OPINION OF ADVOCATE GENERAL

MENGOZZI

delivered on 28 June 2007 1( )

Case C‑456/05

Commission of the European Communities

v

Federal Republic of Germany

(Failure of a Member State to fulfil obligations – Article 43 EC – Psychotherapists admitted to practise – System of quotas – Derogating transitional rules – Proportionality – Admissibility)

I – Introduction

1. In this action, brought on 23 December 2005, the Commission of the European Communities has applied to the Court to declare that the Federal Republic of Germany has failed to fulfil its obligations under Article 43 EC by applying the transitional rules or ‘established rights’, on the basis of which psychotherapists obtain admission or a permit to practise the profession independently of the applicable rules governing admission to practise the profession, only to those psychotherapists who have carried out their activities under German statutory sickness insurance schemes and by not taking into account the comparable or similar professional activities of psychotherapists in other Member States.

II – Legal framework

A – Community law

2. The first paragraph of Article 43 EC prohibits restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State.

3. The second paragraph of that article provides, inter alia, that freedom of establishment is to include the right to take up and pursue activities as self-employed persons under the conditions laid down for its own nationals by the law of the country where such establishment is effected.

B – The German legislation

4. By the Law of 16 June 1998 concerning the professions of psychological psychotherapist and psychotherapist specialising in children and adolescents, amending the Fifth Book of the Social Code (‘Book V’) and other legislation (Gesetz über die Berufe des Psychologischen Psychotherapeuten und des Kinder- und Jugendlichenpsychotherapeuten, zur Änderung des Fünften Buches Sozialgesetzbuch und anderer Gesetze), ( ) the Federal Republic of Germany, from 1 January 1999, inter alia, integrated those professions into the statutory health insurance scheme and made admission to practise subject to a quota system reflecting the actual need for treatment.

5. The transitional provisions set out in Paragraph 95(10) and (11) of Book V, as amended by the abovementioned law of 16 June 1998, provide an exception to the application of the quota system reflecting the actual need for treatment.

6. Paragraph 95(10) of Book V provides as follows:

‘Psychotherapists are permitted to provide care under the statutory sickness insurance scheme if:

1. they have, by 31 December 1998, fulfilled the conditions concerning authorisation, in accordance with Paragraph 12 of the Law [of 16 June 1998], and those concerning qualifications, in accordance with point 3 of the second subparagraph of Paragraph 95c [of Book V], and have applied to be admitted to practise;

2. they have lodged a certificate of admission to practise by 31 March 1999;

3. they took part, in the period from 25 June 1994 to 24 June 1997, in psychotherapeutic outpatient treatment of persons insured under the statutory sickness insurance scheme.

The admissions board shall rule on applications for authorisation before 30 April 1999.’

7. From the point of view of the application of the transitional rules, the provisions of Paragraph 95(11) of Book V are identical to those in Paragraph 95(10).

8. The transitional measures came into force on 17 June 1998.

9. In a judgment of 8 November 2000, the Bundessozialgericht (Federal Social Court) (Germany) interpreted Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V. It is clear from that judgment that, having regard to the purpose of the Law of 16 June 1998, an exception to the principle of admission to practise in accordance with the actual need for treatment may be made in difficult cases, bearing in mind that such an advantage is justified only if the psychotherapist concerned has opened a surgery in his own name and is the principal care provider in it. The Bundessozialgericht therefore considered, on the one hand, that a link must remain between the place where the practice is located during the period between 25 June 1994 and 24 June 1997 referred to in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V and the continued operation of the surgery by the psychotherapist, who was admitted to practise with effect from 1 January 1999, and, on the other, that the participation in psychotherapeutic treatment referred to in the abovementioned provisions is generally considered worthy of protection and is not therefore subject to the quota system once 250 hours of treatment have been dispensed during a continuous period of 6 to 12 months during the period laid down in those same provisions.

III – Pre-litigation procedure

10. In 1999, the Commission received several complaints from Austrian and Italian psychotherapists who had established themselves in Germany before 1 January 1999 concerning the refusal of the competent German authorities to admit them to practise independently of the actual need for care on the ground that the applicants had not, or had not sufficiently, taken part in providing psychotherapeutic care for persons covered by the statutory medical insurance scheme during the period between 25 June 1994 and 24 June 1997, referred to in Paragraph 95(10)(3) of Book V (hereinafter sometimes referred to as ‘the reference period’).

11. By letter of 10 December 1999, the Commission informed the German Government of its doubts as to the compatibility of the transitional provisions in Book V with Article 43 EC.

12. In its reply, by letter of 11 January 2000, the German Government indicated that to take account, in addition to the activities carried on under the statutory sickness insurance scheme, of professional activities carried on earlier in other places in the European Community would run counter to the protection of established rights within the meaning of the transitional provisions in Book V.

