article 30 of the Treaty because 
they do not have the object or effect of dis­
criminating between imported products and 
domestic products, since exactly the same 
commercial conditions (method of transmis­
sion and distribution, prices, etc.) apply to 
imported as to domestic electricity and natu­
ral gas. The Italian, French and Spanish Gov­
ernments consider, in particular, that in order 
to determine whether a national measure 
falls within the scope of Article 30 of the 
Treaty, the question whether the measure 
pursues the object of creating discrimination, 
or may by other means create it, has become 
a criterion of the greatest importance, in the 
wake of Keck and Mithouard, 6? according to 
which the application of national provisions 
restricting or prohibiting certain selling 
arrangements cannot hinder trade in the 
66 — As the documents in the file show, Redesa (the holder of 
the exclusive rights which, according to the Commission, 
exist in Spain) does not generate electricity. In the Nether­
lands, on the other hand, SEP, which has the exclusive right 
of importation in the Netherlands, may be regarded as an 
electricity generator, as appears from the pleadings of both 
parties (see paragraph 9 of the reply and paragraph 44 of 
the rejoinder). However, subject to certain conditions, dis­
tribution undertakings and individuals have a right to gen­
erate electricity. In Italy, the abovementioned provision of 
the 1962 Law on the nationalization of the electricity sector 
gave ENEL responsibility for, inter edia, the generation of 
electricity. Nevertheless, other entities (municipal undertak­
ings, undertakings generating electricity for their own use) 
are entitled to generate electricity. Finally, in France EDF 
generates electricity, but other entities may also do so 
(power stations with a capacity not exceeding 8 000 k Va, 
generation controlled by local administrative authorities 
using urban waste water as raw material, etc.). GDF does 
not produce natural gas. 67 — Joined Cases C-267/91 and C-268/91 [1993] ECR 1-6097, 
paragraph 16. 
I - 5733 
OPINION OF MR COSMAS — CASE C-157/94 
Community 'so long as those provisions 
apply to all relevant traders operating within 
the national territory and so long as they 
affect in the same manner, in law and in fact, 
the marketing of domestic products and of 
those from other Member States'. 
60. The paragraph cited from Keck and 
Mithouard concludes a line of reasoning 
which starts (paragraph 11) with the obser­
vation in Dassonville (cited in footnote 44) 
that any measure which is capable of directly 
or indirectly, actually or potentially, hinder­
ing intra-Community trade constitutes a 
measure having equivalent effect to a quanti­
tative restriction. On that basis, the Court, 
ruling on certain national legislation impos­
ing a general prohibition on resale at a loss, 
stated first (paragraph 12) that such legisla­
tion 'is not designed to regulate trade in 
goods between Member States' and then 
added (paragraph 15) that, as established by 
the case law beginning with Rewe-Zentral 
('Cassis de Dijon', cited in footnote 40 
above), national rules laying down require­
ments to be met by goods coming from 
other Member States are measures having 
equivalent effect, prohibited in principle by 
Article 30, even if such rules apply without 
distinction to all products. Finally, the Court 
stated that, provided the conditions set out 
in paragraph 15 of the judgment were ful­
filled, the application to products from other 
Member States of national provisions 
restricting or prohibiting certain selling 
arrangements is not such as to hinder 
directly or indirectly, actually or potentially, 
trade between Member States within the 
meaning of Dassonville. From that reasoning 
the French Government infers that (a) only 
two types of national measure (namely those 
relating to requirements to be met by 
imported products and those prohibiting or 
restricting certain selling arrangements) can 
raise the question of applying Article 30 of 
the Treaty, and (b) if the exclusive import 
rights in question can under no circum­
stances be regarded as coming within the 
first category of national measures, the ques­
tion whether they are measures having 
equivalent effect must be examined in the 
light of the criteria set out by the Court in 
Keck and Mithouard concerning provisions 
prohibiting or restricting certain selling 
arrangements. Therefore, if they apply in the 
same way to all traders and affect the mar­
keting of imported and domestic products in 
the same manner, they must be deemed con­
sistent with Article 30 of the Treaty. 
61. That argument cannot succeed, firstly 
because it overlooks the fact that Keck and 
Mithouard itself (paragraph 12) clearly 
shows that there is another type of national 
measure which may be described as a meas­
ure having equivalent effect, namely mea­
sures designed to regulate trade in goods 
between Member States. The criteria for 
determining whether or not such measures 
fall within the scope of Article 30 are not 
affected in any way by the Court's observa­
tions as to whether national provisions pro­
hibiting or restricting certain selling arrange­
ments are covered by Article 30. Although 
the Court took the view, for the reasons 
given in paragraph 17 of Keck and Mith­
ouard, that provisions of the latter kind can­
not in principle impede trade in the Commu­
nity, the question remains open as regards 
I - 5734 
COMMISSION v NETHERLANDS 
national measures relating directly to intra-
Community trade and it must be assessed on 
each occasion, even after Keck and Mith-
ouard, solely by reference to the definition 
of measures having equivalent effect, as for­
mulated in Dassonville. 68 Since the exclusive 
import rights in question relate directly to 
the conditions and requirements for the for­
eign trade of the defendant States and are 
measures 'designed to regulate trade in goods 
between Member States', the fact that they 
may (for the reasons given in point 58), at 
least potentially, have an adverse effect on 
intra-Community trade is sufficient to justify 
regarding them as measures having equiva­
lent effect to restrictions on imports, and it is 
not necessary to compare the circumstances 
under which trade is carried on in the 
imported products and in the domestic prod­
ucts, as the defendant States have argued 
without justification. 
62. There is likewise no foundation for the 
claim (raised, with certain variations, by all 
the defendant States) that the exclusive rights 
in question to import electricity do not 
restrict intra-Community trade in that sector 
because the bodies vested with the rights, 
being under an obligation to ensure the sup­
ply of electricity under the best possible 
economic conditions, import electricity 
whenever the need to do so is apparent from 
a comparison of the prices offered by foreign 
producers or distributors with the produc­
tion cost of domestic electricity. Although 
the holder of the exclusive right may import 
electricity when the prices offered are 
deemed favourable, that fact is not sufficient 
to neutralize the potential restrictive effect of 
that right when no other operator or con­
sumer 69 can make direct contact with opera­
tors in other Member States in order to 
decide, by reference to his own needs and 
capacity, whether it would be advantageous 
to import electricity. 
68 — Among the judgments subsequent to Keck and Mitkouard, 
see Case C-249/92 Commission v ludy [1994] ECR 1-4311, 
in which a national provision requiring prior authorization 
for all imports of certain goods was found contrary to 
Article 30 of the Treaty (paragraph 28). More important is 
Case C-323/93 Centre d'Insémination de la Crespelle 
[1994] ECR 1-5077, in which the Court, referring to Das­
sonville, stated (paragraph 29) that 'rules of a Member State 
which require private economic operators importing into its 
territory quantities of bovine semen from another Member 
Sute to store it, subject to a charge, in an authorized centre 
which enjoys an exclusive concession with regard to storage 
of the semen and insemination constitute such a barrier to 
imports. Since that requirement applies at the stage imme­
diately following importation ana imposes an economic 
burden on importers, it is liable to restrict the volume of 
imports'. In my opinion, this is also the logic behind the 
judgment in Joined Cases C-277/91, C-318/91 and 
C-319/91 Ligur Carni and Others [1993] ECR 1-6621, 
paragraphs 35 to 38, in which the Court, again referrine to 
Dassonville, stated that a national provision which requires 
operators importing fresh meat into the area of a municipal 
authority to use the municipal slaughterhouse for the trans­
port and delivery of the goods to the final destination of the 
premises of a local undertaking, may impede intra-
Community trade and therefore constitutes a measure hav­
ing equivalent effect. The fact that the said national provi­
sion also refers to goods brought into the municipal area 
from other parts of the same Member State does not, in my 
opinion, mean that it ceases to be a measure 'designed to 
regulate trade in goods between Member States' as it refers 
directly to the conditions under which goods could be 
imported into the municipality from other Member States. 
69 — As mentioned in point 29 et seq., in the Netherlands other 
consumers have a right to import electricity direct provided 
that it is intended solely for their own needs. SEP's exclu­
sive right of importation, with regard to electricity intended 
for public distribution, deprives the distribution undertak­
ings of the opportunity to import electricity direct. 
I - 5735 
OPINION OF MR COSMAS — CASE C-157/94 
63. The fact that this cannot be done also 
invalidates the claims that the exclusive 
import rights do not in practice affect the 
amounts of electricity and natural gas 
imported into the defendant States. Even if, 
as the Netherlands Government alleges, in 
1993 15% of the total demand for electricity 
in the Netherlands was covered by imports; 
even if, as the Italian Government alleges, 
Italy is the country 'which imports the largest 
amount of electricity in Europe, and even if, 
as the French Government claims, France is 
necessarily a large importer of natural gas 
because domestic production is insufficient, 
those circumstances do not change the 
important fact that exclusive import rights 
are of such a nature as to affect imports 
which could otherwise take place. 70 
64. The Italian Government also contends 
that, as the Court observed in ERT (cited in 
footnote 27), in order for an exclusive right 
to import a product the movement of which 
is closely connected with the supply of a ser­
vice to fall within the ambit of Article 30 of 
the Treaty, it is not sufficient to show that it 
may restrict intra-Community trade within 
the meaning of Dassonville, but it must also 
be shown that it results in discrimination 
between imported and domestic products. 
According to the Italian Government, that is 
precisely the effect of the exclusive right to 
import electricity because, even assuming 
that electricity may be regarded as a 'good' 
(which the Italian Government does not 
accept: see point 12 et seq. of this Opinion), 
it is any case a good the marketing of which 
depends so directly on the manner of trans­
mission that, ultimately, it is inseparable 
from the service supplied. The French Gov­
ernment argues along similar lines, taking the 
view that an exclusive right to import elec­
tricity is inherent in an exclusive right to 
transmit it. 
65. Does the ERT judgment have the impli­
cations attributed to it by the Italian and the 
French Governments? It finds, firstly (para­
graph 12), that Community law does not 
prevent the granting, as such, of a television 
monopoly for considerations relating to the 
public interest, although the manner in 
which the monopoly is organized or exer­
cised must not infringe the rules of the 
Treaty. On the question whether a television 
monopoly is contrary to the provisions of 
the Treaty relating to the free movement of 
goods, the Court held, as I have already said 
(paragraph 16), that the grant of an exclusive 
right to import (hire or distribute) material 
70 — The Court has consistently held that, to determine whether 
a measure has an effect equivalent to a quantitative restric­
tion on imports, 'it is not necessary to prove that the mea­
sures in question actually restrict imports of the products in 
question' (see Case 124/85 Commission v Greece [1986] 
ECR 3948, paragraph 7; Case 12/74 Commission v Ger­
many [1975] ECR 87, paragraph 14; Case 249/82 Commis­
sion v Ireland [1982] ECR 4005, paragraph 25; and Case 
16/83 Pronti [1984] ECR 1299, paragraph 20). 
