JUDGMENT OF THE COURT (Fourth Chamber)

19 December 2012 ( )

(Failure of a Member State to fulfil obligations – Directive 85/337/EEC – Assessment of the effects of certain public and private projects on the environment – Incorrect transposition – Annexe II – Point 1(a) to (c) – Judgment of the Court of Justice – Finding of infringement – Article 260 TFEU – Pecuniary penalties – Lump sum payment – Member State’s ability to pay – Economic crisis – Assessment on the basis of current economic data)

In Case C‑279/11,

ACTION under Article 260(2) TFEU for failure to fulfil obligations, brought on 1 June 2011,

European Commission, represented by P. Oliver and K. Mifsud-Bonnici, acting as Agents, with an address for service in Luxembourg,

applicant,

v

Ireland, represented by E. Creedon and D. O’Hagan, acting as Agents, E. Regan, SC, and de C. Toland, BL, with an address for service in Luxembourg,

defendant,

THE COURT (Fourth Chamber),

composed of L. Bay Larsen, acting as President of the Fourth Chamber, J.‑C. Bonichot, C. Toader (Rapporteur), A. Prechal and E. Jarašiūnas, Judges,

Advocate General: N. Jääskinen,

Registrar: T. Millet, Deputy Registrar,

having regard to the written procedure and further to the hearing on 4 October 2012,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 In its application, the European Commission initially claimed that the Court should:

– declare that, by failing to take the necessary measures to comply with the judgment of 20 November 2008 in Case C‑66/06 Commission v Ireland, Ireland has failed to fulfil its obligations under Article 260 TFEU;

– order Ireland to pay to the Commission a lump sum of EUR 4 174.80 multiplied by the number of days between the judgment in Case C‑66/06 and either compliance by Ireland with that judgment or the judgment in the present proceedings, whichever is the sooner;

– order Ireland to pay to the Commission a daily penalty payment of EUR 33 080.32 from the date of the judgment in the present proceedings to the date of compliance by Ireland with the judgment in Case C-66/06; and

– order Ireland to pay the costs.

2 By letter of 6 July 2012, the Commission amended its application. Thus, the Commission no longer asks that Ireland be ordered to pay a daily penalty payment, but requests only that that Member State be ordered to pay a lump sum of EUR 4 387 714.80.

Legal context

3 Under Article 1(2) of Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment (OJ 1985 L 175, p. 40), as amended by Council Directive 97/11/EC of 3 March 1997 (OJ 1997 L 73, p. 5) (‘Directive 85/337’), the concept of ‘project’ covers, inter alia, ‘the execution of construction works or of other installations or schemes’ and ‘other interventions in the natural surroundings and landscape including those involving the extraction of mineral resources’. The concept of ‘development consent’ is defined as ‘the decision of the competent authority or authorities which entitles the developer to proceed with the project’.

4 Article 2(1) and (3) of Directive 85/337 provides as follows:

‘1. Member States shall adopt all measures necessary to ensure that, before consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects. Those projects are defined in Article 4.

…

3. Without prejudice to Article 7, Member States may, in exceptional cases, exempt a specific project in whole or in part from the provisions laid down in this Directive.

…’.

5 Article 4 of Directive 85/337 provides as follows:

‘1. Subject to Article 2(3), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

2. Subject to Article 2(3), for projects listed in Annex II, the Member States shall determine through:

(a) a case-by-case examination;

or

(b) thresholds or criteria set by the Member State,

whether the project shall be made subject to an assessment in accordance with Articles 5 to 10.

Member States may decide to apply both procedures referred to in (a) and (b).

3. When a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account.

4. Member States shall ensure that the determination made by the competent authorities under paragraph 2 is made available to the public.’

6 Annex II to the directive lists the projects subject to Article 4(2). Point 1 of that annex, which concerns ‘Agriculture, silviculture and aquaculture’, covers, inter alia, under (a) to (c) respectively, projects for the restructuring of rural land holdings, projects for the use of uncultivated land or semi-natural areas for intensive agricultural purposes, and water management projects for agriculture, including irrigation and land drainage projects.