13. By letter of 30 October 2000, the Commission gave formal notice to the Federal Republic of Germany that, having regard to the Court’s case-law, Article 43 EC required the German authorities to verify whether the professional activity carried on by the complainants in their Member State of origin was, of its nature, comparable or analogous to the activity provided for in the transitional provisions in Book V and was of sufficient duration to be regarded as worthy of protection within the meaning of those provisions.

14. After considering the Federal Republic of Germany’s reply to the formal notice, the Commission, by letter of 21 December 2001, delivered a reasoned opinion in accordance with Article 226 EC.

15. On 20 March 2002, the German Government repeated its initial observations to the effect that the provisions of the contested legislation were not contrary to Article 43 EC and that it did not see any need to amend them. It also referred to the abovementioned judgment of the Bundessozialgericht in which that court had drawn attention to the protection of ‘established rights’, which was the purpose of the contested transitional provisions in Book V.

16. Since it considered that the Federal Republic of Germany had not adopted the measures necessary to comply with the reasoned opinion within the two-month time‑limit accorded to it, the Commission brought the present action.

IV – Form of order sought

17. The Commission claims that the Court should:

– declare that the Federal Republic of Germany has failed to fulfil its obligations under Article 43 EC by applying the transitional rules or ‘established rights’, on the basis of which psychotherapists obtain admission or a permit to practise the profession independently of the applicable rules governing admission to practise the profession, only to those psychotherapists who have carried out their activities under German statutory sickness insurance schemes and by not taking into account the comparable or similar professional activities of psychotherapists in other Member States;

– order the Federal Republic of Germany to pay the costs.

18. The Federal Republic of Germany contends that the action is inadmissible or, in any event, without foundation.

V – Failure to fulfil obligations

A – The admissibility of the action

1. Arguments of the parties

19. In its defence, the Federal Republic of Germany contends that the action is inadmissible on four grounds. First of all, the action has not been brought against a current infringement of the EC Treaty inasmuch as it has not been possible to adopt a decision concerning admission to practise on the basis of the transitional rules in Book V for nearly seven years. Secondly, the Commission, as guardian of the Treaties under the procedure provided for in Article 226 EC, cannot merely support the interests of individuals against a Member State; the Commission therefore has no interest in bringing the present action. Thirdly, even if it is accepted that there has been an infringement of the provisions of the Treaty, the failure to fulfil obligations complained of is so marginal that it does not justify initiating the procedure laid down in Article 226 EC. Finally, in its application, the Commission extended the subject-matter of the dispute, as defined during the pre-litigation phase of the procedure, inasmuch as it now considers that the right of establishment of German psychotherapists having gone to other Member States during the period referred to in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V is impeded.

20. The Commission rejects all of those allegations and claims that the application is fully admissible. It points out that the transitional provisions in Paragraph 95(10) of Book V continue to produce legal effects, as is shown by the cases of the two complainants mentioned during the pre-litigation procedure and the application. Those complainants have also brought proceedings in the German courts against the refusal to apply the provisions in question to them and those courts have informally stayed the substantive proceedings before them while awaiting the outcome of the action for failure to fulfil obligations in this case.

2. Assessment

21. Although the last three objections of inadmissibility put forward by the Federal Republic of Germany must clearly be rejected, the first one, to my mind, raises more difficulty and could even lead the Court, as I propose in points 29 to 60 of this Opinion, to declare the present action inadmissible.

22. With regard to the objections which should be rejected, I consider, first, that the German Government cannot argue that the Commission has no interest in bringing this action on the ground that the purpose of these proceedings for failure to fulfil obligations is to protect the private interests of the two psychotherapists mentioned during the pre-litigation phase and in the application.

23. According to case-law, when exercising its powers under Article 226 EC, the Commission does not have to show that there is a specific interest in bringing the action since its function is to ensure, of its own motion and in the general interest, that the Member States give effect to Community law and to obtain a declaration of any failure to fulfil the obligations deriving therefrom with a view to bringing it to an end. ( ) Furthermore, it is for the Commission alone to determine whether it is expedient to take action against a Member State and to choose the time at which it will bring an action for failure to fulfil obligations. ( )

24. In addition, in this case, the general nature of the order sought in the application, drafted in identical terms to the reasoned opinion, suggests that the action for failure to fulfil obligations is not necessarily limited to the complainants mentioned during the pre-litigation procedure and in the application.

25. In any event, it seems to me that the fact that the general interest in bringing to an end an alleged infringement of Community law, which it is for the Commission to assess, might possibly contribute to satisfying the interest which private persons have in seeing their individual situations resolved on the basis of Community law, even indirectly, cannot be criticised as such.