I - 5736 
COMMISSION v NETHERLANDS 
and products necessary for exercising the 
exclusive right to supply a television broad­
casting service does not constitute a measure 
having an effect equivalent to a quantitative 
restriction unless the grant of those rights 
'resulted, directly or indirectly, in discrimi­
nation between domestic products and 
imported products to the detriment of the 
latter' (see paragraphs 15 and 16 of the judg­
ment). In my view, what the ERT judgment 
really means is that granting to the holder of 
an exclusive right to supply a service (which 
is not in itself contrary to Community law) 
an exclusive right to import goods necessary 
for that service is not, in principle, a measure 
which can have an adverse effect on the trade 
of the State in question with other Member 
States because in any case the activity for 
which those products must be imported is 
carried on by only one person (and, I repeat, 
without infringing Community law). In that 
case, the question of an infringement of 
Article 30 of the Treaty would only arise if, 
under the cover of the 'necessary' monopoly 
of imports, as described above, there was 
concealed discrimination in favour of domes­
tic products. However, in Italy and France 
the context of the exclusive right to import 
electricity is entirely different. The electricity 
imported by the undertakings holding exclu­
sive rights is certainly not intended for their 
consumption alone, but is intended for all 
undertakings and consumers in the Member 
State in question. Therefore the special con­
ditions which, in principle, result in the 
exclusive right of importation referred to in 
the ERT judgment not endangering intra-
Community trade are not fulfilled. By 
excluding contact between operators in other 
Member States and their numerous potential 
customers in Italy and France, the exclusive 
right to import electricity may, as I have said 
repeatedly, restrict the volume of intra-
Community trade in electricity. This last 
observation justifies classifying those rights 
as measures having an effect equivalent to 
quantitative restrictions on imports71 and 
therefore the counter-arguments of the Ital­
ian and French Governments, which seek to 
rely on the ER T judgment and the close con­
nection between the exclusive rights to 
import electricity and the terms of transmis­
sion within the country, are unfounded. 72 
(ii) Exclusive export rights 
66. Are the other measures to which the 
present applications refer, namely exclusive 
71 — The observation that the exclusive right of importation 
existing in Italy is a measure having an effect equivalent to a 
quantitative restriction on imports disposes of the Italian 
Government's argument that Consolidated Enactment N o 
1775 of 14 December 1933, to which the Commission refers 
in its application (see paragraph 37 above), has had no pur­
pose since the formation of ENEL and that, therefore, the 
quantitative restrictions arising from that measure no longer 
exist. However, the evidence produced by the Commission 
to show that those provisions are still applied (existence of 
a specific measure adopted in 1989 and remaining in force 
until 1997, whereby the quantities of electricity which 
ENEL may import and export annually arc restricted) has 
not been refuted by the Italian Government with detailed 
submissions. The defence merely claims that, for the grant 
of an authorization to import a particular volume of elec­
tricity, it is sufficient for ENEL to lodge an application for 
that purpose. However, the Court has consistently held (see 
Case 124/81 Commission v United Kingdom [1983] ECR 
203, paragraph 9) that Article 30 precludes the application 
to intra-Community trade of national provisions which 
require, even as a pure formality, import licences or any 
other similar procedure. 
72 — Whether the nature and scope of this connection may jus­
tify, for the purpose of Article 36 of the Treaty, the creation 
of the exclusive rights concerned is, of course, an entirely 
different question, which will be examined in section 2 
below. 
I - 5737 
O P I N I O N O F MR COSMAS — CASE C-157/94 
export rights,73 measures having an effect 
equivalent to quantitative restrictions on 
exports for the purposes of Article 34 of the 
Treaty? 
67. In my opinion, the case-law on that pro­
vision of the Treaty shows that the Court 
distinguishes between: 
— measures which directly impose a prohi­
bition or quantitative restriction on 
exports: such measures, as quantitative 
restrictions in the strict sense, are 
undoubtedly regarded as contrary to 
Article 34; 7 4 
— measures which refer directly to condi­
tions and requirements for exports, with­
out expressly imposing quantitative 
restrictions: although the judgments con­
cerning their compatibility with the 
Treaty do not set out a general criterion 
on this point, I think it may easily be 
inferred from the decided cases as a 
whole that such measures are regarded as 
having an effect equivalent to quantitative 
restrictions, prohibited by Article 34, if 
they are deemed to be capable, even if 
only potentially, of impeding intra-
Community trade; 7 5 
— measures which do not refer directly to 
the export trade of the Member State in 
question: these may be considered to 
have an effect equivalent to quantitative 
restrictions on exports only where it is 
shown that they are 'national measures 
which have as their specific object or 
effect the restriction of patterns of 
exports and thereby the establishment of 
a difference in treatment between the 
domestic trade of a Member State and its 
export trade in such a way as to provide a 
particular advantage for national produc­
tion or for the domestic market of the 
State in question'. 7 6 Thus, national pro­
visions which, while appearing to apply 
73 — It will be remembered that, according to the Commission, 
in Italy and Spain there are exclusive rights to export elec­
tricity, and in France exclusive rights to export electricity 
and natural gas. In the action against the Netherlands the 
question of exclusive export rights does not arise. 
74 — See Case C-5/94 Hedley Lomas [1996] ECR 1-2553, para­
graph 17 (refusal by a Member State to issue an export 
Učence), and Case 7/78 Thomson [1978] ECR 681 (prohibi­
tion of exports). 
75 — See Joined Cases 51/71 and 54/71 International Fruit Com­
pany and Others [1971] ECR 1107, paragraphs 8 and 9 
(requirement, though purely formal, to obtain export 
licences or to follow a similar procedure); Case 53/76 Bou-
helier [1977] ECR 197, paragraph 16 (requirement, only for 
the export of certain products, of a licence or certificate of 
conformity with certain specifications); Case 68/76 Com­
mission v France [1977] ECR 515, paragraphs 14 and 15 
(requirement, for exporting certain producta, of a special 
export declaration); Vriend, cited in footnote 63, paragraph 
10; Case 29/82 Van Lutpen [1983] ECR 151, paragraph 9 
(right to export certain products recognized only for opera­
tors registered with a named body constituted or controlled 
by State authorities); Case C-110/89 Commission v Greece 
[1991] ECR 1-2659, paragraph 24 (obstacles and restric­
tions, by means of various measures, on exports of a par­
ticular product by operators other than a body controlled 
by the Sute authorities); and, finally, Case C-426/92 Deut­
sches Milch-Kontor [1994] ECR 1-2757, paragraph 42 (sys­
tematic frontier inspections for checking the composiuon 
and quality of a particular exported product). In my opin­
ion, it is significant that in two of those judgments, namely 
Bouhelier and Vriend (in paragraphs 8 and 16 respectively), 
the Court cited the classic formulation of the Dassonville 
judgment in relation to the national measures in question. 
76 — Sec the judgment in Case 15/79 Groenveld [1979] E C R 649, 
paragraph 7. 
I - 5738 
COMMISSION v NETHERLANDS 
without differentiation to products for 
export and those for the domestic mar­
ket, establish implicit prohibitions or 
restrictions on exports have been 
declared contrary to Article 34 of the 
Treaty. 77 
68. The exclusive rights at issue, which refer 
direcdy to the conditions for exporting elec­
tricity and gas, clearly belong to the second 
of the abovementioned categories. Therefore 
the question whether such rights are compat­
ible with Article 34 of the Treaty must be 
answered in conformity with the reasoning 
of the judgments cited in footnote 75 and 
not, as the Commission appears to suggest, 
the line of cases starting with Groenveld 
(cited in footnote 76) which, I repeat, in my 
view refer to national measures which do not 
relate directly to the export trade. Therefore, 
where it is shown that the contested mea­
sures, which grant export rights to only one 
organization, prevent operators or consum­
ers in other Member States from contacting 
other entities in order to obtain supplies, in 
my opinion such measures, which may, at 
least potentially, adversely affect intra-
Community trade, may justly be regarded as 
having an effect equivalent to quantitative 
restrictions on exports for the purposes of 
Article 34 of the Treaty, 78 and it is not nec­
essary, as the Spanish Government seems to 
argue, to examine in addition the conditions 
under which trade in the products concerned 
takes place within the defendant States. Sec­
ondly, I cannot accept the Italian Govern­
ment's argument that, as Italy has an electric­
ity shortage, ENEL's exclusive right to 
export does not in practice affect Italian 
exports. The rights at issue fall within the 
ambit of Article 34 if it is shown that they 
may impede trade in the Community, and it 
is unnecessary to prove that they actually 
restrict exports. 79 Finally, for the same rea­
son the French Government's submissions 
that the export of electricity, which began in 
1981, amounted in 1993 to approximately 
12% of national production, and that French 
production of natural gas is in any case neg­
ligible and in constant decline, are irrelevant. 
Furthermore, the French Government itself 
states that the electricity and natural gas pro­
duced in France are primarily intended for 
consumers in that country, for which reason 
— and also because EDF and GDF, the 
undertakings with exclusive rights, have an 
77 — See the judgments in Case 172/82 Inter-Huilel [1983] ECR 
555; Case 295/82 Rhône-Alpes Huiles [1984] ECR 575; ind 
Case 173/83 Commission v France, cited in footnote 57 
(organisation in a Member State of a system for the collec­
tion and disposal of waste oil in such a way that there was 
an implicit prohibition on exporting such products to 
another Member State); Case 118/86 Nertsvoederfabriek 
Nederland [1987] ECR 3883 (national provisions which, by 
requiring producers of poultry offal to dispose of it to 
licensed processors, created an implicit prohibition on 
exports); and Case C-47/90 Delkaize [1992] ECR 1-3669 
(national rules applying to wines with a designation of ori­
gin which, by imposing an obligation to bottle the wine in 
the area of production, led indirectly to limiting the quan­
tity which may be exported in bulk to other Member 
Sutes). 
78 — Regarding measures which have been found to fall within 
the ambit of Article 34 because they restrict the category of 
persons with the right to export, see Vriend, Van Luipen 
and Commission v Greece, cited in footnote 75. 
79 — See the cases cited in footnote 70 concerning measures 
within the ambit of Article 30. 
I - 5739 
OPINION OF MR COSMAS — CASE C-157/94 
obligation to provide an uninterrupted sup­
ply of electricity and gas — 'it is possible 
that the principle laid down in Article 34 of 
the Treaty is not observed in every case'. 
(2) The contested rights may be justified 
under Article 36 of the Treaty 
69. The defendant States contend that, 
assuming that the exclusive rights in question 
are measures having an effect equivalent to 
quantitative restrictions on imports and 
exports, they are nevertheless justified under 
Article 36 and are therefore compatible with 
the Treaty. The arguments they put forward 
reflect, of course, the conditions prevailing in 
each country, but they all centre around the 
idea that the contested rights are justified on 
grounds of 'public security' for the purposes 
of Article 36 of the Treaty, as their purpose is 
to ensure the supply of electricity and natu­
ral gas in all the defendant States. 
70. These arguments are no doubt based on 
Campus Oil. 80 In that case the High Court 
of Ireland requested a preliminary ruling 
on various questions relating to the 
interpretation of Articles 30, 31 and 36 of 
the Treaty in order to ascertain whether 
national provisions requiring importers 
of petroleum products to obtain their 
supplies, up to a certain percentage, from a 
State corporation operating a refinery 
in Ireland, at prices fixed by the competent 
Ministry, were compatible with the Treaty. 
After finding that the national rules 
constituted a measure having an effect 
equivalent to a quantitative restriction on 
imports (paragraph 20), the Court went on 
to consider whether the reasons for the 
rules constituted grounds of 'public security' 
for the purposes of Article 36 of the Treaty. 
The Court accepted (paragraph 34) that 
'petroleum products ... are of fundamental 
importance for a country's existence since 
not only its economy but above all its 
institutions, its essential public services 
and even the survival of its inhabitants 
depend on them', and 'an interruption of 
supplies of petroleum products, with the 
resultant dangers for the country's existence, 
could therefore seriously affect the 
public security that Article 36 allows States 
to protect'. The Court added (paragraph 35): 
'It is true that ... Article 36 refers to matters 
of a non-economic nature. A Member State 
cannot be allowed to avoid the effects of 
measures provided for in the Treaty by 
pleading the economic difficulties caused 
by the elimination of barriers to intra-
Community trade. However, in the light 
of the seriousness of the consequences that 
an interruption in supplies of petroleum 
products may have for a country's existence, 
the aim of ensuring a minimum supply of 
petroleum products at all times is to be 
regarded as transcending purely economic 
considerations and thus as capable of 
constituting an objective covered by the 
concept of public security.' 
