6.

In fact the Commission had already been prompted in Regulation No 1771/77 of 29 July 1977 to reduce the coefficient from 1.80 to 1.60. By Regulation No 746/79 of 11 April 1977, which came into force on 28 May 1979 as the result of a “thorough study”, it again reduced the compensatory amounts applicable to maize groats and maize meal together with those on other products processed from cereals (in particular maize starch and wheat starch): — for high-quality flour (maize flour coming under tariff heading 11.01 EII) the coefficient was reduced from 1.02 to 0.92 (whilst the coefficient for the “levy on maize” remained fixed at the same amount), — for maize groats and maize meal coming under tariff heading 11.02 A V (a) (1) and (2) the coefficient, which was 1.80, was fixed at 1.50, — for maize germ, even in the form of flour, coming under tariff heading 11.02 GII the coefficient was reduced from 0.75 to 0.68 whilst the coefficient for the “levy on maize” remained fixed at 0.75, — for flour for fodder (maize bran coming under tariff headings 23.02 AI (a) and (b)) from 0.10 to 0.09 and 0.32 to 0.29 respectively, whilst the “levy” coefficients were maintained respectively at 0.10 and 0.32. — All those amendments came into force on 28 May 1979. The justification which the Commission put forward for those amendments in Bulletin of the European Communities (Commission) No 4 of 1979 (p. 41) is that they were made “so as to reflect more accurately the technical conditions of processing and the relationship between these products”. The relatively long period fixed for the application of the two above-mentioned regulations shows, according to the Commission, “that they constitute only an improvement of the system and not the correction of monetary compensatory amounts calculated in accordance with a method which is basically wrong” and that “furthermore, the second amendment formed part of a ‘more complete’ review of the methods of calculating compensatory amounts which also concern other sectors (in particular milk products and meat)”. Certainly, the validity of a regulation cannot be challenged on the basis of facts which occur subsequently, as the Court held in its judgment of 13 June 1972 in the Compagnie d'Approvisionnement case ([1972] ECR 391 at p. 407), and those amendments cannot be considered as showing that the contested regulations are invalid. Nevertheless, comparison of the provisions contained in those regulations with the provisions of subsequent regulations indicates inequality of treatment which was not justified either by differences in the facts of the situation or by general considerations unrelated to the application of Article 2 (2) of Regulation No 974/71; that inequality can only be explained by an error made in the calculation of the incidence of the monetary compensation affecting the basic product which was subsequently recognized, albeit in veiled terms, by the Commission. Furthermore, the Commission has on at least two occasions conceded that it was manifestly mistaken in a context very closely related to these cases: By Regulation No 546/71 of 15 March 1971“whereas it appears that the fixed amounts whereby the subsidies (granted on the importation into France from Member States and non-member States) and the compensatory amounts (charged by France on the exportation to Member States and non-member countries) have been fixed for flour of common wheat and of mesiin, rye flour, (durum) wheat groats and meal, (common) wheat groats and meal have led, through a manifest error, to over-compensation of the effects of the measures referred to in Articles 1 and 2 of Regulation (EEC) No 1586/69” the Commission retroactively reduced the compensatory amounts charged by France on exportation. By Regulation No 751/75 of 21 March 1975“whereas recent experience has shown that the method used heretofore for the calculation of monetary compensatory amounts for certain processed products [from cereals] has led to amounts the level of which is higher than the... incidence [on the price of the processed product of the application of the compensatory amount to the prices of the relevant basic product]; whereas this results or could result in trade flows such that competition is distorted and the smooth functioning of the common organization of the market endangered; whereas there should be fixed for the products concerned a compensatory amount based on data corresponding more closely to the actual situation”, the Commission again altered the compensatory amount on those products. To summarize my observations at this stage, I find that the choice of the coefficient 1.80 has resulted in increasing artificially exports of maize groats and meal from countries with hard currencies, a development which the Commission expressly recognized as early as July 1977 although the system was in fact intended to prevent artificial distortion in trade arising from currency fluctuations and not to cause or aggravate such distortion. It is thus impossible to rely upon the need to mediate in a conflict, in view of “wider” economic interests, a situation in which it is in fact difficult to perceive the manifest error. In the present case it was necessary only to take account of the technical conditions for processing maize and not to appraise as a whole the situations on the market in cereals or “the long-term development of patterns of trade”. I must emphasize that such considerations are in order only where the point at issue is the very principle of the introduction of compensatory amounts or the inclusion of certain products or groups of products in the system; they are irrelevant to the detailed rules for calculating the amounts once their introduction has been decided. The Commission is not prohibited from making certain “improvements” to the initial system but, for the reasons which I have explained, I consider that those “improvements” constitute confirmation of actual or possible distortion in competition. Whilst certain differences continue to exist between the calculations of the plaintiffs, the French Government and the Commission, the total of the compensatory amounts charged on the processed products as a whole may not in any event exceed the amount applied to the basic product. If the fixed-rate coefficient of 1.80 for meal or groats does not correspond to economic realities the remedy is to fix an equation-more in accordance with those realities and to make allowance for the entire incidence of the amounts affecting the other derived products, although the importance of the incidence is reduced by the application to such products of a reduced processing coefficient, or to reduce the contested amounts by the over-compensation divided between the secondary products in proportion to their weight. Nevertheless this Court may not, at any rate within the framework of Article 177, put itself in the place of the legislature in order to choose between the two methods set out in Question 3 of the third case before it. Under Article 6 of Regulation No 974/71 of the Council it is for the Commission alone to fix the compensatory amounts. Even if those amounts are annulled as a result of a direct action it is for the institution whose act has been declared void to take the necessary measures to comply with the judgment annulling those amounts, relying upon an expert's report if necessary. With regard to limiting the effects of a “declaration of invalidity” as the Commission suggests that this Court should do, I merely observe that such a derogation from the erga omnes effect of an annulment is provided for only within the framework of an action for annulment (Article 174); it is by no means a requirement within the framework of Article 177 since by definition a “declaration of invalidity” can directly benefit only the plaintiffs in the main actions within the limits of their conclusions and of the subject-matter of their applications.