7 Annex III to Directive 85/337, which lists the selection criteria referred to in Article 4(3) thereof, provides, with regard to the characteristics of the projects, that those characteristics must be considered having regard, in particular, to the size of the project, the cumulation with other projects, the use of natural resources, the production of waste, pollution and nuisances and the risk of accidents, having regard in particular to substances or technologies used.

8 Concerning the location of projects, Point 2 of that annex states that the environmental sensitivity of geographical areas likely to be affected by projects must be considered having regard, in particular, to the existing land use, to the relative abundance, quality and regenerative capacity of natural resources in the area, as well as to the absorption capacity of the natural environment.

9 Point 3 of that annex, relating to ‘[c]haracteristics of the potential impact’, provides that the potential significant effects of projects must be considered having regard to the criteria set out in Points 1 and 2 of the annex, in particular the extent of the impact (geographical area and size of the affected population).

The judgment in Case C‑66/06 Commission v Ireland

10 After sending to it a request for information dated 13 September 2001, the Commission sent to Ireland, on 23 October 2001, a letter of formal notice relating to a trial salmon farm on the Kenmare estuary (County Kerry, Ireland). Ireland replied to that letter on 21 May 2002.

11 On 18 October and 19 December 2002, the Commission sent Ireland further letters of formal notice. The first of these letters set out the Commission’s position that Ireland’s transposition of Directive 85/337 was deficient with regard to the project categories set out in point 1(a) to (c) of Annex II to the directive. The second referred to deficient transposition of the directive with regard to projects falling within point 1(f) of Annex II. Ireland replied by letters of 9 April and 26 May 2003.

12 On 11 July 2003, the Commission sent Ireland a reasoned opinion calling on it to take the necessary measures to comply with that opinion within two months of its receipt.

13 The Commission, finding the position adopted by Ireland in a letter of 7 November 2003 in response to the reasoned opinion to be unsatisfactory, brought an action under the second paragraph of Article 226 EC, which gave rise to the judgment in Case C‑66/06 Commission v Ireland.

14 In that judgment, the Court held that ‘[b]y not adopting, in conformity with Articles 2(1) and 4(2) to (4) of … Directive 85/337 … all measures to ensure that, before consent is given, projects likely to have significant effects on the environment that belong to the categories of projects covered by Point 1(a) to (c) and (f) of Annex II to that directive are made subject to a requirement for development consent and to an assessment with regard to their environmental effects in accordance with Articles 5 to 10 of the directive, Ireland [had] failed to fulfil its obligations under the directive’.

The pre‑litigation procedure in the present case

15 On 22 March 2010, following an initial exchange of letters with Ireland, the Commission sent a letter of formal notice to that Member State, on the basis of Article 260(2) TFEU, in which it stated that the measures envisaged by Ireland concerning the transposition of Point 1(a) to (c) of Annex II to Directive 85/337 were unsatisfactory and requested it to submit its observations in that regard within two months of its receipt.

16 In its letter of 30 November 2010, Ireland expressly acknowledged that there were lacunae in the transposition of those provisions of Directive 85/337 and described the reforms which it proposed to remedy the lacunae.

17 The Commission subsequently concluded that Ireland had not adopted the measures necessary to ensure compliance with the judgment in Case C‑66/06 Commission v Ireland and therefore decided to bring the present action.

The failure to fulfil obligations

18 According to the Court’s established case‑law on Article 228(2) EC, the reference date for assessing whether there had been an infringement for the purpose of that provision was the date of expiry of the period prescribed in the reasoned opinion issued under that provision (see Case C-610/10 Commission v Spain [2012] ECR I‑0000, paragraph 66).

19 Since the FEU Treaty abolished the reasoned opinion stage in infringement proceedings under Article 260(2) TFEU, the reference date for assessing whether there has been an infringement for the purpose of Article 260 TFEU is the date of expiry of the period prescribed in the letter of formal notice issued in accordance with the first subparagraph of Article 260(2) (see Commission v Spain, paragraph 67).

20 During the present proceedings, Ireland has claimed that its national law has been brought into conformity with the judgment in Case C-66/06 Commission v Ireland as a result, inter alia, of the entry into force, on 8 September 2011, of Planning & Development (Amendment) (N° 2) Regulations 2011 and European Communities (Environmental Impact Assessment) (Agriculture) Regulations 2011 (‘S.I. No 456/11’ or ‘the Regulations’).