80 — Case 72/83 [1984] ECR 2727. 
I - 5740 
COMMISSION v NETHERLANDS 
71. There can be no doubt that the observa­
tions underlying the paragraphs cited above 
from Campus Oil apply equally to electric­
ity. A modern State or economy could not 
conceivably function without a continuous, 
uninterrupted supply of electricity, which is 
also essential for meeting the basic daily 
needs of the population. Although less obvi­
ously, natural gas is of similar importance in 
the functioning of the State, society and the 
economy, at least in France, the only Mem­
ber State which has introduced exclusive 
rights to import and export natural gas. It 
appears from France's defence that in 
1990 13% of that country's primary energy 
requirements was met by natural gas. Apart 
from the fact that, as is also indicated in the 
defence, experts agree that in the next 20 
years the consumption of natural gas will 
rise by up to 50%, the mere fact that natural 
gas is already being used in France as a pri­
mary energy source in the abovementioned 
proportion justifies, in my opinion, regard­
ing security of the supply of natural gas as an 
objective covered by the concept of public 
security within the meaning of Article 36 of 
the Treaty. 
72. The Commission is in no doubt that, in 
view of the Campus Oil judgment, the secu­
rity of electricity supply is a ground of pub­
lic security for the purpose of Article 36. 
Nevertheless, it observes that the Court has 
not given an exact definition of 'security of 
supply' and states that, with regard to elec­
tricity, the term comprises three elements, 
none of which can be affected by the aboli­
tion of the contested exclusive rights. 
According to the Commission, those three 
elements are the security of supply of the 
raw materials necessary for the production 
of electricity, a guarantee of sufficient quanti­
ties of electricity to meet demand and, 
finally, the security of the transmission sys­
tem. 
73. On the last point, the Commission con­
tends, in particular, that the abolition of 
exclusive rights to import and export elec­
tricity is perfectly compatible with the estab­
lishment and maintenance of centralized 
control of the transmission system so as to 
ensure that supply exactly matches demand 
at all times and to avoid the technical prob­
lems which an imbalance might cause in the 
functioning of the system, and is also com­
patible with the establishment of technical 
standards with which the users of the system 
must comply to ensure the quality of the 
supply. The defendant States for their part 
have not specifically argued that the exclu­
sive rights in question are absolutely neces­
sary for the security of the transmission sys­
tem. It is also significant that, as already 
mentioned (see footnote 56), in the Amended 
Proposal for a directive concerning common 
rules for the internal market in electricity 
(cited in paragraph 4), the provisions con­
cerning access for producers and distributors 
to the distribution system coexist with those 
concerning the 'transmission system opera­
tor' who will be responsible for managing 
energy flows on the system and will there­
fore retain the right to refuse requests for 
access to the system if certain requirements 
are not fulfilled. 
I - 5741 
O P I N I O N O F MR COSMAS — CASE C-157/94 
74. Therefore the real disagreement between 
the Commission and the Member States 
turns on the question whether the abolition 
of the exclusive rights may adversely affect 
the supply of the raw materials necessary for 
the production of electricity or jeopardize 
the guaranteed supply of the necessary quan­
tities needed to satisfy demand at any time. 
75. On this point the Kingdom of the Neth­
erlands makes the following submissions: 
— To ensure that in the short and medium 
term the quantities of electricity available 
in the Netherlands exacdy match 
demand, the EW Law cited above (para­
graph 29 et seq.) lays down a planning 
system at national level for the generation 
of electricity. Every two years SEP 
(which owns the exclusive right to 
import electricity for public distribution), 
in conjunction with the electricity gen­
eration undertakings and the body repre­
senting distribution undertakings, draws 
up an electricity plan ('E-plan') which 
specifies the production capacity neces­
sary to meet the overall demand forecast 
for the next ten years in the Netherlands. 
The E-plan, which is approved by the 
Minister for the Economy, imposes cer­
tain obligations on the generation and 
distribution undertakings, the fulfilment 
of which may be enforced through the 
courts. For example, generation under­
takings must construct the new genera­
tion units provided for by the E-plan and 
keep them in operation. However, the 
main obligation of each generation 
undertaking is to supply the distribution 
undertaking in its region with all the 
electricity it requests, while each distribu­
tion undertaking in turn must in prin­
ciple supply all the electricity demanded 
by consumers in the area which it serves. 
Consequently there is close interdepen­
dence between the E-plan and the mutual 
obligations described above. The distri­
bution undertakings can only be required 
to supply electricity to consumers if the 
quantities produced by the generation 
undertakings are sufficient. Moreover, in 
compensation for the obligation to meet 
in full the demand from the distribution 
undertakings, the generation undertak­
ings must be given guarantees with 
regard to absorption of the quantities 
generated as a whole. 
— According to the Kingdom of the Neth­
erlands, the question whether the exclu­
sive right to import electricity for public 
consumption is justified under Article 36 
of the Treaty 81 must be assessed by refer­
ence to the system described above in its 
81 — In any case the argument of the Kingdom of the Nether­
lands that the exclusive right in question mav be justified 
by 'imperative requirements' within the meaning of Cassis 
de Dijon is untenable. As the Commission rightly observes, 
such 'imperative requirements' can be rel iedupon only in 
relation to measures which apply without distinction to 
both national and imported products (see Joined Cases 
C-l/90 and C-176/90 Aragonesa de Publicidad and Pith-
livia [1991] ECR 1-4151, paragraph 13; and Case C-2/90 
Commission v Belgium [1992] ECR 1-4431, paragraph 34). 
In the latter case, tne exclusive import rights related Dy vir­
tue of their objective and nature, only to imported electric­
ity, as I have already said (paragraph 61). For the same rea­
son, the Spanish Government's arguments on the same 
point likewise cannot be accepted. 
I - 5742 
COMMISSION v NETHERLANDS 
entirety, and to the risks entailed in gen­
erating more electricity than can be 
absorbed. The unrestricted import of 
large volumes of electricity by the distri­
bution undertakings would lead to large 
surpluses, which would result in an econ­
omic burden for the generators so great 
that it would dangerously undermine the 
supply system: the costs of managing the 
surpluses would be passed on by the gen­
erators to the final consumers, resulting 
in the adoption of different tariffs for dif­
ferent regions. Furthermore, the unre­
stricted import of electricity would lead 
to such uncertainty regarding the data 
used as the basis for the E-plan that it 
would be impossible to impose electricity 
supply obligations on distributors and 
• generators or to compel the latter to 
build new generation units. 
76. The Italian Government maintains that 
the exclusive rights to import and export 
electricity have the object of ensuring the 
supply and this, in its opinion, consists by 
definition, firstly, in ensuring the optimum 
functioning of the national electricity system 
and, secondly, in ensuring not only an unin­
terrupted supply of electricity but also a sup­
ply at reasonable, stable prices. 
— The Italian Government observes, firstly, 
that Italy traditionally imports energy: 
approximately 17% of its electricity 
requirements are covered by imported 
power and 65.4% by power produced by 
ENEL using imported hydrocarbons as 
raw material. In order to cover its 
requirements of imported electricity and 
hydrocarbons, ENEL signs long-term 
contracts (for seven or eight years) in 
order to keep to a minimum the adverse 
effects of exchange-rate fluctuations and 
oil crises attributable to political develop­
ments. However, for ENEL to be able to 
contract with its suppliers for such long 
periods it must be able to determine as 
exactly as possible the demand it will 
have to meet. An exact estimate of future 
demand is also necessary for the correct 
planning of generation and transmission 
capacity because, obviously, such plan­
ning must look to the long term owing to 
the time required to build a new generat­
ing station or transmission line (approxi­
mately seven years). The abolition of the 
exclusive rights in question would make 
it impossible to estimate future demand 
accurately and would jeopardize security 
of supply if ENEL were unable to supply 
the quantity of electricity which would 
ensure the optimum functioning of the 
national electricity system. 
— Secondly, with regard to ensuring the 
supply of electricity at reasonable, stable 
prices, the Italian Government states that 
ENEL applies a single price policy for 
the whole country which makes it pos­
sible to offset the profits from supplying 
large-volume users against the high cost 
of supplying power to consumers in 
remote or inaccessible regions. However, 
if the exclusive import and export rights 
I - 5743 
OPINION OF MR COSMAS — CASE C-157/94 
were abolished, the large-volume con­
sumers, most of whom are situated in 
regions close to the borders of Italy, 
would turn to foreign suppliers, thereby 
disturbing the functioning of the com­
pensation mechanism described above 
and provoking a rise in the average price 
of electricity, to the detriment in particu­
lar of consumers who, either because of 
their low consumption or their location, 
could not benefit from the abolition of 
the exclusive rights or the opportunity to 
use foreign electricity suppliers. 
77. According to the French Government, 
'security of supply' within the meaning of 
the Campus Oil judgment does not merely 
involve ensuring the supply of the energy 
necessary to meet demand, irrespective of 
price or marketing conditions, since that 
does no more than provide the population 
and the economy of a country with security 
in emergencies and it could lead to serious 
economic problems if the cost of energy rose 
considerably. For this reason, the French 
Government considers that: 
— In order to ensure the supply of a coun­
try, it is not sufficient to secure the neces­
sary forms of primary energy, without 
taking account of their nature and the 
market price, but it is also necessary to 
draw up a policy concerning the kind of 
energy to be used, its source and the 
investments necessary. 
— Abolition of the existing monopolies on 
importing and exporting electricity 
would make it impossible to formulate 
and apply a policy of that kind, and for 
EDF and other generators there would 
be total uncertainty regarding future 
demand. In such circumstances, genera­
tors would prefer to make investments 
which would provide the quickest pos­
sible return, rather than run the risk of 
large investments which would take 
much longer to amortize. In practice that 
would mean, in France's case, the aban­
donment of nuclear power for the gen­
eration of electricity, in favour of power 
stations using natural gas — a dangerous 
course, since more than 90% of the natu­
ral gas used in the country is imported. 
The French Government adds that the aboli­
tion of exclusive import and export rights 
would make the long-term forecasting of 
changes in demand for electricity impossible, 
thus impeding the adjustment of national 
production potential to the country's needs 
and endangering security of supply. The 
only, and extremely costly, alternative would 
be to maintain generation capacity at a 
I - 5744 
COMMISSION v NETHERLANDS 
higher level, for the sake of security, than is 
necessary to meet actual needs. 
78. With regard to natural gas, the French 
Government makes the following observa­
tions: 
— In producer countries, production and 
marketing are normally controlled by 
national monopolies. Only a large 
importer which is sure of the long-term 
demand which it will have to meet can 
negotiate with such monopolies on con­
ditions which are satisfactory from the 
economic viewpoint and which will 
ensure security of supply. 
— Only a large importer will be able to sign 
with producers the long-term contracts 
which are necessary to ensure supplies 
because, before such contracts are signed, 
producers often require participation in 
costly investment programmes. 
— If exclusive rights to import and export 
natural gas were abolished, operators 
wishing to improve their competitiveness 
would turn to the markets which offer 
the best short-term prices. However, the 
abandonment of long-term contracts and 
the resulting non-participation in invest­
ments in producer countries would entail 
a risk of interruption of supplies, which 
would cause consumers to lose confi­
dence in natural gas and return to other 
sources of energy, mainly oil. Therefore 
French energy policy would have failed 
in one of its main aims, namely to achieve 
the greatest possible diversification of 
energy sources. 
79. Finally, the Spanish Government con­
tends that the Spanish legislation which, 
according to the Commission, creates exclu­
sive rights to import and export electricity, 82 
is in any case justified under Article 36 of the 
Treaty because the legislation, which pro­
vides for the 'unified operation' of the 
national electricity system by Redesa, has the 
object of keeping the average cost of electric­
ity and, ultimately, the price to the consumer, 
as low as possible. 