26. Equally, the argument put forward by the German Government based on the extension of the subject-matter of the dispute as defined during the pre-litigation procedure, to the effect that the application now claims that Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V also affect the right of establishment of German psychotherapists who move to other Member States during the period referred to in those provisions, cannot be accepted.

27. That argument appears to misunderstand the subject-matter of the dispute, which is limited to a declaration that the defendant has failed to fulfil its obligations under Article 43 EC by reason of the prohibition, flowing from the transitional provisions in Book V, on taking into account professional activity carried on by a psychotherapist under the statutory sickness insurance scheme of a Member State other than the Federal Republic of Germany in order to permit him to remain established in the place of his choice in the latter Member State independently of the actual need for care. However, having regard to that subject-matter, the general nature of which was made clear in the wording of the reasoned opinion and repeated in identical form in the form of order sought in the application, it does not matter whether the abovementioned professional activity was carried on in other Member States by German nationals or nationals of other Member States. That fact is inherent in the subject-matter of the dispute, which deals, not with discrimination directly on grounds of the nationality of the psychotherapists, but with an alleged restriction on freedom of establishment based on the place where the psychotherapists had practised their profession during the period referred to in the transitional provisions in Book V. Consequently, it has not been shown that the application has enlarged the subject-matter of the dispute as defined in the pre-litigation procedure in such a way as to render the application inadmissible on that ground.

28. Finally, with regard to the claim based on the marginal nature of the failure to fulfil obligations, a question which goes more to the substance of the application than to its admissibility, it is sufficient to bear in mind that a restriction on freedom of establishment is prohibited by Article 43 EC even if it is of limited scope or minor importance. ( )

29. On the other hand, the first objection of inadmissibility raised by the German Government, alleging the absence of a current breach of the Treaty, is not wholly without foundation.

30. As has already been pointed out, that government contends that since applications for admission to practise under the transitional provisions in Book V had to be lodged no later than 31 December 1998 and that the admissions boards had to grant permission to practise no later than 30 April 1999, the alleged failure to fulfil obligations can no longer be brought to an end. To that must be added that the Commission allowed more than four years to pass after the German Government’s reply to the reasoned opinion before bringing the present action. That dilatory conduct could explain why there are still cases pending before the national courts.

31. The Commission replies that the transitional provisions laid down in Paragraph 95(10) of Book V still produce legal effects in the situations set out in the application and must be applied by the German courts in pending cases.

32. The Commission, therefore, seems to claim that the alleged failure to fulfil obligations is still current and, consequently, that the action is admissible in so far as the transitional provisions laid down in Paragraph 95(10) of Book V still produce legal effects, which are manifested in concrete terms by the existence of cases pending before the national courts, brought by the psychotherapists mentioned in the pre-litigation procedure and the application, concerning the application of those transitional provisions, even after the expiry of the time‑limit of two months fixed in the reasoned opinion of 21 December 2001.

33. It should be pointed out, first of all, that the Commission in no way denies the German Government’s objection of inadmissibility in regard to Paragraph 95(11) of Book V. It would appear that the explanation for that admission is that the situations of the psychotherapists mentioned in the pre-litigation procedure and the application seem to fall exclusively under Paragraph 95(10) of Book V. ( ) In any event, having regard to the position adopted by the Commission in its reply, I consider that the objection of inadmissibility raised by the German Government concerning Paragraph 95(11) of Book V should be accepted.

34. Secondly, the question linked to the continuance of the legal effects of the failure to fulfil obligations remains with regard to Paragraph 95(10) of Book V.

35. As I have already pointed out, the Commission’s mission under Article 226 EC permits it, inter alia, to obtain a declaration of any failure to fulfil the obligations deriving from Community law with a view to bringing it to an end. ( )

36. It may usefully be recalled that, under Article 226 EC and according to case-law, the Commission may bring an action for failure to fulfil obligations before the Court only if the Member State concerned does not comply with the reasoned opinion within the period laid down by the Commission for that purpose ( ) and, in addition, the existence of such a failure to fulfil obligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion. ( )

37. In my Opinion, delivered on 15 February 2007, in Case C-237/05 Commission v Greece, currently pending before the Second Chamber of the Court, I have already argued that, generally speaking, Article 226 EC implies that proceedings for failure to fulfil obligations brought by the Commission for the purpose of obtaining a declaration that Community law has been infringed will be inadmissible if the infringement has ceased before the expiry of the time-limit laid down in the reasoned opinion. ( ) In so far as the purpose of the procedure provided for in Article 226 EC is to bring the infringement of Community law to an end, where the infringement was terminated before the expiry of the period laid down in the Commission’s reasoned opinion, there is in principle no ground for considering that there is an interest in pursuing the action. ( )

38. That is the only possible solution when the termination of the alleged infringement of Community law results from the action of the Member State concerned in a way which is in accordance with the reasoned opinion.

