Opinion of Mr Advocate General Mancini delivered on 9 February 1988. - Groupement de producteurs de coton "Omada Paragogon Vamvakiou Andrianou-Gizinou & Sia Thiva/EGA" v Hellenic Republic. - Reference for a preliminary ruling: Polymeles Protodikeio Athinon - Greece. - Agriculture - Production aids - Cotton producers' group - Legal form. - Case 8/87.



European Court reports 1988 Page 01001



Opinion of the Advocate-General

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Mr President,

Members of the Court,

1 . In proceedings between Andrianou-Gizinou & Co . and the Greek finance authorities concerning investment aid , the Polimeles Protodikio ( High Court ), Athens, has asked the Court to interpret Council Regulation No 389/82 of 15 February 1982 on producer groups and associations thereof in the cotton sector ( Official Journal 1982, L 51, p . 1 ). In particular, the national court wishes to know whether the Member States are obliged to grant the benefits provided for under that measure once the applicable conditions are fulfilled and whether, in making a selection among the applications for aid, they may exclude certain groups by reason of their legal form .

Andrianou-Gizinou, an agricultural company incorporated under Greek law, is a cotton producers' group recognized under Article 2 of the abovementioned regulation . On 5 October 1984 it submitted an investment project consisting in the purchase of a cotton harvester . The project was approved by the competent national authorities, which included it in the general investment programme forwarded to the Commission of the European Communities . The Commission approved that programme by Decisions 83/106 of 7 March 1983 ( Official Journal 1983, L 66, p . 18 ) and 85/412 of 23 July 1985 ( Official Journal 1985, L 229, p . 19 ).

Since the applications for investment aid exceeded the amount provided for under the programme, the Greek authorities decided to make a selection among the applications by giving preference to groups organized on a cooperative basis . Andrianou-Gizinou brought an action before the Polimeles Protodikio, Athens, against the refusal to grant it aid, and by a decision of 30 June 1986 that Court referred the following questions to the Court of Justice for a preliminary ruling :

( a ) Pursuant to Articles 4 and 5 of Regulation ( EEC ) No 389/82, are Member States under an obligation to grant aid to recognized producer groups in respect of investments made within the framework of the objectives of those provisions, in so far as such investments have been approved and included in the annual economic aid programme of the Member State?

( b ) Once an investment has been approved and included in a Member State' s economic aid programme and has been carried out by an approved producer group, may that Member State, on the basis of the same provisions in conjunction with the intent of the aforementioned regulation, after a selection and to the detriment of a group which is not organized on a cooperative basis, grant such aid to another group which is organized on a cooperative basis?

In the proceedings before the Court, written observations were submitted by the parties to the main proceedings and by the Commission . The Commission and the Greek Government also appeared at the hearing .

2 . As the Commission rightly points out, the reference to Article 4 contained in the first question is the result of a misunderstanding . In fact only Article 5 is relevant to the problem raised by the national court . According to that article, "the Member States shall grant to ... groups and associations thereof constituted on the basis of Article 2, aid for investments :

( a ) necessary for :

the implementation of the common rules ... (( and )) marketing;

( b ) ... to be used by the group or associations ...;

( c ) which form part of programmes approved ...".

Clearly, the essential question is to determine whether or not the phrase "shall grant" is obligatory in nature . The Greek Government argues that it is not . I take the opposite view . When they make conduct obligatory, Community provisions do not qualify the verb which expressed the content of the obligation with an auxiliary verb (" must", "are required to ") but use directly the present indicative . The EEC Treaty offers numerous examples of that technique, the greater part of which refer to the Member States ( see Articles 5, 6, 11, 12, 14 ( 3 ) and ( 6 ), 15 ( 2 ), 16, 17 ( 2 ) and ( 3 ), 18, 23 ( 1 ), 27, 31 to 33, 35, 37 ( 1 ) and ( 2 ), 40, 50, 53, 64, 67, 68, 71, 72, 74, etc .).

3 . Let me now turn my attention to the second question . According to the Greek Government, far from discriminating against producer groups by reason of their legal form the authorities applied objective criteria . That argument is not convincing . It is contradicted by the national court, which bases its reference on the issue of the form taken by the groups among which the selection was made, and by the Greek Government itself, which referred to the fact that Andrianou-Gizinou is a commercial undertaking run for profit in order to justify its refusal to grant the aid . It is well known that cooperatives are distinguished from other companies precisely inasmuch as they operate principally for the mutual benefit of their members .

It is therefore necessary to examine Article 2 ( 1 ) ( c ) of Regulation No 389/82 . It provides that the Member States are to recognize producer groups which "have legal personality or sufficient legal capacity to exercise rights and be subject to obligations ...", which clearly shows that account is not to be taken of the form in which the group is constituted . Consequently, the Member States cannot deny certain groups the benefit of the scheme provided for in the regulation merely because they have been set up in a particular form .

Furthermore, such a difference in treatment would be incompatible with the prohibition of discrimination which, under the second subparagraph of Article 40 ( 3 ) of the Treaty, must characterize the implementation of the common agricultural policy . It is also contrary to the Court' s case-law : see, in regard to the concept of a farmer practising farming as his main occupation, the judgment of 18 December 1986 in Case 312/85 Villa Banfi v Regione Toscana (( 1986 )) ECR 4039, at paragraph 10 .

4 . On the basis of all the foregoing considerations, I propose that the Court should reply as follows to the questions referred to it by the Polimeles Protodikio, Athens, by decision of 30 June 1986 in the proceedings pending before it between Andrianou-Gizinou & Co and the Greek finance authorities :

( a ) Article 5 of Regulation No 389/82 must be interpreted as meaning that Member States are obliged to grant aid applied for by a recognized producer group in respect of investments to be made within the framework of the objectives set out in that provision, in so far as such investments have been approved and included in the annual economic aid programme;

( b ) That article, read together with Article 2, must be interpreted as meaning that Member States cannot exclude certain producer groups from the benefits provided for by the regulation solely by reason of their legal form .

(*) Translated from the Italian .