80. Those arguments of the defendant States 
raise direcdy a question of the greatest 
importance: are measures adopted by a 
Member State in connection with energy 
policy and, in particular, electricity and natu­
ral gas, to be deemed to have been imposed 
on grounds of 'public security' for the pur­
poses of Article 36 of the Treaty only where 
they have the object of ensuring the supply 
of the minimum quantities of electricity and 
82 — It will be remembered that, in my opinion, the legislation 
does not create such rights (see paragraph 41 et seq. above). 
I - 5745 
OPINION OF MR COSMAS — CASE C-157/94 
natural gas without which it is impossible for 
the State and the economy to function and to 
cover the basic needs of the population, or 
also where such measures are designed to 
supply those forms of energy at the best pos­
sible price and with associated services of the 
highest possible quality? In other words, 
may measures which have an effect equiva­
lent to quantitative restrictions on imports 
and exports and are adopted in the sectors in 
question be deemed to have been imposed 
on grounds of 'public security' for the pur­
pose of Article 36 of the Treaty only where 
they are designed to ensure the supply of the 
minimum necessary quantities of electricity 
and natural gas, or is that also the case where 
they are intended to ensure supplies under 
the best conditions? 
81. Although the central questions in Cam­
pus Oil were not in precisely those terms, the 
way in which the Court approached them in 
its judgment leaves me in no doubt as to the 
reply which must be given to the question I 
have just raised. In paragraph 34 of Campus 
Oil, the Court observed that an interruption 
of supplies of petroleum products, with the 
resultant dangers for the country's existence, 
could seriously affect its public security, 
while in the next paragraph it added that the 
aim of ensuring at all times a minimum sup­
ply transcends purely economic consider­
ations and may therefore be regarded as a 
measure relating to public security. On that 
basis, the Court then (paragraphs 47 and 51) 
pointed out that a Member State whose 
supply of petroleum products is totally or 
almost totally dependent on imports may, in 
principle, rely on grounds of public security 
within the meaning of Article 36 for the pur­
pose of requiring importers to cover a cer­
tain proportion of their needs by purchases 
from a refinery situated in its territory at 
prices fixed by the competent minister, 
although the quantities of petroleum prod­
ucts covered by such a system must not in 
any circumstances exceed the minimum sup­
ply requirement without which the operation 
of the essential public services and the sur­
vival of the inhabitants of the State con­
cerned would be affected. I think it is clear 
from the paragraphs I have cited that the 
Campus Oil judgment is a carefully consid­
ered step. The Court accepts, on the one 
hand, that a measure for ensuring the supply 
of petroleum products may, in principle, be 
justified on grounds of public security, but it 
stresses repeatedly that the object of such a 
measure must be to ensure the vital mini­
mum without which the very existence of 
the State would be endangered and it would 
be impossible to meet the basic needs of the 
population. 
82. In my opinion, this strict approach is the 
only one consistent with Article 36, which 
provides for an exception to a fundamental 
principle of the Treaty. If not only measures 
for ensuring the essential minimum, but also 
those which have the object of bringing 
about favourable conditions of supply from 
the viewpoint of cost, quality and selective 
management were regarded as measures 
designed to ensure the supply of a particular 
form of energy crucial to the functioning of 
the State and of the economy, these would be 
almost unlimited scope for potential excep­
tions to the principle of the free movement 
I - 5746 
COMMISSION v NETHERLANDS 
of goods. Any measure connected directly or 
indirectly with the conditions for production 
and marketing of the form of energy con­
cerned and, finally, any measure covered by 
the relevant area of the energy policy of the 
Member State concerned could be consid­
ered to be related to grounds of 'public secu­
rity'. However, in practice that would be 
tantamount to setting apart energy policy as 
a special ground which could justify derogat­
ing from Articles 30 and 34 of the Treaty. 
83. When considered in that light, the defen­
dant States' arguments that the exclusive 
rights in question are justified on grounds of 
public security should, in my opinion, be 
dismissed. If measures which do not have the 
particular, direct object of ensuring a mini­
mum supply of electricity and natural gas 
cannot be deemed to contribute to safe­
guarding public security for the purposes of 
Article 36 of the Treaty, it is quite certain 
that the retention of the contested rights can­
not be justified under Article 36 by the fact 
that their abolition would endanger the 
machinery for fixing tariffs which are reason­
able for the average consumer or uniform 
throughout the country (as claimed by all 
the defendant States), or would endanger the 
Optimum functioning of the national elec­
tricity system' (as claimed by the Italian 
Government) or, finally, would undermine 
attainment of the aims of a Member State's 
energy policy relating to diversification of 
the sources of energy used in that State and 
the resulting investment policy (as claimed 
by the French Government). 
84. There is likewise no foundation, in my 
view, for the arguments of the Netherlands 
Government and those of the French and 
Italian Governments to the effect that the 
exclusive import and export rights are justi­
fied under Article 36 of the Treaty because, 
without them, it is impossible to plan effec­
tively the development of the production 
potential necessary to meet future demand. 
Of course, it would be inconceivable to for­
mulate and implement a national energy 
policy without a medium and long-term 
plan, particularly in a sector such as electric­
ity, where those responsible for taking deci­
sions must make allowance for the special 
characteristics of electricity (dependency on 
the grid, the security of which requires sup­
ply and demand to be absolutely matched at 
all times, with no possibility of storage). I 
also understand the Member States' submis­
sions that the abolition of exclusive import 
rights and the resultant imports by indi­
vidual operators would probably lead to 
electricity surpluses because medium or 
long-term production plans would have 
taken account of the demand from those 
operators. But neither the Netherlands Gov­
ernment, nor the Italian or French Govern­
ments have offered a convincing explanation 
of why such surpluses should endanger secu­
rity of supply, that is to say, the minimum 
supply necessary to safeguard public secu­
rity. The submissions of the Netherlands 
Government on this point refer to the 
I - 5747 
O P I N I O N O F MR COSMAS — CASE C-157/94 
economic consequences of the emergence of 
surpluses 83 and also their negative conse­
quences for the effectiveness of the planning 
system in that country, while the French 
Government observes that to maintain pro­
duction capacity on grounds of security at a 
level higher than the needs it will actually be 
called upon to meet is a costly solution; and 
the Italian Government merely contends that 
the appearance of surpluses prevents ENEL 
from ensuring the Optimum functioning of 
the national electricity system'. 84 Moreover, 
neither the Italian nor the French Govern­
ment explains why the national planning sys­
tem could not ensure a minimum supply of 
electricity (and, so far as France is con­
cerned, of natural gas) without the import 
rights which exist in Italy and France. In par­
ticular, no explanation is given as to why a 
secure minimum supply could not be 
attained by restricting or even prohibiting 
exports by individual operators whenever a 
specific export transaction would jeopardize 
the availability of the quantities of energy 
which constitute the essential minimum for 
safeguarding public security. 
(c) Conclusion 
85. Having regard to the foregoing, in my 
opinion it must be accepted that the exclu­
sive right in the Netherlands to import elec­
tricity for public distribution, the exclusive 
rights in Italy to import and export electric­
ity and the exclusive rights in France to 
import and export electricity and natural gas 
are measures having an effect equivalent to 
quantitative restrictions on imports and 
exports, prohibited by Articles 30 and 34 of 
the Treaty respectively, and as such they lead 
to discrimination between nationals of Mem­
ber States regarding the conditions under 
which goods are procured and marketed, 
which is prohibited by Article 37(1) of the 
Treaty. 
B — Article 90(2) 
(a) Can Article 90(2) justify the derogation 
from the provisions of the Treaty reding to 
the free movement of goods? 
86. In the alternative, the defendant States 
contend that, even assuming that the con­
tested rights were found to be contrary to 
Articles 30, 34 and 37, they could neverthe­
less be deemed compatible with the Treaty 
pursuant to Article 90(2), which provides as 
follows: 'Undertakings entrusted with the 
83 — According to Campus Oil (paragraph 36), if it is shown that 
certain national rules are justified by objective circum­
stances corresponding to the needs of public security, 'the 
fact that the rules are of such a nature as to make it possible 
to achieve, in addition to the objectives covered by the con­
cept of public security, other objectives of an economic 
nature which the Member State may also seek to achieve, 
does not exclude the application of Article 36'. However, in 
the present case to plead the strictly economic conse­
quences of abolishing the exclusive rights is certainly not 
sufficient to deem them compatible with the Treaty if it 
is not shown that they are justified on grounds of public 
security, within the meaning of the term as used in this 
Opinion. 
84 — For those reasons, mutatis mutandis, I am not persuaded by 
the arguments of the Italian and French Governments that 
the abolmon of the exclusive rights would deprive ENEL 
and GDF respectively of the opportunity to prepare a cor­
rect estimate of the demand which it will be necessary to 
meet and would therefore also deprive them of the oppor­
tunity to negotiate, from an advantageous position, for the 
importation of large volumes of electricity (in Italy's case) 
and natural gas (in the case of France). N o reason is given 
as to why the import, on the basis of 'large contracts', of 
quantities which may be shown to exceed the demand 
originally anticipated should direcdy jeopardize the mini­
mum supply. 
I - 5748 
COMMISSION v NETHERLANDS 
operation of services of general economic 
interest [...] shall be subject to the rules con­
tained in this Treaty, in particular to the rules 
on competition, in so far as the application 
of such rules does not obstruct the perfor­
mance, in law or in fact, of the particular 
tasks assigned to them. The development of 
trade must not be affected to such an extent 
as would be contrary to the interests of the 
Community.' 
The defendant States argue that the contested 
rights were granted to undertakings 
'entrusted with the operation of services of 
general economic interest' and that the aboli­
tion of those rights would obstruct the per­
formance of the particular tasks assigned to 
those undertakings. 
87. The Commission opposes those argu­
ments on the ground that Article 90(2) can­
not cover national measures contrary to the 
provisions on the free movement of goods. 
That submission is based mainly on Campus 
Oil which has already been cited several 
times. In that case (which concerned the 
interpretation of the Treaty provisions on the 
free movement of goods in relation to 
national provisions which required importers 
to obtain a certain percentage of their sup­
plies from a refinery on national territory), 
the Greek Government contended, referring 
to Article 90(2), that 'a refinery is an under­
taking of general economic interest and that 
a State refinery could not, without special 
measures in its favour, compete with the 
major oil companies'. In paragraph 19 of the 
judgment, the Court made the following 
observations on this point: 'Article 90(1) 
provides that in the case of public undertak­
ings and undertakings to which Member 
States grant special or exclusive rights, Mem­
ber States are neither to enact nor to main­
tain in force any measure contrary to the 
rules contained in the Treaty. Article 90(2) is 
intended to define more precisely the limits 
within which, in particular, undertakings 
entrusted with the operation of services of 
general economic interest are to be subject to 
the rules contained in the Treaty. Article 
90(2) does not, however, exempt a Member 
State which has entrusted such an operation 
to an undertaking from the prohibition on 
adopting, in favour of that undertaking and 
with a view to protecting its activity, mea­
sures that restrict imports from other Mem­
ber States contrary to Article 30 of the 
Treaty.' 
88. Although the position taken by the 
Court in the last sentence of the above para­
graph from Campus Oil may be explained 
by the place where the relevant provision 
appears among the Treaty rules relating to 
competition, and by the Court's concern not 
to allow exceptions to the provisions on the 
free movement of goods other than those set 
out in Article 36, the question whether that 
position is compatible with the actual word­
ing of the provision remains open. Having 
laid down the principle that undertakings 
entrusted with the operation of services of 
general economic interest are to be subject to 
all the rules contained in the Treaty, Article 
90(2) provides for the possibility of derogat­
ing from those rules, without making any 
distinction between them. Moreover, it is 
clear from the last paragraph of the provision 
in question that the measures it covers may 
I - 5749 
OPINION OF MR COSMAS — CASE C-157/94 
affect directly not only the principles of 
healthy competition but also intra-
Community trade. S5 
89. However, regardless of the foregoing 
considerations, the Court's position in Cam­
pus Oil was not followed in later decisions. 
