2.

If we now ask ourselves whether in May 1969 there could rightly in law have been assumed to exist the conditions for applying Article 226, we must first remember the manner in which the reasoning of the disputed decision of the Commission was expressed. Therein it was, as we know, stressed that due to the decline in value of the French currency French cereals had come into German market at below the intervention price. Despite an excellent German harvest this situation had led to an appreciable increase in imports, to German cereals being pushed into the intervention system and likewise to French cereals being directly offered for German intervention. As a result this caused storage difficulties to the German intervention agency which gave grounds for fearing that the intervention system would become unworkable. As you know, these conclusions are attacked by the plaintiff with particular vehemence. In support of this the plaintiff calculates from figures which it has itself obtained, that in May there was available to the German intervention agency storage space for around 1-5 million metric tons of cereals to which there was added in August (as was already known beforehand) space for a further 480000 metric tons. They pointed out that at the end of the market year under this system due to an insufficient monthly raising of the intervention price small quantities of cereals had in any event got into the intervention system. Since as from June the supplements to the intervention prices had wholly ceased, one did not as from this month, when the new lower intervention prices had already applied, have to expect any further requests for intervention. However, as regards the intervention offers which admittedly still were to be expected during the month of May, the available storage space had been more than sufficient and an appreciable deterioration in the storage situation did not have to be feared by reason of such offers. If however there had been concern in regard to intervention offers arising from the new harvest, then this would at the most have justified protective measures with effect from 1 August 1969. In this respect one furthermore had to consider that in practive it was already known in spring of 1969, that in the summer there would be introduced in the Federal Republic of Germany the so-called ‘Intervention B’, i.e. a system of aids in respect of stocks kept by private individuals which was intended to avoid a situation whereby large quantities of cereals would immediately be added to the normal intervention system. The plaintiff contends that, looked at in this way, there had been no danger at all as regards the storage of the new harvest. I will readily admit that after reading the plaintiff's statement I was much impressed by these arguments. Indeed they could have no other effect, not only in the light of the rather slender figures that have been made available by the Community but also having regard to the principle that any application of the protective clauses of the Treaty ought to be subjected to a strict examination. Nevertheless now that we are at the conclusion of the proceedings, after thoroughly weighing up all the factors and after going more deeply into some aspects, I have considerable doubt as to whether one can agree with the plaintiff in its deductions and in its contentions that the existence of conditions justifiying the application of Article 226 had not been proved. Allow me to explain this in detail. In judging the matter one has to proceed from the point as to what at the beginning of May 1969 was the storage space situation within the framework of the Intervention system in the Federal Republic of Germany. On this point the Commission has demonstrated by means of convincing explanations (that is to say by referring to the necessity of storing cereals of different kinds, of differing quality, originating from many different customers as well as cereals requiring drying) that one could not count on the contractual assured maximum capacity (7 to 7.5 million tons), but that a far smaller real storage facility (between 5.5 to 6 million tons) had to be taken into account. If one deducts from this the space already used at the time (that is to say storage space for 4.7 million tons altogether) then one finds that usuable space of only the order of 1.3 million tons was available. As seen at the time this could indeed be regarded as a very menacing situation having regard to the new harvest. In this connection, we had to proceed from the fact that in the marketing year 1968/69 very large quantities had been transferred to the intervention system (according to figures supplied to the Commission, the intervention system had to take over in relation to Federal Republic of Germany around 2.7 million tons arising from the 1968 harvest). Furthermore, in the light of the fact that a very good new harvest could be expected one was entitled to assume that the volume of intervention would not recede to any appreciable extent (this is so even if one disregards the Federal Government's argument — disputed by the plaintiff — that even in May there had already existed contracts by German purchasers for the delivery of French cereals arising from the new harvest to a total amount of 1.8 million tons). Even the ‘Intervention B’ which was to be applied in the Federal Republic in relation to the new harvest (i.e. a system of premiums for private storage in order to relieve the normal intervention system) could not decisively affect the picture. Admittedly it allowed one to expect that certain quantities would not immediately proceed into the normal intervention system; strictly speaking however, it only constituted an interim solution, which did not exclude the possibility that in the course of the marketing year further considerable quantities would have to be released to the intervention authorities (a fact that indeed occurred in respect of 1.6 million tons of cereal up to the end of the marketing year). It can therefore certainly not be denied that during the month of May serious difficulties for the further functioning of the intervention system made their appearance. It is further not to be denied that the cereal deliveries originating in France played an important role in triggering off the difficulties. As we have heard, imports of French wheat and French barley had during the marketing year 1968/69 (up to and inclusive of April) more than doubled in comparison with the corresponding period of the preceding year, and taking the month of April alone, they had nearly trebled in comparison with April of the preceding year. Since in the following years also there was never again a corresponding amount of imports it must no doubt be assumed that in this way an appreciable displacement of German cereals occurred i.e. that there developed in this way a corresponding increase in offers to the intervention system. In the face of this already very tense situation, the decisive questions for the responsible bodies could only be whether in the months of May and June one had to expect an appreciable deterioration in the position and whether accordingly, even before the start of the new harvest the taking of protective measures was justified. As we know, this question was answered in the affirmative and I would accept that there were good grounds for this. Obviously one cannot object to this by saying — as the applicants did — that after 8 May 1969, according to statements of the applicants, only 12000 tons of French cereals had been offered, for this state of affairs in itself constitutes an effect of the protective measures that had been taken. Rather is it important to know what developments might have been feared without the promulgation of protective measures on a reasonable prognosis and proceeding from experience acquired up to that date. In this connection one must attach importance to the fact that even up to 30 April 1969385000 tons of French cereals had been taken over by the German intervention agency and that the corresponding intervention quantity during the first week of May alone had amounted to 93000 tons. It was further — more of importance, — that in the month of May supplements on the intervention prices were in force, and that offers to the intervention system therefore could certainly still be expected in that month. As the Commission has shown, in referring to the price advantages for French cereals that had become possible as a result of the decline in value of the French currency (as is known, French cereals fell by up to 40 DM below the German intervention price), one could even in the month of June and despite the lower intervention prices then applicable, expect similiar intervention offers. Looked at in this way, it was certainly not unrealistic to assume that even in the months of May and June 1969 appreciable amounts of French cereals would be added to the German intervention and it is a fact that the import statistics prepared at a later date show that during the remaining part of the marketing year — despite protective measures — 600000 tons of French cereals were still imported into the Federal Republic. These figures show unequivocally what quantities of French cereals were still available at the relevant time and consequently had to be taken into account for the purpose of the intervention. If one contrasts this with the amount of storage space available at that time within the Federal Republic (i.e. space for 1.3 million tons) then having regard to the relevant figures which I have mentioned one cannot reject the conclusion that there was looming large the danger of a considerable increase in the already appreciable difficulties. One might add besides, that this danger was not limited to a short period of time; as was shown by later developments, one could not count on a rapid settling-down of the currency situation. Having regard to the special features of the market organization in cereals, one may well assume that — adhering to the terminology of Article 226 — these were difficulties which were liable to persist. All this included would justify the conclusion that the Commission, which in the field under discussion in any event enjoys considerable discretionary powers, assumed not without good grounds that in May 1969 there existed the conditions for applying Article 226 of the EEC Treaty.