21 Thus, it is common ground that by the end of the two‑month period following Ireland’s receipt of the letter of formal notice referred to in paragraph 15 above, that Member State had not in any event adopted the legislative measures necessary to ensure compliance with the judgment in Case C‑66/06 Commission v Ireland.

22 Accordingly, it must be held that, by failing to adopt all the measures necessary to comply with the judgment in Case C‑66/06 Commission v Ireland, Ireland has failed to fulfil its obligations under Article 260 TFEU.

The imposition of a lump sum

Arguments of the parties

23 The Commission submits that, although Article 260(1) TFEU does not specify the period within which a judgment of the Court must be complied with, the importance of immediate and uniform application of European Union law means that the process of compliance must be initiated at once and completed as soon as possible, which is not the position in the present case, since, by the date on which the present action was brought, more than two and a half years had already elapsed since the delivery of the judgment in Case C‑66/06 Commission v Ireland.

24 In the present case, the Commission initially decided, in accordance with its 2005 Communication entitled ‘Application of Article 228 EC’ (SEC (2005) 1658), as updated by the 2010 Communication entitled ‘Application of Article 260 of the Treaty on the Functioning of the European Union – Up-dating of data used to calculate lump sum and penalty payments to be proposed by the Commission to the Court of Justice in infringement proceedings’ (SEC (2010) 923/3) (‘the 2010 Communication’), to request payment by the defendant Member State of both a lump sum and a daily penalty payment.

25 However, by decision of 21 June 2012, the Commission withdrew its claim that a periodic penalty payment should be imposed. It nevertheless maintains its request that Ireland be ordered to pay a lump sum, to be calculated with reference to two separate periods.

26 Accordingly, for the period between delivery of the judgment in Case C-66/06 Commission v Ireland and 8 September 2011, the date of entry into force of the Regulations designed to bring Irish law into line with that judgment, the Commission retains the factors which it initially proposed with a view to the imposition of a lump sum, having regard to the seriousness of the infringement and the need to ensure that the penalty has a deterrent effect.

27 As regards the seriousness of the infringement, the Commission proposes a factor of 7 on a scale of 1 to 20.

28 In that respect, it contends that, by setting and maintaining high national thresholds below which projects are not subject to a prior environmental impact assessment, Ireland committed a number of serious breaches of Directive 85/337 liable to cause irreparable damage to the environment. Next, it submits that the judgment in Case C‑66/06 Commission v Ireland, in which the Court held that Ireland had failed to fulfil its obligations, formed part of a pattern of settled case‑law of the Court which justifies the failure in question being regarded as more serious.

29 This, the Commission submits, is compounded by the fact that, when the Member State in issue repeats the unlawful conduct in a specific sector, that Member State then aggravates the seriousness of the alleged failure to fulfil obligations. That is the case with regard to Ireland, whose failure to fulfil its obligations under Directive 85/337 has been established by the Court on four occasions (Case C‑392/96 Commission v Ireland [1999] ECR I‑5901; Case C‑215/06 Commission v Ireland [2008] ECR I‑4911; Case C‑427/07 Commission v Ireland [2009] ECR I‑6277; and Case C‑50/09 Commission v Ireland [2011] ECR I‑0000). Furthermore, the Commission points out that the judgment in Case C‑392/96 was the subject of proceedings under Article 228 EC in Case C‑294/03 but the Commission subsequently withdrew its application. Nevertheless, Ireland has not yet complied with the Court’s judgments in Case C‑215/06 or in Case C‑50/09.

30 As regards the necessary deterrent effect in the present case, the Commission uses the ‘n’ factor which it fixed in the context of its 2010 Communication at 2.84, and which is a geometric mean based on the Member State’s gross domestic product (GDP) and the weighting of votes of that Member State within the Council of the European Union. It is apparent from that communication that the economic data used in that regard are those for 2008 (n-2).