In France v Commission cited in footnote 64, 
the Court described the objectives of Article 
90(2) in the following terms: 'In allowing 
derogations to be made from the general 
rules of the Treaty on certain conditions, that 
provision seeks to reconcile the Member 
States' interest in using certain undertakings, 
in particular in the public sector, as an 
instrument of economic or fiscal policy with 
the Community's interest in ensuring com­
pliance with the rules on competition and 
the preservation of the unity of the Common 
Market' (emphasis added). The judgment in 
Mera Convenzionali Porto di Genova 86 is 
even clearer. In reply to a request for a pre­
liminary ruling as to whether a dock-work 
undertaking and/or company is an undertak­
ing entrusted with the operation of services 
of general economic interest within the 
meaning of Article 90(2) of the Treaty, and 
whether the application to that undertaking 
of certain provisions of the Treaty, including 
Article 30, could obstruct the performance of 
the particular task assigned to it, the Court 
stated first (paragraph 27) that it did not 
appear from the documents supplied by the 
national court or from the observations sub­
mitted to the Court that dock work was of a 
general economic interest exhibiting special 
characteristics distinguishing it from other 
economic activities, and added that 'even if it 
were, [...] the application of the rules of the 
Treaty, in particular those relating to compe­
tition and freedom of movement, would be 
such as to obstruct the performance of such 
a task' (emphasis added). Finally, according 
to the judgment in Corbeau (paragraph 
14), 87 Article 90(2) of the Treaty, correctly 
construed, 'permits the Member States to 
confer on undertakings to which they 
entrust the operation of services of general 
economic interest exclusive rights which may 
hinder the application of the rules of the 
Treaty on competition in so far as restric­
tions on competition, or even the exclusion 
of all competition, by other economic opera­
tors are necessary to ensure the performance 
of the particular tasks assigned to the under­
takings possessed of the exclusive rights'. A 
similar point was made in paragraph 46 of 
the Almelo judgment (cited in footnote 23). 
Nevertheless, in accepting in those judg­
ments that the Member Sutes may rely on 
Article 90(2) in order not only to impose 
restrictions on competition, but also in some 
instances to exclude all competition, the 
Court confirmed, in my opinion, the conclu­
sion to which the actual wording of that pro­
vision puma facie leads, namely that Member 
States may in principle rely upon it in order 
85 — As to whether a Member Sute is entitled to rely on Article 
90(2) to justify a measure contrary to Article 37 of the 
Treaty, see point VI of the opinion of Advocate General 
Rozès in Commission v Italy cited in footnote 41. 
86 — Case C-179/90 [1991] ECR 1-5889. 87 — Case C-320/91 [1993] ECR 1-2533. 
I - 5750 
COMMISSION v NETHERLANDS 
to introduce measures which are contrary 
not only to the competition rules but also to 
the other provisions of the Treaty. 88 
90. In principle, therefore, the Member 
States may rely on Article 90(2) to justify the 
exclusive rights in question. Of course, it 
remains to be seen whether the requirements 
of that provision are fulfilled for those rights, 
although contrary to Articles 30, 34 and 37, 
to be regarded as nevertheless compatible 
with the general system of the Treaty.89 
Therefore, in paragraph (b), I shall consider 
whether, in relation to each of the defendant 
States in turn, the holders of the contested 
rights have been entrusted by the public 
authorities with the operation of a service of 
general economic interest and, if so, whether 
the application of the relevant rules of the 
Treaty, namely Articles 30, 34 and 37, 
obstructs the performance of the particular 
task assigned to them. Then, assuming that 
the derogation from the rules of the Treaty 
which I have just mentioned is necessary for 
the performance of the particular tasks in 
question, I shall consider, in paragraph (c), 
whether nevertheless such derogation cannot 
be accepted because it affects intra-
Community trade to such an extent that the 
interests of the Community are damaged. 
(b) Have the holders of exclusive rights been 
entrusted with the operation of services of 
general economic interest? If so, does the 
application of the rules of the Treaty rekting 
to the free movement of goods obstruct the 
performance of the particuUr task assigned to 
them f 
(aa) Netherlands 
91. As I have already said (see paragraph 29 
of this Opinion), SEP was designated by 
Ministerial Order of 20 March 1990 as the 
only company entitled to import electricity 
for public distribution in the Netherlands 
(except with a voltage under 500 V). Under 
Article 2 of the EW, the undertaking holding 
that exclusive right, and undertakings hold­
ing licences for the construction or operation 
of units producing electricity for public dis­
tribution, have 'a duty in common to ensure 
the efficient operation of the national public 
electricity supply at costs which are as low as 
possible and in a socially responsible fash­
ion'. It seems to me there is no doubt that 
this provision confers upon SEP the opera­
tion of a service of general economic interest 
for the purpose of Article 90(2) of the Treaty. 
Although that term must be construed 
strictly, given that the aforementioned provi­
sion permits derogation from the rules of the 
88 — That is the meaning which Advocate General Darmon also 
gives to paragraph 14 of the Corbeau judgment. In his 
Opinion relating to the Almelo casc, cited in footnote 23, he 
observes (footnote 111) that the Court, in acknowledging 
that Member Sutes may rely on Article 90(2) of the Treaty 
in order to adopt measures excluding all competition, 'reap­
praised' the position it took in paragraph 19 of Campus 
Oil. 
89 — For a list of the conditions under which it is possible, by 
virtue of Article 90(2), to disapply Treaty provisions, see 
paragraph 26 of Mera Convenzionali Porto di Genova^ 
citedin footnote 86. 
I -5751 
OPINION OF MR COSMAS — CASE C-157/94 
Treaty, 90 electricity is so important for the 
normal functioning of a modern State and 
economy and for the daily needs of its entire 
population that certain powers, such as those 
granted to SEP by the abovementioned pro­
visions of the EW, must be regarded as the 
most typical case of a service the efficient 
operation of which concerns not only a par­
ticular category of individuals but also the 
entire population. The Almelo judgment 
cited above also shows (paragraph 47) that 
the Court considers it obvious that an under­
taking responsible for ensuring the supply of 
electricity in part of the national territory is 
entrusted with the operation of services of 
general economic interest. 91 
92. The Commission is in no doubt that SEP 
has been entrusted with the operation of a 
service of general economic interest. Further­
more, by Decision 91/50, 92 on a complaint 
presented by local Dutch electricity distribu­
tion undertakings, claiming that SEP and a 
regional electricity distribution undertaking 
had infringed Articles 85 and 86 of the 
Treaty, the Commission took the view 
(paragraph 40) that, mainly owing to Article 
2 of the EW, SEP was engaged in 'the opera­
tion of services of general economic inter­
est'. 93 However, the Commission is uncer­
tain as to how far SEP's exclusive import 
right is necessary to enable it to perform the 
particular task assigned to it. After observing 
that SEP is in any case not responsible for 
the distribution of electricity to final con­
sumers, the Commission claims that the 
Dutch Government must show that the abo­
lition of the abovementioned exclusive right 
would cause importers to concentrate on the 
most profitable activities, that it would 
endanger SEP's economic viability and, 
finally, that there are no other solutions 
which could ensure the fulfilment of SEP's 
public service obligations. 
93. Among the Dutch Government's sub­
missions on this question, I think the follow-
90 — See Case 127/73 BRT [1974] ECR 157, paragraph 19. 
91 — The Almelo judgment concerned certain questions from a 
Dutch court which, in the context of an arbitration pro­
cedure, had to consider the validity of contracts signed by 
regional and local electricity distribution undertakings 
which imposed on the latter a prohibition on importing 
electricity for public distribution even before the EW took 
effect. 
92 — Commission Decision 91/50/EEC of 16 January 1991 relat­
ing to a proceeding under Article 85 of the EEC Treaty 
(IV/32.732 — IJsselcentrale and Others, OJ 1991 L 28, 
p. 32. 
93 — The complaint which led to Decision 91/50 referred to a 
clause of an agreement signed in 1986 (that is to say, before 
the EW entered into force) by the electricity generation 
undertakings and SEP. The clause granted SEP an exclusive 
right to import and export electricity and imposed on the 
parties an obligation to stipulate, in supply contracts with 
electricity distribution undertakings, that the latter should 
neither import nor export electricity. The Commission 
ruled that the clause infringed Article 85(1) of the Treaty in 
so far as it had the object or effect of restricting imports and 
exports of private industrial consumers. Nevertheless, no 
ruling was given on the question whether the same clause 
was compatible with the Treaty in so far as it prohibited 
distribution undertakings from importing electricity for 
public distribution. After observing that the ban on imports 
was laid down in Article 34 of the EW, after that Law came 
into force, the Commission stated (see paragraph 50 of 
Decision 91/50) that it would not 'pass judgment here on 
the question whether such restriction of imports is justified 
for die purposes of Article 90(2) of the Treaty' because 'to 
do so would be to anticipate the question whether the new 
Law is itself compatible with the Treaty'. The action 
brought against Decision 91/50 was dismissed by the judg­
ment of 18 November 1992 of the Court of First Instance, 
T-16/91 Renda md Others v Commission [1992] ECR 
11-2417, which was partly set aside by the judgment of 19 
October 1995 of the Court of Justice, C-19/93 P Rendo and 
Others v Commission [1995] ECR 1-3319. 
I - 5752 
COMMISSION v NETHERLANDS 
ing point should be particularly borne in 
mind: Article 2 of the EW imposes on SEP a 
duty to ensure the efficient operation of the 
national public electricity supply at costs 
which are as low as possible. It may also be 
inferred from paragraph 14 et seq. and para­
graph 113 of the defence that all the provi­
sions of the EW relating to the fixing of elec­
tricity tariffs are governed by the principle 
that the cost of operating the national elec­
tricity supply system must be passed on in a 
balanced fashion to all consumers. To apply 
this principle, the EW provides for a mecha­
nism in which the principal function is 
assigned to SEP. The mechanism is as fol­
lows: 90% of the electricity generation cost 
of the four generating undertakings is jointly 
managed by them. They deliver to SEP all 
the electricity which they generate at flat-
rate prices fixed by SEP by reference to the 
raw material used. SEP adds to those prices 
its expenses for maintenance of the national 
transmission grid and for imported electric­
ity, and then the electricity is returned to the 
generation undertakings according to the tar­
iff resulting from the said increase, called the 
'basic national tariff' ('LBT'). The generators 
add to the LBT the 10% of the generation 
cost which is not jointly managed and sup­
ply the electricity to the distribution under­
takings at the tariff resulting from that 
increase, called the 'regional basic tariff' 
('RBT'), which fluctuates between certain 
maximum limits laid down on each occasion. 
Finally, the distributors supply the electricity 
to consumers at tariffs which must not 
exceed certain maximum limits and which 
vary according to the different categories of 
consumers. In this system SEP's task there­
fore consists in including in the price which 
will be paid by all final consumers, by fixing 
the 'basic national tariff', the national genera­
tion cost, the cost of transmission through 
the appropriate high-voltage grid and, finally, 
the cost of imports, so as to achieve equal 
distribution, among all consumers in the 
country, of the burden represented by the 
cost of operating the national electricity sup­
ply system, which must in all cases be kept at 
the lowest possible level. 
94. According to the Netherlands Govern­
ment, this specific task of SEP could not be 
performed if the exclusive import right were 
abolished. It points out, in paragraph 34 of 
the defence, that if it were abolished much of 
the electricity generated in the Netherlands 
would remain unused, which would lead 
ultimately (because it is obviously impossible 
to store surpluses for supply to consumers at 
a later date) 94 to a rise in the cost of generat­
ing electricity domestically, which, moreover, 
would be borne solely by the undertakings 
which continued to obtain supplies from the 
national grid and, ultimately, through those 
undertakings, by their customers (final con­
sumers), most of whom would not be in a 
position, because of their low consumption, 
to exercise the right granted to them by the 
EW to import electricity from abroad solely 
for their own consumption. 