39. Thus, the Court dismissed as inadmissible an action for failure to fulfil obligations in which it was claimed that the Member State concerned had adopted several legislative measures which, after verification by the Court, turned out to have been repealed before the expiry of the period set in the Commission’s reasoned opinion. ( ) That is not the case here since the provisions of Paragraph 95(10) of Book V have not been formally repealed and the Federal Republic of Germany took no action to comply with the reasoned opinion before the expiry of the period fixed therein.

40. The fact remains that, as I have also pointed out in point 37 of my abovementioned Opinion, there is no reason why an action should not also be, in principle, inadmissible when the infringement has ceased to produce legal effects before the date fixed by the reasoned opinion without any particular action of the kind required by the Commission being taken by the Member State. ( )

41. Thus, in a judgment of 27 October 2005, the Court, of its own motion, dismissed as inadmissible an action for failure to fulfil obligations in which the Commission complained that the Italian Republic had authorised the conclusion of public supply and service contracts by way of private negotiations, in the context of an ordinance of the Italian President of the Council of Ministers declaring a state of emergency on the national territory for the purposes of aerial forest firefighting, contrary to the Community provisions on public contracts and Articles 43 EC and 49 EC. ( )

42. In its judgment, the Court stated that that ordinance, which was no longer in force at the expiry date of the state of emergency, had exhausted all its intrinsic effects before the period laid down in the reasoned opinion had expired and even before the Commission had sent the letter of formal notice. ( ) The Court also pointed out that the action for failure to fulfil obligations did not seek to call into question the subsequent acts adopted pursuant to that ordinance, namely the acts and measures taken for the purposes of the award of public contracts on the basis of those provisions of the ordinance, which had been explicitly referred to in the reasoned opinion. ( )

43. To my mind, that judgment is clearly relevant to the issue before the Court in this case.

44. The Court, considering that the ordinance had ceased to produce any legal effect at the expiry date of the state of emergency and had exhausted all its intrinsic effects before the period laid down in the reasoned opinion had expired, appears to have accepted that the subsequent acts and measures adopted pursuant to the contested ordinance (contracts for supplies, for example) ( ) did not constitute legal effects of that ordinance capable of causing the failure to fulfil obligations to continue independently of their inclusion in the very subject-matter of the action. In my opinion, that is how the repeated references in the judgment to the fact that the failure to fulfil obligations complained of did not call into question the subsequent acts should be interpreted. Although interpretation a contrario is often dangerous, it appears that it may be deduced from the grounds of the judgment that if the failure to fulfil obligations complained of before the Court had included those acts and measures, as had the Commission’s reasoned opinion, then the action would have been declared admissible.

45. In this case, it is important to bear in mind, on the one hand, that the only psychotherapists who could benefit from the application of the transitional provisions contained in Paragraph 95(10) of Book V were those who had, at the very least, lodged their applications for admission to practise no later than 31 December 1998 and had taken part in outpatient care dispensed to persons covered by statutory sickness insurance schemes in the period from 25 June 1994 to 24 June 1997 and, on the other, that the quota system entered into force on 1 January 1999 and that the admissions boards were required to adopt a decision on applications for admission to practise before 30 April 1999.

46. Thus, the transitional provisions expired once the (definitive) quota system entered into force on 1 January 1999. They continued to produce effects until 30 April 1999, the final date on which the admissions boards were to decide on applications, lodged no later than 31 December 1998, for admission to the profession of psychotherapist in a given locality, independent of the actual need for care. Since 1 May 1999, more than three years before the end of the period fixed by the reasoned opinion which the Commission delivered on 21 December 2001, no further application could have been granted on the basis of the transitional provisions in Book V. With the exception of those which are the subject of legal proceedings, all the decisions of the admissions boards are now definitive. The Commission seems to concede that point when it claims that the number of persons concerned cannot increase because the transitional provisions in Book V concern only a clearly defined period in the past ( ) and that the alleged failure to fulfil obligations is still current only because of the cases pending before the national courts, brought by the two psychotherapists mentioned in the application.

47. Is the latter circumstance sufficient to consider that the transitional provisions in Paragraph 95(10) of Book V have not ceased to produce effects, as the Commission claims?

48. To my mind, it would be wrong to assimilate the existence of pending cases concerning the application of the transitional provisions in Paragraph 95(10) of Book V to legal effects which those dispositions supposedly continue to produce after the expiry of the period fixed in the reasoned opinion in order to render the application admissible.