31 On the basis of those factors and the lump sum fixed for Ireland in the 2010 Communication, namely EUR 210, the Commission takes the view that the Court should impose on that Member State an initial lump sum equal to EUR 4 174.80 (EUR 210 x 7 x 2.84) multiplied by the number of days which elapsed between the date of delivery of the judgment in Case C‑66/06 Commission v Ireland and 8 September 2011, namely 1021. That initial lump sum should therefore be EUR 4 262 470.80.

32 For a second period, between 8 September 2011 and 21 December 2011, the date on which guidelines drawing the attention of landowners to the sensitivity of certain areas and their obligations were published online, the Commission submits that the Court should impose a second lump sum of EUR 125 244, corresponding to a daily sum of EUR 1 192.80, for which a seriousness coefficient of 2 is to be used, multiplied by 105, that is to say, the number of days between those two dates.

33 The Commission essentially takes the view that the infringement relating to the first period was continuing, between 8 September and 21 December 2011, in relation to S.I. No 456/11, in so far as the public notices referred to in Regulation 19(2) of that statutory instrument had not been published. The Commission also criticises the fact that certain areas of specific environmental sensitivity in the Irish countryside had not been classified as European sites, ‘Natural Heritage Areas’ (NHAs) or nature areas. For those areas, the difficulty stems from the fact that the evaluation as to whether it was necessary to undertake an environmental assessment of a project depended on the developer being sufficiently aware that such a project was liable to have significant effects on the environment. Thus, according to the Commission, it was possible for a landowner, when his activities fell below the fixed threshold, to undertake environmentally harmful activities in those areas without being required to submit an application for an evaluation as to whether those activities necessitated an environmental assessment.

34 The Commission is also of the view that landowners had not been individually notified of the presence on their land of registered archaeological sites, with the result that it was difficult to maintain prosecutions in the event of infringement. The Commission also points out that, while a landowner is deemed to be aware of the presence of monuments on his land where a public notice listing such monuments and sites has been published, the last public notification was issued in the 1990s and Ireland did not anticipate a revision of the list with a view to new public notification until 2012, which demonstrates that not all monuments were yet fully covered by a public notice.

35 The Commission also criticises a draft guidance document for farmers published on the internet by the Department of Agriculture, Food and the Marine (DAFM), by which the latter set out an approach to interpretation and application of Regulation 3(4) of S.I. No 456/11 which placed in serious doubt the capacity of that statutory instrument to satisfy the judgment in Case C‑66/06 Commission v Ireland. Indeed, that document was a source of grave confusion as to the obligations borne by farmers.

36 Nevertheless, the Commission acknowledges that compliance with the judgment in Case C‑66/06 Commission v Ireland was finally achieved as a result of Ireland’s publication, on 22, 24, 28 and 31 December 2011, of the necessary public notices, which rendered the regulatory acts fully effective and applicable to landowners as regards numerous archaeological sites and nature areas. In particular, with regard to 630 ‘Natural Heritage Areas’ which had not been the subject of any statutory designation, the Commission accepts that Ireland remedied that lacuna by publishing a public notice on 22 December 2011 informing landowners of the sensitivity of particular areas and the obligations thereby arising. Moreover, as regards the draft guidance document published on the website of the Department of Agriculture, Food and the Marine, the Commission recognises that the amended, definitive version of that document, published on 22 December 2011, brought an end to the infringement in question.

37 For reasons of simplification, the Commission used 22 December 2011 as the date of full compliance.

38 Ireland submits, in its defence, that the promulgation of the Regulations brought Irish law fully into compliance with the judgment in Case C‑66/06 Commission v Ireland. That Member State concludes in this respect that the Court should hold that it is unnecessary to impose a periodic penalty payment as Ireland has complied with that judgment. Furthermore, Ireland submits that the Court should not impose a lump sum payment on it, particularly in view of Ireland’s low ability to pay.

39 While Ireland acknowledges that it has taken some time to comply with the judgment in Case C‑66/06 Commission v Ireland, it claims that it has, none the less, demonstrated utmost good faith concerning the fulfilment of its obligations with regard to the environment and that the delay in issue was due to political circumstances. Furthermore, Ireland submits that it encountered difficulties in drafting the measures necessary to comply with that judgment and the Commission was also closely involved in the drafting.