94 — With regard to this particular characteristic of electricity, 
which is of fundamental importance for an understanding 
of the problems of generating and marketing it, see Annex 
IV (p. 68, paragraph A.2) of the Commission working 
document of 2 May 1988 cited above (see point 2 above), 
entitled T h e Internal Energy Market' [COM(88) 238 final]. 
See also paragraph 2 of the Opinion of Advocate General 
Darmon in Almelo. 
I - 5753 
O P I N I O N O F MR COSMAS — CASE C-157/94 
95. The summary of the arguments on each 
side shows that they differ on an important 
point. According to the Commission, to 
agree that the exclusive right in question was 
justified under Article 90(2), it would have to 
be shown in any case that its abolition would 
upset SEP's economic equilibrium. Accord­
ing to the Netherlands Government, on the 
contrary, it is sufficient to show that the abo­
lition of the exclusive right would make it 
impossible to observe one of the principles 
which govern the national electricity system 
and which, under the EW, must be applied 
by the holder of the exclusive right. This is 
the essential issue between the parties, as is 
clear from their submissions in the reply and 
the rejoinder. In its reply, the Commission, 
after stressing (paragraphs 35 and 36) that in 
its opinion, since SEP is not responsible for 
supplying electricity to final consumers, it 
does not have the obligations set out in para­
graph 48 of the Altneh judgment, which 
relates solely to a distribution undertaking, 
adds (paragraphs 38 and 39) that the argu­
ment of the Netherlands Government that 
the exclusive right in question is necessary 
for SEP to perform its task, consisting in the 
equitable apportionment of the cost of oper­
ating the national electricity supply system, 
is irrelevant because the need for all electric­
ity consumers to share in the cost of main­
taining production capacity is not a reason 
which would justify relying on Article 90(2) 
of the Treaty. In its rejoinder (paragraphs 66 
and 67), the Netherlands Government for its 
part contends that, to justify the exclusive 
right by reference to Article 90(2), it is not 
necessary to show that its abolition would 
upset SEP's economic equilibrium, but it is 
sufficient to show that abolition would inter­
fere with the basic principles of operation of 
the national electricity supply system, some 
of the functions of which are performed by 
SEP. 
96. In my opinion, the Commission's argu­
ment concerning the reasons which may jus­
tify derogation from the Treaty under Article 
90(2) is too narrow. Of course, I do not 
underestimate the fact that the exceptional 
nature of this provision demands particular 
care in construing and applying it. Neverthe­
less, I think that since Article 90(2) permits 
derogation from the Treaty to the extent nec­
essary for the performance of the particular 
task assigned to an undertaking entrusted 
with the operation of services of general 
economic interest, Article 90(2) must be 
regarded as intended to ensure not only the 
economic equilibrium of the latter undertak­
ing, 95 where such equilibrium is the mini­
mum requirement for the performance of the 
particular task, but also to ensure all the 
other conditions necessary for that task. It is 
sufficient if that task does not go beyond the 
powers and responsibilities reasonably 
regarded as associated with the operation of 
a 'service of general economic interest' 
within the meaning of that term in Commu­
nity Uw. Of course, on this question the 
Court of Justice always has the last word. 
95 — Article 90(2) was examined from this angle in Corbeau 
(cited in footnote 87, see paragraph 16 et seq.) and Almelo 
(cited in footnote 23, see paragraph 49). 
I - 5754 
COMMISSION v NETHERLANDS 
97. In view of what has been said, can SEP's 
exclusive import right be justified in the light 
of Article 90(2) of the Treaty? I think the 
reply must be in the affirmative. Keeping the 
cost of generating electricity at the lowest 
possible level and sharing among consumers 
the generation cost and generally the overall 
cost of operating the electricity supply sys­
tem are, in my opinion, principles imposed 
by the very logic governing the operation of 
a 'service of general economic interest'. An 
economic activity the results of which by 
definition affect every individual (particu­
larly in the case of the supply of electricity) 
or, at least, wide sectors of the population, 
must be carried out with particular regard to, 
inter alia, the need to contain the cost9 6 and 
to ensure certain basic forms of solidarity 
between those who do or may benefit97 
from that activity. In the present case, SEP, 
the holder of the exclusive right in question, 
is responsible for meeting the aforemen­
tioned needs, and the Dutch Government 
claims — in my opinion, convincingly — 
that the abolition of that right, although not 
threatening SEP's economic equilibrium, 
would obstruct the performance of that 'par­
ticular task' for the reasons stated above 
(paragraph 94). 
98. However, could fulfilment of this task 
perhaps be ensured by other means? The 
Commission believes it could, citing (see 
paragraph 40 of the reply) as possible alter­
native solutions the establishment of a 'fund 
for financing the fulfilment of public service 
obligations', 'public service contracts' or a 
charge for access to the grid. It seems to me 
that the first two proposals are in such gen­
eral terms that it is impossible to determine 
whether they would actually ensure the 
complete fulfilment of SEP's obligations in 
relation to ensuring the lowest possible cost 
of generation and uniform distribution of the 
cost of operating the national electricity sup­
ply system. With regard to the third pro­
posal, I would point out that the desired 
alternative must be less restrictive of trade in 
the Community than the exclusive right in 
question. However, if the charge for use of 
the national transmission system is set at 
such a level that the importer of electricity 
for public distribution bears a cost for gener­
ating national electricity which is exactly 
equal to that borne by a distributor who 
continues to obtain supplies in the Nether­
lands, the potential competitive advantage of 
electricity generated outside the Netherlands, 
because of its lower price, will be completely 
neutralized and the objective of removing 
obstacles to the free movement of the prod­
uct in question will not have been attained. 
96 — Therefore the appearance of electricity surpluses which, for 
the reasons given above (paragraph 84), do not endanger 
the security of the supply and cannot therefore be a ground 
of 'public security' for the purpose of Article 36 of the 
Treaty, nevertheless becomes important owing to the 
adverse effect which they may have on the cost of generat­
ing electricity, if the question is considered in the light of 
Article 90(2). 
97 — It must not be forgotten that undertakings with the right to 
import electricity for public distribution should, in view of 
the fundamental principle of universal service governing 
operators of services of general economic interest (sec Cor­
beau and Almek, paragraphs 15 and 48 respectively), retain 
intact their right to use trie national supply system to meet 
their needs when they consider it necessary. 
I - 5755 
OPINION OF MR COSMAS — CASE C-157/94 
99. In conclusion, I consider that, even if the 
exclusive right to import electricity for pub­
lic distribution is a measure having equiva­
lent effect to a quantitative restriction on 
imports and constitutes a form of prohibited 
discrimination between nationals of Member 
States regarding the conditions under which 
goods are procured and marketed, the grant 
of such a right to SEP is justified by the need 
for it to perform the particular task assigned 
to it in operating a service of general econ­
omic interest. 
(bb) Italy 
100. I have already mentioned (see para­
graph 36) that Law N o 1643 of 16 December 
1962 assigned to ENEL the functions of the 
generation, importation and export, trans­
mission, transformation, distribution and 
sale of electricity throughout Italy, irrespec­
tive of its source. Consequently there is no 
doubt that ENEL is entrusted with the 
operation of a service of general economic 
interest within the meaning of Article 90(2) 
of the Treaty. This is not directly called into 
question by the Commission, but it claims 
that the Italian Government has not shown 
that ENEL's exclusive rights to import and 
export electricity are necessary for fulfilling 
its specific obligations in the performance of 
its task. 
101. The Italian Government contends in 
reply that the abolition of those rights would 
make it impossible for ENEL to perform its 
task and, in particular, its obligation to sup­
ply electricity to consumers at low, stable 
prices in order to ensure the balanced 
national development. In its reply (para­
graphs 8 and 9), the Italian Government adds 
that ENEL's obligation under Article 1 of 
the abovementioned Law N o 1643 of 1963, 
as construed by the Corte Constituzionale 
(Italian Constitutional Court), is fulfilled by 
means of setting up and operating an inte­
grated electricity distribution system 
through which it is possible to make up for 
losses in certain sectors with profits in oth­
ers. However, according to the Italian Gov­
ernment, the abolition of ENEL's exclusive 
rights would result in most large-volume 
consumers turning to foreign suppliers (since 
most such consumers are located in regions 
of northern Italy, which makes it easier to 
use other suppliers, as those regions are not 
far from Italy's land borders), thus depriving 
ENEL of its main means of offsetting the 
cost of distributing electricity, which is 
increased by the need to ensure a regular 
supply to each and every consumer, includ­
ing those in remote areas or areas to which 
access is difficult. The need to make up for 
those losses would mean increasing the aver­
age price of electricity, to the detriment of 
those consumers who, either because of their 
low consumption or because they are located 
in regions from which access to foreign sup­
pliers is impossible or not economically 
worthwhile, have no alternative but to obtain 
I - 5756 
COMMISSION v NETHERLANDS 
supplies from ENEL (see paragraph 8 of the 
reply and paragraph 6 of the rejoinder). 
102. In my opinion, the Italian Govern­
ment's argument is persuasive in so far as it 
seeks to justify the maintenance of exclusive 
rights to import electricity. As repeatedly 
stated in Corbeau (paragraph 15 et seq.) and 
Almelo (paragraphs 48 and 49) cited above, 
the objective, in the context of a service of 
general economic interest, of applying uni­
form tariffs so far as possible throughout a 
country 'irrespective of the specific situa­
tions or the degree of economic profitability 
of each individual operation', 98 may require 
the establishment of a mechanism making it 
possible 'to offset less profitable sectors 
against the profitable sectors', " so that the 
need for profitable operation may in turn 
justify derogating from the rules of the 
Treaty pursuant to Article 90(2). However, 
the abolition of ENEL's exclusive right of 
importation may, for the reasons stated by 
the Italian Government, in the normal course 
of events interfere with the compensatory 
mechanism whereby ENEL sets off the 
results of unprofitable sectors against those 
of the profitable ones. This possibility is suf­
ficient, in my opinion, to justify the failure 
to comply with the Treaty by retaining that 
right. Furthermore, the Commission's claim 
that ENEL's particular task described above 
could be performed by other means cannot 
be accepted, primarily because the alterna­
tives suggested by the Commission are 
described in such general terms (economic 
aid to consumers in a disadvantageous situa­
tion, constitution of a 'National Support 
Fund') that it is impossible to determine 
whether they would ensure the performance 
of the said task fully. 
103. On the other hand, the Italian Govern­
ment has not put forward any convincing 
reasons why the abolition of the exclusive 
right to export electricity should impede the 
abovementioned task or any other particular 
task of ENEL. 10° 
98 — Sec Corbeau, paragraph 15, and Almelo, paragraphs 48 and 
49. 
99 — See Corbeau, paragraph 17, and Almelo, paragraph 49. 
100 — According to the Italian Government, apart from the par­
ticular task referred to at length in the body of this Opin­
ion, ENEL has all the obligations, as stated in paragraph 
48 of the Almelo judgment, of operators responsible for 
supplying electricity throughout the national territory, the 
obligation to encourage the selective use of energy, and 
certain special obligations relating to protection of the 
environment. However, the Italian Government has made 
no detailed submissions to show why the abolition of the 
exclusive right to import and/or export electricity would 
prevent the fulfilment of those obligations. 
In any case, the Italian Government's claim that the rights 
in question are supported by Articles 130a and 130b ofthe 
Treaty is unfountfed. Those provisions, which require the 
Community (in formulating and implementing its policies 
and developing the internal market) and the Member 
Sutes (in conducting their economic policies) to take 
account of the need to promote the economic and social 
cohesion of the Community, cannot be seen as a basis for 
the adoption by Member States of measures which 
infringe fundamental provisions of the Treaty, such as 
those relating to the free movement of goods. 