49. If the Court refuses, as it did in Case C-525/03Commission v Italy, to accept that a contract based on a regulatory measure, in this case an ordinance, which has expired before the end of the period fixed in the reasoned opinion constitutes in itself a legal effect of that measure, capable of keeping alive the alleged failure to fulfil obligations (independently of its inclusion in the subject-matter of the action), it should a fortiori come to the same conclusion in regard to effects in the form of the two cases pending before the national courts mentioned in the application, which are linked to the transitional provisions in Paragraph 95(10) of Book V in a way which is even more indirect than the link between the contested ordinance and the measures subsequently adopted on the basis of it which underlie the abovementioned judgment in Commission v Italy.

50. Moreover, it is stated in this case that the subject-matter of the alleged failure to fulfil obligations does not include the legal effects thereof constituted by the cases pending before the national courts but covers only the transitional provisions in Book V.

51. It may be added that, if the Commission’s argument were to be accepted, it would amount to declaring the action admissible even though the defendant Member State can no longer comply with the reasoned opinion by adopting, in order to bring the infringement to an end, provisions of a binding nature which have the same legal force as those which the Commission regards as contrary to Community law, ( ) since the bringing to an end of the infringement would necessarily be subordinated to the delivery of judgment by the national courts, to the same effect as the Commission’s application to the Court, in all the cases pending before them at the date fixed in the reasoned opinion.

52. More generally, the Commission’s approach means that the defendant Member State’s obligation is not to correct the infringement, since it has become impossible or impractical to comply with the reasoned opinion, but to bring to an end all the effects produced by the supposed past infringement. To my mind, that goes beyond the powers conferred on the Commission by Article 226 EC.

53. Obviously, there is no question of denying the Commission any possibility of bringing an action for failure to fulfil obligations against a Member State in respect of an isolated infringement.

54. Such a situation would arise where, although the isolated infringement and its effects had ceased before the expiry of the period fixed in the reasoned opinion, the Commission had not had the time to go through all the steps in the pre-litigation procedure before the infringement ceased. ( ) To declare the action inadmissible in such a situation would amount to rewarding the fact that the infringement had been ‘consummated’, even though the Commission could not have taken action before it had ceased and thereby prevent the infringement from producing effects. ( ) According to case-law, an action also cannot be declared inadmissible if the Commission had acted in good time to prevent the infringement. ( )

55. In my opinion, that is not the case here.

56. The Commission had more than 10 months between the adoption of the transitional provisions in Paragraph 95(10) of Book V and the final deadline of 30 April 1999 laid down in that provision for initiating and completing the pre-litigation procedure, whereas it commenced that procedure only by delivering formal notice on 30 October 2000.

57. Moreover, the Commission has not referred to any circumstance which would have prevented it from completing or, at the very least, initiating the pre-litigation procedure within the abovementioned period.

58. In particular, it has not claimed that, by reason of any ambiguity in the transitional provisions in Paragraph 95(10) of Book V, it could not be certain at the time that those provisions were adopted that they would not apply to psychotherapeutic care dispensed under the statutory sickness insurance scheme of a Member State other than the Federal Republic of Germany and did not become certain of that fact until the admissions boards began to apply and interpret Paragraph 95(10) of Book V as not so applying and that, consequently, the failure to fulfil obligations could have been discovered only between 1 January and 30 April 1999, during which period the admissions boards were ruling on applications for admission to practise, and which might have proved too short a time in which to complete the pre-litigation procedure. Moreover, I note that the Commission had no doubt as to the interpretation of the terms of Paragraph 95(10)(3) of Book V inasmuch as it refers only to outpatient psychotherapeutic care carried out under the national statutory sickness insurance scheme, independently of the way in which that provision was applied.

59. In addition, the Commission has also not claimed that the alleged failure to fulfil obligations was of such complexity that a period of a little more than 10 months from the adoption of Paragraph 95(10) of Book V was insufficient to initiate and conduct the pre-litigation procedure before that paragraph produced the effects that the Commission attributes to it.

60. I therefore consider that the Commission could have acted in good time so as to prevent, by means of the procedures available to it, the failure to fulfil obligations producing the effects which the Commission attributes to it.

61. Under those circumstances, I propose that the Court should declare the present action for failure to fulfil obligations inadmissible.

62. If the Court agrees with that proposal, it could usefully be added that such a conclusion should in no way lead the national courts before which the abovementioned cases are pending to draw any conclusion, in the absence of a reference for a preliminary ruling under Article 234 EC, as to whether or not the argument put forward before them by the psychotherapists concerned regarding the incompatibility with Community law of the transitional provisions in Book V is well founded.

63. On the other hand, if the Court does not agree that the present action should be declared inadmissible, it must rule on whether or not the alleged failure to fulfil obligations is well founded.