40 Ireland explains that, under the newly adopted regulations, the thresholds above which an environmental assessment is required have been substantially lowered. Furthermore, farmers are now required to notify the competent authority in advance of their intention to carry out agricultural activities and that authority is required to carry out a case-by-case review as to whether those activities call for a prior environmental assessment in view of the risk that such activities may have a significant impact on the environment. Only the most insignificant activities will fall below the new thresholds.

41 In so far as it was in compliance with the judgment in Case C‑66/06 Commission v Ireland by 8 September 2011, Ireland claims that there is no need to impose a lump sum payment on it. Should the Court, however, take the view that the imposition of such a lump sum is necessary, Ireland considers that, irrespective of the minimum lump sum payment set for it in the 2010 Communication, namely EUR 1 501 000, the daily lump sum penalty actually imposed by the Court should not exceed EUR 630 per day, with the result that the total lump sum should not exceed EUR 643 230.

42 In any event, Ireland contests the methodology used by the Commission to calculate the value of ‘n’, corresponding to Ireland’s ability to pay. The Commission, Ireland submits, uses data relating to 2008, even though, between 2008 and 2010, Ireland’s GDP decreased by 7.4% in real terms and by 13.3% in nominal terms, due to the high exposure of the Irish economy to the economic and financial crisis. Furthermore, as the population of Ireland also grew by 2.5% between the 2006 census and that of 2011, the GDP per capita also decreased. In addition, Ireland’s inflation rate has increased and its budgetary deficit increased from 7.3% of GDP in 2008 to 32.4% of GDP in 2010. Similarly, its debt increased from 44.4% of GDP in 2008 to 96.2% of GDP in 2010 and, according to certain estimates, to an estimated 110.8% of GDP in 2011. Ireland also points out that, precisely as a result of the economic difficulties which it has encountered, it has, inter alia, received financial support amounting to EUR 85 billion (55% of its GDP) from the International Monetary Fund, the European Union’s European Financial Stability Mechanism, Ireland’s own National Pension Reserve Fund and bilateral loans from the Kingdom of Denmark, the Kingdom of Sweden and the United Kingdom of Great Britain and Northern Ireland.

43 Therefore, the use of 2008 figures in calculating the level of any penalty payment would be inappropriate and lead to the imposition of disproportionate penalty amounts. The Court, Ireland also argues, has recently taken into account such a line of argument in paragraph 42 of its judgment in Case C‑407/09 Commission v Greece [2011] ECR I‑0000. Ireland infers from this that, assuming that the Court follows the Commission’s methodology, only a coefficient of 1 could be used in order to reflect Ireland’s ability to pay.

44 Furthermore, Ireland, emphasising its good will in the steps taken by it to transpose Directive 85/337 and the fact that it had been criticised for the incorrect transposition of only certain provisions of the directive, disputes the seriousness coefficient of 7 applied by the Commission. Ireland also claims that, in the light of the existence of other strict standards in Irish law, inter alia precautionary standards, and because of good agri-environmental practices in the Irish countryside, the defects affecting the measures transposing Directive 85/337 did not lead to negative effects on the environment.

45 Ireland submits that a seriousness coefficient of 3 would be appropriate, in particular when compared with that applied in the judgment in Case C‑278/01 Commission v Spain [2003] ECR I‑14141.

46 Ireland also claims that its public authorities were engaged in a constructive process of dialogue with the Commission on the content of the legislative proposals to be enacted following the judgment in Case C‑66/06 Commission v Ireland. According to Ireland, the delay in the enactment of those measures was attributable to the fact that they fell within a complex legislative framework involving consultation with interested parties and encompassing planning, environmental and agricultural law.

47 As regards Ireland’s claim that it is not necessary to impose a lump sum payment on it, the Commission points out that the Court of Justice has unlimited jurisdiction and that it can even go beyond what is suggested by the Commission, as demonstrated by the amount imposed on the French Republic in the judgment in Case C‑304/02 Commission v France [2005] ECR I‑6263.