I - 5757 
O P I N I O N O F MR COSMAS — CASE C-157/94 
104. In conclusion, although ENEL's exclu­
sive right to import electricity is a prohibited 
measure having an effect equivalent to a 
quantitative restriction on imports and also a 
form of prohibited discrimination between 
nationals of Member States regarding the 
conditions under which goods are procured 
and marketed, the maintenance of that right 
is justified by the need to ensure the perfor­
mance of ENEL's particular task in operat­
ing a service of general economic interest. 
On the other hand, that consideration cannot 
justify the maintenance of ENEL's exclusive 
right to export electricity, which infringes 
Articles 34 and 37. 
(cc) France 
(i) Exclusive rights relating to electricity 
105. EDF, which was made responsible, 
under Law N o 46-628 of 9 April 1946, for 
the management of the nationalized electric­
ity undertakings, is clearly an undertaking 
entrusted with the operation of a service of 
general economic interest. The parties are 
not in agreement regarding the exact nature 
of its obligations in performing that func­
tion. Among all the arguments of both par­
ties on this question, the only ones relevant 
to the outcome of the present action are 
those concerning the legal basis and the 
scope of the obligations of EDF whose per­
formance would be impeded, according to 
the French Government, if the exclusive 
rights to import and export electricity were 
abolished. 
106. According to the French Government's 
submissions in its defence and rejoinder, the 
abolition of those rights would make it 
impossible for EDF to fulfil the following 
obligations: (1) the obligation to observe the 
principle of the equal treatment of custom­
ers; (2) the obligation to supply electricity at 
the lowest possible prices; (3) the obligation 
to conduct its operations with the smallest 
possible impact on the environment, and (4) 
the obligation to assist in the implementation 
of national policy on town and country 
planning.101 
107. According to the French Government, 
EDF's obligation to observe the principle of 
equal treatment for customers is laid down 
by Article 24 of the General Conditions 
which, after being approved by means of a 
decree, were appended to the concession 
agreement signed by the State and EDF on 
27 November 1958 (see Annex 4 to the 
defence). That agreement granted EDF the 
right to operate the general electricity power 
supply, that is to say, the high-voltage grid 
which links all the points where electricity is 
101 — In its rejoinder (paragraph 38) the French Government, in 
response to the arguments in the Commission's reply, 
appears to claim that the abolition of the exclusive riehts 
in question would make it impossible for EDF to fulfil its 
universal service obligation. However, the French Govern­
ment gives no spécifie, detailed reasons as to why it con­
siders that the removal of the exclusive rights would pre­
vent fulfilment of the latter obligation. 
I - 5758 
COMMISSION v NETHERLANDS 
generated (including the international inter­
connections through which electricity is 
imported) with the low-tension grids 
through which distribution services and 
undertakings supply electricity to final con­
sumers, and with consumers who obtain 
their supplies direct from the high-voltage 
grid. The abovementioned Article 24 (which 
is described by the French Government as a 
particular manifestation of the principle of 
equality which, according to the case-law of 
the Conseil Constitutionnel, is a constitu­
tional principle and, according to the settled 
case-law of the Conseil d'État, binds all pub­
lic services), requires EDF, as the concession-
holder for the general supply system, to treat 
all its customers on a basis of strict equality. 
108. The Commission does not doubt that 
EDF is under such an obligation. However, 
it does not consider that the General Condi­
tions appended to the concession agreement 
of 27 November 1958 or any other docu­
ment show that EDF has a particular obliga­
tion to supply electricity at the lowest pos­
sible prices. On this point the French 
Government nevertheless seeks to rely on 
Articles 20 and 22 of the General Condi­
tions, entitled 'Fixing of maximum tariffs' 
and 'Review of maximum tariffs' respec­
tively. Although those provisions do not 
expressly require EDF to adjust its tariffs to 
the lowest possible level, in my opinion they 
are as a whole inspired by that principle in 
determining the conditions under which 
EDF's tariffs for supplying electricity may 
be increased. 102 Consequendy the Commis­
sion's argument that EDF does not have the 
obligation in question here cannot be 
accepted. 
109. Finally, I cannot agree with the Com­
mission in questioning whether EDF has a 
'particular task' within the meaning of 
Article 90(2) of the Treaty in relation to the 
protection of the environment and town and 
country planning. It is true that the French 
Government does not refer, in its defence, to 
the legal basis of EDF's obligations in those 
two spheres. However, the rejoinder (para­
graph 35) mentions the provisions of the 
'contrat de plan' signed by the State and 
EDF for 1993-96 (see footnote 102),103 by 
means of which EDF was given certain 
specific obligations relating to protection of 
102 — The French Government also refers to the 'contrat de 
plan' signed by the State and EDF for the period 1993-96, 
Article 2 of which provides that EDF and the public 
authorities undertake to reduce the existing tariff levels by 
1.25%. I think this 'contrat de plan' may be taken into 
account in the present case as it had taken effect on the 
date which, as the Court has consistently held (see Case 
C-105/91 Commission v Greece, cited in footnote 54, para­
graph 21, and Case C-123/94 Commission v Greece [1995] 
ECR 1-1457, paragraph 7), must be taken into account by 
the Court in order to determine whether the failure 
alleged by the Commission exists. Clearly the 'contrat de 
plan' for 1993-96 has been in force since 1 January 1993, 
and the two-month period allowed to the French Republic 
in the Commission's reasoned opinion of 26 November 
1992 had not expired by that date. 
103 — Regarding the question whether the 'contrat de plan' can 
be taken into account in these proceedings, see footnote 
102. 
I - 5759 
O P I N I O N O F MR COSMAS — CASE C-157/94 
the environment (Article 6) and town and 
country planning (Article 11). 104 
110. What reasons are put forward by the 
French Government to show why the aboli­
tion of the exclusive rights in question would 
prevent the fulfilment of the abovemen-
tioned obligations of EDF? 
With regard to the obligation to ensure equal 
treatment for EDF's customers and the obli­
gation to supply electricity at the lowest pos­
sible price, the French Government contends 
that, if the exclusive import right were abol­
ished, EDF's customers (and, what is more, 
those who are the biggest consumers) would 
turn to foreign sources of supply, which 
would necessarily offer more competitive 
prices than those of EDF, and the resulting 
exclusion of the latter from using those 
sources would lead to an increase in the aver­
age price of electricity supplied by EDF, 
since the basis of the mechanism for setting 
tariffs is the fixing by EDF of a 'single price' 
for electricity, by reference to the average 
total cost of supplying it, regardless of 
whether it is generated in France or 
imported. 
Also, with regard to EDF's obligations in 
relation to the protection of the environment 
and town and country planning, the French 
Government claims that the loss of custom­
ers to foreign suppliers would deprive EDF 
of the economic resources necessary for the 
fulfilment of those obligations. 
111. I find the French Government's argu­
ments persuasive with regard to the impossi­
bility of EDF fulfilling its obligations to sup­
ply electricity at the lowest possible cost and 
to ensure the equal treatment of customers if 
the exclusive right to import it were abol­
ished. For the reasons given by the French 
Government, removal of that right might, in 
the ordinary course of events, lead to an 
increase in the average price of electricity, 
which would be borne precisely by those 
consumers who continued to obtain their 
supplies from EDF (unless its tariffs remain 
unchanged, which might endanger its finan­
cial equilibrium) while, at the same time, 
consumers who used foreign suppliers for 
the most part would always be able to turn 
to the national market, in reliance on the 
principle of universal public service, when­
ever foreign prices ceased to be advanta­
geous. Furthermore, the Commission's claim 
104 — According to the case-law, in order for the question of the 
application of Article 90(2) of the Treaty to arise, the 
operation of a service of general economic interest must 
have been entrusted to a particular undertaking by 'a 
measure adopted by the public authorities' (see BRT, cited 
in footnote 90, paragraph 20; Case 172/80 Züchner [1981] 
ECR 2021, paragraph 7, and Case 66/86 Ahmed Saeed 
Flugreisen [1989] ECR 803, paragraph 55). As I see it, not 
only a unilateral declaration of intent in the form of a leg­
islative or regulatory measure of a body exercising official 
authority, but also a declaration of intention of the same 
body in the context of a contractual relationship m a y b e 
regarded as 'a measure adopted by the public authorities' 
in the sense indicated, whereby the operation of a service 
of general economic interest is entrusted to a particular 
undertaking or the obligations of that undertaking for that 
purpose are specified. 
I - 5760 
COMMISSION v NETHERLANDS 
that the consumers who would probably use 
foreign suppliers are precisely those who, 
because of their size, already enjoy special 
tariffs lower than those applied to other con­
sumers, is not relevant. Special tariffs for cer­
tain categories of consumers, which are 
granted on the basis of objective criteria and 
after weighing up the consequences for 
EDF's economic equilibrium, represent a 
lawful exception to the principle of equal 
treatment which, however, cannot be permit­
ted if certain consumers, taking 'their own 
needs as the sole criterion, resort to foreign 
suppliers, thus rendering inevitable an 
increase in the price paid by the rest. 
112. On the other hand, I do not consider 
that the French Government has shown that 
abolition of the exclusive import right would 
affect EDF's obligations in relation to pro­
tection of the environment and town and 
country planning to such an extent that 
maintenance of the right would be justified 
under Article 90(2) of the Treaty. The loss of 
customers to foreign suppliers cannot, in my 
opinion, be regarded as directly and inevita­
bly making it impossible for EDF to fulfil its 
obligations in the areas mentioned above. 
113. Finally, the French Government has not 
put forward any specific argument relating 
to EDF's exclusive export right to show why 
the abolition of that right would prevent ful­
filment of the obligations just mentioned or 
the others listed in paragraph 36 of the 
French Government's rejoinder. 
114. In conclusion, although EDF's exclu­
sive right to import electricity is a prohibited 
measure having an effect equivalent to a 
quantitative restriction on imports and also 
constitutes a form of prohibited discrimi­
nation between nationals of Member States 
regarding the conditions under which goods 
are procured and marketed, the maintenance 
of that right is justified by the need for the 
fulfilment of EDF's particular task in operat­
ing a service of general economic interest. 
On the other hand, that consideration cannot 
justify the maintenance of EDF's exclusive 
right to export electricity, which infringes 
Articles 34 and 37. 
(ii) Exclusive rights relating to natural gas 
115. The Commission does not question 
that GDF is an undertaking entrusted with 
the operation of a service of general econ­
omic interest. However, it has doubts as to 
the exact nature of GDF's specific obliga­
tions in operating that service and doubts 
I - 5761 
O P I N I O N O F MR COSMAS — CASE C-157/94 
whether it is necessary for GDF to retain its 
exclusive import and export rights in order 
to fulfil those obligations. 
116. The French Government observes, 
firstly (see paragraph 20 of its defence), that 
not only does GDF hold the exclusive rights 
in question, but it has also been entrusted 
with a function in the transmission and dis­
tribution of natural gas. The transmission of 
natural gas through the high-pressure system 
for delivery to distributors and to industrial 
undertakings which obtain supplies direct 
from that system is the subject of a State 
concession. There are three concession-
holders, GDF and two other companies, one 
of which serves 12 départements and the 
other provides a special service. Distribution 
to final consumers through the low-pressure 
system is the subject of concessions by local 
government authorities. The principal 
concession-holder is GDF, but 4% of distri­
bution is handled by 15 other public under­
takings. 