64. It is therefore solely in the alternative that I will now consider the substantive issues raised in this case.

B – Substance

1. Arguments of the parties

65. The Commission considers that the transitional provisions in Book V constitute a restriction on freedom of establishment and are indirectly discriminatory inasmuch as psychotherapists who, during the period fixed by the contested transitional provisions, practised their profession, essentially, under the statutory sickness insurance schemes of Member States other than the Federal Republic of Germany are not permitted to take advantage of those provisions. It refers to the situation of two of the complainants mentioned in the pre-litigation phase of the procedure who were established in Germany during the three-year period laid down in Paragraph 95(10)(3) of Book V in a place which, under the definitive rules introduced by the Law of 16 June 1998, was subject, from 1 January 1999, to a quota system based on the actual need for care but were not permitted to practise within the statutory sickness insurance scheme, as provided for in that paragraph, on the ground that they had not dispensed the requisite number of hours of psychotherapeutic treatment during a continuous period of six months under the German statutory sickness insurance scheme. The Commission points out that even though the psychotherapists could, in theory, continue to practise their profession in the place in which they had become established upon their arrival in Germany, they were not entitled to provide care under the statutory sickness insurance scheme, thereby depriving them of the only realistic means of maintaining their practice in the place in which they had initially chosen to establish themselves.

66. The Commission adds that the discrimination is all the more flagrant inasmuch as German psychotherapists are not always required, in practice, to have already worked in the area where they wish to establish themselves. In other words, once they have provided care under the German statutory sickness insurance scheme during the period fixed in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V and performed the required number of hours of treatment, they can rely on that fact in order to be permitted to practise within the statutory sickness insurance scheme even if they have established themselves in another area. That, at least, was the practice of the competent German authorities until the delivery of the abovementioned judgment of the Bundessozialgericht.

67. The Commission also argues that the transitional provisions in Book V are of such a nature as to dissuade a German psychotherapist from leaving Germany in the exercise of his right of establishment during the period fixed in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V.

68. The Commission accepts that, in the context of the general reorganisation of the psychotherapists’ profession in Germany, the protection of the established rights of psychotherapists who had practised in a particular location in that Member State could be essential to fulfil imperative requirements in the general interest.

69. It also accepts that the transitional provisions are adapted to the objectives which they seek to achieve, namely, on the one hand, to permit psychotherapists already established for several years in a geographical area subject, from 1 January 1999, to quotas by reason of a surplus of available care to continue to practise as before and, on the other, to ensure that only a limited number of psychotherapists benefited from the transitional provisions in Book V, so as not to endanger the principal objective of the Law of 16 June 1998, namely to prevent overcapacity and ensure uniform provision of psychotherapeutic care under the statutory sickness insurance scheme across the entire national territory.

70. The Commission none the less considers that limiting the benefit of the transitional provisions in Book V to applicants having previously practised in Germany during the period fixed in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V was not essential to achieving the desired objectives.

71. In the Commission’s view, it can be seen from the judgment in Vlassopoulou ( ) and the judgments which followed it that the hours worked by the psychotherapists from other Member States within the statutory sickness insurance scheme in their Member State of origin should have been taken into account in determining whether the transitional provisions in Book V could be applied to them. Once national legislation requires proof of some professional experience, as a condition of access to the exercise of a professional activity or the grant of an advantage, the Member States cannot, under Article 43 EC, systematically exclude from consideration professional experience obtained in other Member States. That result would also be in accordance with the Court’s case-law on the interpretation of Article 39 EC.

72. Moreover, the purpose of the transitional provisions in Book V would not be endangered if comparable or equivalent professional activity carried on by psychotherapists in other Member States was recognised as previous activities worthy of protection. In this case, the Commission considers that there is every reason to suppose that a limited number of psychotherapists who had provided care within the statutory sickness insurance scheme of other Member States during the period fixed in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V were concerned by the application of those provisions. Moreover, the Commission indicates that the German Government has produced no evidence in support of the proposition that the objective of preventing a surplus of available care would have been endangered if the situation of such psychotherapists had been taken into account.

73. According to the Federal Republic of Germany, the transitional provisions in Book V are not discriminatory. Those provisions are intended to protect established situations regarded as worthy of protection, namely the situations of psychotherapists established in a region of Germany in which they have practised their profession for some time within the statutory sickness insurance scheme. By adopting the transitional provisions in Book V, the national legislature took care to ensure that the definitive rules introduced by the Law of 16 June 1998 did not force those persons to move and lose their patients. It is in the very nature of the situations at issue that they can be established only in a specific place in German territory.

74. In the view of the Federal Republic of Germany, the Commission has misinterpreted the legislation at issue by considering that German psychotherapists could enjoy the benefit of the transitional provisions in Book V regardless of the place in which they wished to practise and even if they were not already established there. Such an interpretation is also contrary to that accepted by the Bundessozialgericht in its abovementioned judgment, which is quite rightly based on the objectives which the national legislature sought to achieve and limited the benefit of the transitional provisions in Book V to psychotherapists who had provided care during the period fixed in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V in the place in which they submitted their application for admission to practise within the statutory sickness insurance scheme independently of the actual need for care.