48 As regards the current economic difficulties faced by Ireland, which, according to that Member State, justify a dispensation from the lump sum payment or the imposition of a reduced sum, the Commission takes the view that there is no legal basis for Ireland’s argument in this regard and that, furthermore, in the case which gave rise to the judgment in Case C‑407/09 Commission v Greece, invoked by Ireland, the Court specifically rejected the defendant Member State’s request that no lump sum payment be imposed on it, in the light of its serious economic problems.

49 The Commission recognises that it is essential to act on the basis of reliable, stable and definitive data. However, it states that such data relating to one full calendar year are subject to revisions during a twelve‑month period, with the result that, as regards the year 2010, the data are reliable only from 2012. The Commission states that, because of the current economic crisis, it has decided that it will henceforth update the factor ‘n’ for the different Member States on an annual basis and that, in respect of Ireland, the factor was reduced on 1 September 2011 from 2.84 to 2.71 in Commission Communication SEC (2011) 1024 final and, on 31 August 2012, from 2.71 to 2.60 in Commission Communication COM(2012) 6106.

50 However, the Commission takes the view that it is appropriate to use the factor ‘n’ as calculated at the time when the application was lodged. Should the Court prefer to base its decision on the latest updated data, the Commission can provide it with those data.

51 As regards the seriousness of the infringement, the Commission considers that the recent adoption of the statutory instruments of 8 and 12 September 2011 in no way reduces the gravity of the infringement which persisted from 20 November 2008, the date of the judgment in Case C‑66/06 Commission v Ireland, until 8 September 2011, thus justifying the imposition of a lump sum payment under the conditions initially sought by that institution. However, the Commission uses only a factor of 2 for the period between 8 September and 22 December 2011.

52 The Commission disputes Ireland’s contention that hedgerows have not been seriously affected by reason of the persistent incorrect transposition. That line of argument, it submits, runs directly counter to paragraph 70 of the judgment in Case C‑66/06 Commission v Ireland. In the light of paragraphs 79 to 82 of that judgment, the same is true of Ireland’s claim that the Planning and Development Regulations 2001 provided valuable safeguards. Furthermore, the Commission is of the opinion that Ireland has provided no evidence whatsoever to substantiate its claim that 10 000 km of hedgerows have been replanted or rejuvenated and over 3 000 km maintained under agri-environmental schemes. Nor has Ireland provided evidence to support its assertion that over 4 500 farmers have signed up for species-rich grassland.

53 The Commission also points out that Ireland does not in any way contest the fact that the case-law on Directive 85/337 was already clear prior to the judgment against it in Case C‑66/06 Commission v Ireland or that it has been the subject of numerous sets of infringement proceedings in relation to the environment. Furthermore, that Member State has not adduced any evidence to show that the degree of seriousness of its infringing behaviour is less than that held against the Kingdom of Spain in the case which gave rise to the judgment in Case C‑278/01 Commission v Spain.

54 The fact that Ireland engaged in a dialogue with the Commission with a view to adopting the measures necessary to comply with the judgment in Case C‑66/06 Commission v Ireland does not, according to that institution, shorten the duration of the infringement.

55 In its rejoinder, Ireland points out that the Commission ultimately does not dispute that its transposing legislation, as amended on 8 September 2011, now meets the requirements of Directive 85/337. According to that Member State, the Commission focuses, in fact, on minor aspects which do not in any way affect the implementation of that directive. In that regard, Ireland disputes the Commission’s reading of the requirements laid down by its national law. In particular, the Commission wrongly claimed that S.I. No 456/11 would not be fully efficient until certain public notices had been published. The same is true as regards the scope of Regulation 19(2) of that statutory instrument, which, according to Ireland, has the sole object of establishing that, where an area is referred to in a published public notice, an accused person cannot defend a prosecution by relying on the fact that he or she did not personally have knowledge of the relevant designation.

56 Referring in particular to Regulation 7(1)(e) of S.I. No 456/11, Ireland states that every monument listed for protection is the subject of either an individual or a public notice. As to the fact that the list of the sites to be protected will be revised from 2012 to 2015, this only demonstrates Ireland’s ongoing commitment to protection of its monuments and archaeological sites. Ireland does not see how such future developments would render ineffective the implementation in its territory of Directive 85/337.