117. The French Government adds that 
GDF's obligations are set out in the General 
Conditions appended to the concession 
agreement. In particular, the standard condi­
tions relating to the concession of the trans­
mission service, which were approved by 
decree of the Conseil d'État and accompany 
each concession agreement (see Annex VIII 
to the rejoinder), with any modifications 
necessary in each case, require the 
concession-holder to provide a continuous 
supply of natural gas (Article 19) and to treat 
all its customers equally (Article 23). 105 The 
standard conditions for the distribution ser­
vice, 'which were approved by decree and 
accompany each individual concession agree­
ment (see Annex IX to the rejoinder), 
require that natural gas be supplied to any 
person requesting it (Article 17), oblige the 
concession-holder to ensure continuity of 
supply (Article 19) and require it to treat all 
its customers in exactly the same way in 
every respect, no matter who they may be 
(Article 21). 106 
118. As regards the effect which abolition of 
the contested rights might have on the fulfil­
ment of GDF's obligations, the French Gov­
ernment contends, referring to the submis­
sions concerning the application of Article 
105 — It should be observed that the provision referred to in the 
rejoinder as 'Article 23' of the standard conditions for the 
concession of the natural gas transmission service is not 
the same as that shown as Article 23 in the copy of those 
conditions forming Annex VIII to the rejoinder. The latter 
Article 23 does not expressiv impose an obligation of 
equal treatment of customers by the concession-holder. 
106 — In its defence the French Government contends that GDF 
also has an obligation to ensure the supply of natural gas 
at the lowest possible price, but does not refer to a specific 
legal basis for it. 
The French Government adds that GDF has specific obli­
gations in relation to protection of the environment and 
town and country planning. However, it specifies as the 
legal basis for those obligations provisions which cannot 
be taken into account in the present action, either because 
they post-date the time-limit allowed to the French 
Republic in the reasoned opinion of 26 November 1992 
(see footnote 102), or because it is unclear whether they 
were adopted prior to that date. In particular, Article 10 of 
the 'new standard conditions' for the concession of the 
natural gas distribution service is given as the legal basis 
for the environmental obligations, but the date on which 
those conditions took effect does not appear from the 
rejoinder (see paragraph 41) or from the actual text of the 
'new' conditions (see Annex X to the rejoinder). Likewise 
with regard to the legal basis for GDF's obligations con­
cerning town and country planning, the French Govern­
ment refers to measures (Joint Ministerial Circular of 17 
February 1993, as amended by Ministerial Circular of 5 
May 1995, and the 'contrat de plan' signed by the Sute 
and GDF for 1994-96) which were adopted after the 
abovemenrioned cut-off date for the purposes of the 
present action. 
I - 5762 
COMMISSION v NETHERLANDS 
36 of the Treaty (see paragraph 78 supra) that 
as, in the countries which produce natural 
gas, production and marketing are normally 
controlled by State monopolies, GDF is 
compelled, in order to ensure the fulfilment 
of its obligation to provide a continuous 
supply, to sign contracts for exceptionally 
large quantities of gas which often contain 
onerous long-term obligations ('take or pay' 
clauses, contribution to costly investment 
programmes). If the exclusive import right 
were abolished, the only way in which GDF 
would be able to make up for the loss of cus­
tomers, who, by signing short-term contracts 
with foreign suppliers, would be able to 
obtain better prices than those offered by 
GDF (unless tariffs remained unchanged, at 
the risk of upsetting GDF's financial equilib­
rium), would be to increase the tariffs for 
consumers who remain its customers. 
Although the French Government puts for­
ward those arguments to show that the abo­
lition of the exclusive rights would make it 
impossible for GDF to fulfil its continuous 
supply obligation, they seem to me to prove 
that GDF would find it impossible to fulfil 
another obligation, that of the equal treat­
ment of customers,107 if the exclusive import 
rights were abolished, having regard also to 
the fact that customers of GDF who might 
use foreign suppliers in order to obtain bet­
ter prices than those of domestic suppliers 
would always retain the right to return to 
GDF if and when they found it necessary, in 
reliance on the principle of universal public 
service. 
119. On the other hand, the French Govern­
ment's submissions make no specific, suffi­
ciently explicit mention of the potential 
impact of the abolition of the exclusive right 
to export natural gas on the fulfilment of 
GDF's obligations. 
120. In conclusion, the maintenance of 
GDF's exclusive right to import natural gas, 
despite being a prohibited measure having an 
effect equivalent to a quantitative restriction 
on imports and also constituting a form of 
prohibited discrimination between nationals 
of Member States regarding the conditions 
under which goods are procured and mar­
keted, is justified by the need to ensure ful­
filment of GDF's particular task in operating 
a service of general economic interest. On 
the other hand, that consideration cannot 
justify the maintenance of GDF's exclusive 
right to export natural gas, which infringes 
Articles 34 and 37. 
(dd) Spain 
121. For the sake of completeness, I shall 
now consider whether, assuming that the 
Spanish legislation to which the Commission 
refers creates exclusive rights to import and 
107 — For the reasons given in footnote 105, I consider that only 
Article 21 of the standard conditions for the concession of 
the natural gas distribution service imposes on GDF an 
obligation to ensure equal treatment of customers 
— Article 23 of the standard conditions for the transmis­
sion concession docs not. 
I - 5763 
OPINION OF MR COSMAS — CASE C-157/94 
export electricity, ,os such rights could be 
deemed necessary for the performance of the 
particular task assigned to the public corpo­
ration Redesa. 
122. It is clear that Redesa, which is respon­
sible for unified Operation' of the national 
electricity system, has been entrusted with 
the operation of a service of general econ­
omic interest for the purposes of Article 
90(2) of the Treaty. However, the Commis­
sion doubts whether the exclusive rights 
which, in its opinion, have been conferred 
upon Redesa are necessary for the perfor­
mance of its particular task. 
123. The Spanish Government contends in 
its defence (page 32) that (1) pursuant to 
Article 2(1) of Law 49/84 on the unified 
operation of the national electricity system, 
Redesa has an obligation, in operating a ser­
vice of general economic interest, to ensure 
that the national market is supplied with 
electricity at the lowest possible cost and in 
such a way that security and quality of sup­
ply are ensured, and (2) the liberalization of 
international trading in electricity 'would 
affect' security of supply and 'would impede' 
supply of the national market at the lowest 
possible cost, as it would only result in 
'upward pressure on prices'. However, no 
explanation is given as to why the abolition 
of the exclusive rights referred to in the 
Commission's application would have the 
consequences mentioned. 
124. In view of this uncertainty in the Span­
ish Government's submissions concerning 
fulfilment of the requirements for the appli­
cation of Article 90(2) of the Treaty, the 
exclusive rights which, according to the 
Commission, have been granted to Redesa 
cannot be justified in any way by reference 
to that article. 
(c) Does the maintenance of exclusive rights 
affect the development of trade to such an 
extent as would be contrary to the interests of 
the Community? 
125. One final question remains: are the 
exclusive import rights existing in the Neth­
erlands, Italy and France which, as we have 
seen, are justified by the need to ensure per­
formance of the particular task assigned to 
the holders of those rights, nevertheless 
incompatible with the Treaty because they 
do not fulfil the requirement laid down in 
the second sentence of Article 90(2), that is 
to say because they affect the development of 
trade to such an extent as would be contrary 
to the interests of the Community? 108 — It will be remembered that, in my opinion, that is not the 
case (see point 41 et seq. above). 
I - 5764 
COMMISSION v NETHERLANDS 
126. The actual wording of that sentence 
(particularly the use of the phrase 'develop­
ment of trade' and the verb 'be affected') is, 
in my opinion, conducive to the conclusion 
that the draftsmen of the Treaty intended 
using that provision to exclude the applica­
tion of the derogation provided for in Article 
90(2) in relation to measures which, in addi­
tion to potentially restricting trade in the 
Community, have in practice done so, the 
restrictive effects being so great that intra-
Community trade in the sector in question is 
practically non-existent. 109 
127. I do not think the evidence presented to 
the Court in these cases shows that the 
exclusive rights in question affect intra-
Community trade in electricity and natural 
gas to such an extent in practice. Firstly, the 
defendant States have produced figures (the 
veracity of which is not questioned by the 
Commission) from which it is clear that, in 
spite of the exclusive rights in question, the 
volumes imported by the holders of those 
rights are by no means insignificant. Thus: 
— In the last few years, the holder of the 
exclusive right in question in the Nether­
lands imported 15% of the total volume 
of electricity available through the public 
distribution system (see paragraphs 26 
and 123 of the defence lodged by the 
Netherlands Government); 
— In 1993 the electricity imported by Italy 
(whose energy dependence accounts for 
about 80.5% of its total needs) rose by 
11.6% as against 1992, being approxi­
mately 40 000 million KWh, which, 
according to the Italian Government, is 
equivalent to the entire output of a coun­
try such as Austria (see paragraph 1 of 
the defence lodged by the Italian Gov­
ernment; in paragraph 4 of its rejoinder it 
adds that in 1994 17% of its total electric­
ity requirements were met by imports); 
— According to the French Government 
(see paragraph 13 of its defence), trade in 
electricity accounted for almost 10% of 
total consumption of the Community of 
the Twelve; 
— With regard to natural gas, the French 
Government claims that 90% of French 
needs are met by imports and that in 
1992 14% of the country's natural gas 
supplies were met by imports from the 
Netherlands (see paragraphs 24 and 27 of 
its defence). 
109 — See to that effect Pin C of the Opinion of Advocate Gen­
eral Rozès in Case 78/82 Commission v Italy, cited in 
footnote 41. 
I - 5765 
O P I N I O N O F MR COSMAS — CASE C-157/94 
128. Furthermore, irrespective of those fig­
ures, the fact that the existence of the exclu­
sive rights in question in the Netherlands, 
Italy and France has not affected the deve­
lopment of trade to such an extent as would 
be contrary to the interests of the Commu­
nity is also clear from the preambles to 
Council Directives 90/547/EEC and 
91/296/EEC on the transit of electricity and 
natural gas through transmission grids.110 
The sixth recital in the preamble to the direc­
tive relating to electricity states that 'there is 
increasing trade in electricity each year 
between high-voltage electricity grids in 
Europe'. There is a similar observation in the 
eighth recital in the preamble to the directive 
relating to natural gas. l n 
(d) Conclusion 
129. In view of all the foregoing, mainte­
nance of the exclusive rights to import elec­
tricity and natural gas existing in the Nether­
lands, Italy and France is compatible with 
the scheme of the Treaty, in accordance with 
Article 90(2). On the other hand, the main­
tenance of exclusive rights to export electric­
ity and natural gas existing in Italy and 
France is contrary to Articles 34 and 37 of 
the Treaty. 
IV — Conclusion 
Having regard to the foregoing observations, I propose that the C o u r t give judg­
ment as follows in the present actions: 
(1) In Case C-157/94 Commission v NetherUnds: 
— dismiss the application; 
— order the Commiss ion to pay the costs of the Kingdom of the Nether lands ; 
110 — Cited in paragraph 3. I l l — With regard to the volume of trade in electricity through 
the major interconnected grids, see also the Opinion of 
Advocate General Darmon in Almelo, points 87 et seq. 
and 170 et seq. 
I - 5766 
COMMISSION v NETHERLANDS 
— order the French Republic, Ireland and the United Kingdom to bear their 
own costs. 
(2) In Case C-158/94 Commission v Italy: 
— declare that, by maintaining exclusive rights to export electricity, the Italian 
Republic has failed to fulfil its obligations under Articles 34 and 37 of the 
Treaty; 
— dismiss the application in all other respects; 
— order each party to bear its own costs. 
(3) In Case C-159/94 Commission v France: 
— declare that, by maintaining exclusive rights to export electricity and natural 
gas, the French Republic has failed to fulfil its obligations under Articles 34 
and 37 of the Treaty; 
— dismiss the application in all other respects; 
— order each party to bear its own costs. 
(4) Case C-l60/94 Commission v Spain: 
— dismiss the application; 
— order the Commission to pay the costs of the Kingdom of Spain; 
— order the French Republic, Ireland and the United Kingdom to bear their 
own costs. 
I - 5767