75. Although the German Government admits that it is possible that some psychotherapists established in German territory were admitted to practise without fulfilling the condition that the place in which they previously provided care must be the same as the one in which they wished to practise from 1 January 1999, those are cases in which the contested legislation was incorrectly applied. Such unlawful admissions to practise cannot provide a basis for a claim of discrimination against psychotherapists from other Member States.

76. According to the German Government, if the transitional provisions in Book V were to be applied to psychotherapists who had practised under statutory sickness insurance schemes in other Member States, the result would be that those persons would be more favourably treated than psychotherapists established in Germany. According to that government, a psychotherapist who had practised in Essen for several years within the statutory sickness insurance scheme and who moved to Munich, where he worked for only two months during the period fixed in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V, could not continue to practise there if the quota had been exceeded, whereas a psychotherapist who had practised in a city in another Member State within the statutory sickness insurance scheme of that State and moved to Munich under the same circumstances would be able to continue to practise within the statutory sickness insurance scheme, notwithstanding the fact that the quota had been exceeded.

77. The Federal Republic of Germany adds that the Vlassopoulou judgment is irrelevant. That case concerned the mutual recognition of diplomas and professional qualifications, and the credit to be given for periods of training. In this case, however, the right to practise the profession of psychotherapist independently of the actual need for care is in no way being denied to psychotherapists from other Member States by reason of a lack of professional qualification. Contrary to what the Commission believes, since the essential condition of the contested legislation is to fix a psychotherapist in a particular place in German territory so as to determine the established rights that are worthy of protection, it is not relevant to take account of professional activity carried on abroad during the period fixed in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V.

78. Finally, having regard to the objectives which the contested legislation seeks to achieve, the German Government contends that the wider application of the transitional provisions in Book V, which the Commission wishes, would significantly increase the level of care available in those parts of German territory which are subject to the planning scheme.

2. Assessment

a) Preliminary remarks

79. As Advocate General Stix-Hackl very aptly put it in her Opinion, delivered on 4 October 2001, in Commission v Spain, ( ) the Member States, in compliance with Community law, generally make self-employed persons subject to various regulations of the market which govern either the activities of those operators or, at an earlier stage, regulate access to the market by reference to certain criteria. In the case of the latter regulations, there are both qualitative restrictions on access to the market, first and foremost, minimum qualifications for market operators, and quantitative restrictions on access to the market, for example, licences or quota systems.

80. In this case, it is common ground that the alleged infringement does not concern qualitative conditions for access to the market related to the professional qualifications of psychotherapists, a profession which, as the Commission indicated in its application, is subject to a general system for the mutual recognition of professional qualifications provided for by Council Directive 89/48/EEC of 21 December 1988 on a general system for the recognition of higher-education diplomas awarded on completion of professional education and training of at least three years’ duration ( ) and by Council Directive 92/51/EEC of 18 June 1992 on a second general system for the recognition of professional education and training to supplement Directive 89/48/EEC. ( )

81. The Commission also does not complain directly that the Federal Republic of Germany introduced, from 1 January 1999, quantitative restrictions, in the form of quotas based on the actual need for care, on access to the profession of psychotherapist in its territory.

82. On the other hand, it complains that the Federal Republic of Germany has excluded from the benefit of the transitional provisions in Book V, which preceded the introduction of the abovementioned quota system by providing for a limited exception to that system in order to preserve the established rights of certain psychotherapists, essentially those who provided outpatient care under the statutory sickness insurance schemes of other Member States during the period fixed in the transitional provisions.

83. The transitional provisions in Book V thus regulate the conditions under which psychotherapists whose qualifications are recognised in Germany are admitted to practise within the statutory sickness insurance scheme by way of exception to the quota system introduced with effect from 1 January 1999 by the Law of 16 June 1998. Those conditions have not been harmonised at Community level. Consequently, the Member States remain, in principle, competent to define them. However, in accordance with case-law, they must, when exercising their powers in this area, respect the basic freedoms guaranteed by the Treaty, ( ) among which is the freedom of establishment provided for in Article 43 EC.

84. It must therefore be considered whether, as the Commission claims, the transitional measures constitute a restriction on freedom of establishment which cannot be justified by imperative requirements in the general interest.

b) The existence of a restriction on freedom of establishment

85. As the Commission summarises the situation, without being contradicted by the Federal Republic of Germany, only those psychotherapists who, during the period fixed in Paragraph 95(10)(3) and Paragraph 95(11)(3) of Book V, namely from 25 June 1994 to 24 June 1997, either have treated patients in Germany under the German statutory sickness insurance scheme or treated patients in other Member States to the extent that the treatment was covered by the German statutory sickness insurance scheme, in accordance with Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, as amended, ( ) may benefit from the exception provided for in the transitional provisions in Book V.