57 As regards the initial guidance document, Ireland rejects the Commission’s criticisms, while at the same time indicating that it none the less made some adjustments in the context of the final document published on 22 December 2011 on the internet site of the Department of Agriculture.

58 With regard to the imposition of a lump sum payment, Ireland takes the view that this is not necessary. If, however, the Court decides to impose such a payment, that Member State submits that the amount of that lump sum should be significantly less than that proposed by the Commission and should be based on the multiplication of a standard flat-rate amount of EUR 210 per day by a seriousness coefficient of 3 and by an ‘n’ factor of 1.

59 In that regard, Ireland claims that, with a view to the adoption of an appropriate, proportionate and just measure, the Court should base its decision on the most up-to-date macro-economic data possible, given that Ireland’s ability to pay has undergone a dramatic change since 2008.

60 Furthermore, the Commission, in proposing henceforth a yearly revision, implicitly recognised in its Communication SEC (2011) 1024 final that revision of the ‘n’ factor and other economic parameters for financial penalties every three years was insufficient, particularly in times of economic crisis.

61 In any event, Ireland disputes that the ‘n’ factor established in the 2010 Communication can be used and claims that, if it is not possible for it to use more up-to-date data, the Court should base its decision on the ‘n’‑factor calculated in the Commission’s latest communication, even though that communication was published after the date on which the present action was brought.

62 Ireland points out that a reduction in the amount of the lump sum sought by the Commission is not liable to undermine the objective of deterrence since a reduced level of penalty in times of economic crisis will have just as dissuasive an effect on a Member State as a higher level of penalty would in ‘normal’ economic conditions.

63 Ireland also maintains that a seriousness coefficient of 3 would be appropriate so far as it is concerned, in particular in the light of the condition of biodiversity and of the Irish countryside. That Member State submits several documents, in particular relating to its hedgerows and grasslands, in support of its claims.

64 Should the Court find that its failure to fulfil its obligations continued after 8 September 2011, which it disputes, Ireland calls on the Court to take the view that any failure is significantly less serious than that in issue during the period prior to 8 September 2011, especially since the failure alleged by the Commission does not concern the adoption of the transposition measures as such but the way in which those measures were implemented in practice.

Findings of the Court

65 The imposition of a lump sum under Article 260 TFEU is based essentially on the assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach has persisted for a long period after the judgment initially establishing it was delivered (see Case C‑121/07 Commission v France [2008] ECR I‑9159, paragraph 58).

66 It is for the Court, in each case, in the light of the circumstances of the case before it and the degree of persuasion and deterrence which appears to it to be required, to determine the appropriate financial penalties, such as the imposition of a lump sum, in particular with a view to preventing similar infringements of European Union law from recurring (see Case C‑121/07 Commission v France, paragraph 59).

67 As to whether a lump sum payment should be imposed, it should also be pointed out that this must, in each individual case, depend on all the relevant factors pertaining to both the particular nature of the infringement established and the individual conduct of the Member State involved in the procedure instigated pursuant to Article 260 TFEU (see Case C‑121/07 Commission v France, paragraph 62).

68 In the present case, it is clear that the Irish authorities adopted the regulations necessary for compliance with the judgment in Case C‑66/06 Commission v Ireland almost three years after the delivery of that judgment.

69 Next, it is true that, for the legitimate purpose of ensuring that the specific measures envisaged for compliance with that judgment would in fact meet the requirements of the judgment, the Irish authorities devised those measures in consultation with the Commission. The fact nevertheless remains that the Court had already established a considerable body of case‑law on the interpretation of the provisions of Directive 85/337 and has found on a number of occasions that Ireland has failed to fulfil its obligations under the directive.

70 Where a Member State repeatedly engages in unlawful conduct in such a manner in a specific sector governed by European Union rules, this may be an indication that effective prevention of future repetition of similar infringements of European Union law may require the adoption of a dissuasive measure, such as a lump sum payment (see Case C‑121/07 Commission v France, paragraph 69).

71 As regards the argument that political circumstances delayed the adoption of the measures in question, it is sufficient to recall that a Member State cannot plead provisions, practices or situations prevailing in its domestic legal order to justify failure to observe obligations arising under European Union law (see Case C‑407/09 Commission v Greece, paragraph 36 and the case‑law cited).

72 As regards the seriousness of the infringement, where failure to comply with a judgment of the Court is likely to harm the environment, the protection of which is, indeed, one of the European Union’s policy objectives, as is apparent from Article 191 TFEU, such a breach is of a particularly serious nature (see Case C‑121/07 Commission v France, paragraph 77 and the case-law cited).

73 That is the case in these proceedings, in which, inter alia, the definition of the new thresholds entered into force only on 8 September 2011, so that, at least up to that date, certain projects likely to have effects on the environment within the meaning of Directive 85/337 may have been implemented without any prior environmental impact assessment, in breach of the judgment in Case C‑66/06 Commission v Ireland and, in particular, of the finding at paragraph 85 of that judgment.

74 That said, as regards the period between 8 September 2011 and 22 December 2011, it is clear that the infringement of which the Commission accuses Ireland is less serious. Moreover, while it is true that Ireland adopted measures intended to address the Commission’s objections, that institution has been not able to identify specific instances in which landowners had not been made sufficiently aware of the extent of their obligations and had, as a result, undertaken projects likely to have significant effects on the environment, in particular in sensitive areas and those forming part of the Natural Heritage Areas, without being made subject to a procedure for the assessment of such effects, as required by Directive 85/337. On that point, the defendant Member State claimed, without being contradicted by the Commission, that 21 requests for assessment in the light of the requirements of Directive 85/337 were submitted in Ireland between 2 October and the end of December 2011. In those circumstances, it must be held that the Commission has failed to show that the measures transposing the directive were not implemented effectively.

75 In the light of all the foregoing circumstances, the Court considers that the imposition on Ireland of the payment of a single global lump sum is justified.

76 As regards the amount of that lump sum, it should be noted, first, that if the Court decides to impose a lump sum payment, it must, in exercising its discretion, do so in a manner that is, on the one hand, appropriate to the circumstances and, on the other, proportionate both to the breach that has been established and the ability to pay of the Member State concerned (see Case C‑568/07 Commission v Greece [2009] ECR I‑4505, paragraph 47 and the case-law cited).

77 While the Commission’s suggestions are a useful point of reference, they cannot in any event bind the Court. Similarly, while guidelines such as those in the notices of the Commission help to ensure that the Commission acts in a manner which is transparent, foreseeable and consistent with legal certainty, they do not bind the Court (see, to that effect, Case C-109/08 Commission v Greece [2009] ECR I‑4657, paragraph 27 and the case‑law cited).

78 In the present case, in addition to the considerations set out at paragraphs 68 to 74 above, account must be taken of Ireland’s ability to pay as it stands in the light of the latest economic data submitted for appraisal by the Court (see, to that effect, Case C‑407/09 Commission v Greece, paragraph 42). Thus, it is necessary to take account of recent trends in inflation and the GDP of that Member State at the time of the Court’s examination of the facts (see Case C‑610/10 Commission v Spain, paragraph 131).

79 In the present case, those data, which were provided by Ireland and have not been substantively challenged by the Commission, indicate that that Member State’s ability to pay has to a certain degree been diminished in the context of economic crisis.

80 In the light of all the foregoing considerations, the circumstances of the case are fairly assessed by setting the amount of the lump sum which Ireland will have to pay, under Article 260 TFEU, at EUR 1 500 000.

81 Ireland must, therefore, be ordered to pay to the Commission, into the account ‘European Union own resources’, a lump sum of EUR 1 500 000 million.

Costs

82 Under Article 138(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and Ireland has been unsuccessful, the latter must be ordered to pay the costs.

On those grounds, the Court (Fourth Chamber) hereby:

1. Declares that, by failing to take the measures necessary to comply with the judgment of 20 November 2008 in Case C‑66/06 Commission v Ireland, Ireland has failed to fulfil its obligations under Article 260 TFEU.

2. Orders Ireland to pay to the Commission, into the account ‘European Union own resources’, a lump sum of EUR 1 500 000.

3. Orders Ireland to pay the costs.

[Signatures]