86. On the other hand, all psychotherapists who had established themselves in Germany after 24 June 1997 but before the end of the transition period, namely 31 December 1998, and all psychotherapists who established themselves in Germany during the reference period, but only from January 1997, were excluded from the benefit of the exception, with the effect that they were unable to carry out the required 250 hours during a continuous period of 6 to 12 months, because the reference period came to an end on 24 June 1997, which, by definition, prevented such psychotherapists from doing six continuous months of work within the German statutory sickness insurance scheme.

87. According to case-law, Article 43 EC prohibits any rule capable of placing nationals of other Member States in a legal or factual situation which is less favourable than the situation, in the same circumstances, of a national of the Member State of establishment. ( ) That article also requires the elimination of restrictions on freedom of establishment, that is to say all measures which prohibit, impede or render less attractive the exercise of that freedom. ( )

88. In this case, as the Commission admits, the transitional provisions in Book V in no way prevent psychotherapists who provided care during the reference period, essentially, under the statutory sickness insurance schemes of Member States other than the Federal Republic of Germany from establishing themselves in the latter State or remaining established there.

89. On the other hand, for members of that profession to be able to retain their establishment in the place of their choice, if it is subject, since 1 January 1999, to a quota system based on the actual need for care, they must have provided care under the German statutory sickness insurance scheme under the conditions laid down in Paragraph 95(10) and (11) of Book V.

90. Such rules place psychotherapists who provided care under the statutory sickness insurance schemes of other Member States in a factual situation which is less favourable than that of psychotherapists who had provided the same care under the German statutory sickness insurance scheme. As is illustrated by the situation of the complainants mentioned in the parties’ written pleadings, the former are mostly nationals of Member States other than the Federal Republic of Germany whereas the latter are generally German nationals.

91. In any event, such rules render less attractive the exercise of freedom of establishment in so far as a psychotherapist who provided care during the reference period, essentially, under the statutory sickness insurance schemes of other Member States will not be able to remain established in Germany in the place of his choice, if it is a place in which there has been found to be a surplus of available care and for which quotas were introduced from 1 January 1999, unless that psychotherapist provides care outside the statutory sickness insurance scheme, which makes his treatment more costly to his patients.

92. Although the transitional provisions in Book V could produce a similar effect on the situations of German psychotherapists who did not provide care, or sufficient care, under the German statutory sickness insurance scheme during the reference period, the refusal to take account of care provided under the statutory sickness insurance schemes of other Member States, which, essentially, affects psychotherapists who are nationals of other Member States more than those of German nationality, leads me to conclude that the transitional provisions in Book V constitute a restriction on freedom of establishment.

93. It must therefore be considered whether, as the Commission claims, such a refusal is also unjustified in terms of the objectives which the Federal Republic of Germany is seeking to achieve.

c) The justification of the restriction on freedom of establishment

94. It follows, however, from the Court’s case-law that national measures liable to hinder or make less attractive the exercise of the freedom of establishment guaranteed by the Treaty will be justified only if they fulfil imperative requirements in the general interest; if they are suitable for securing the attainment of the objective which they pursue; and do not go beyond what is necessary in order to attain it. ( )

95. It is common ground in this case that the transitional provisions in Book V seek to achieve a double objective. On the one hand, they seek to permit psychotherapists who had established a practice in Germany in the past to continue to practise, in the interest of the protection of established rights and the protection of legitimate expectations, notwithstanding the surplus of available care found to exist, in a place subject to quotas after 1 January 1999. On the other hand, they seek to ensure, by means of the conditions which they lay down, that only a limited number of psychotherapists will be entitled to be admitted to practise independently of the actual need for care, without which the principal objective which the definitive rules introduced by the Law of 16 June 1998 seeks to achieve, namely to prevent overcapacity and ensure a uniform level of psychotherapeutic care to persons covered by the statutory sickness insurance scheme in the territory of the Federal Republic of Germany, would not have been achieved.

96. It should be borne in mind that the Commission concedes that the protection of the established rights and legitimate expectations of psychotherapists who, in the past, practised their profession in a place subject to quotas since 1 January 1999, which underlies the adoption of the transitional provisions in Book V, may be regarded as imperative requirements in the general interest.

97. Moreover, the Commission quite rightly considers that the pursuit of such objectives in the general interest by the Member States is not contrary to Community law.

98. The Court has held that substantive rules of community law must be interpreted, in order to ensure respect for the principles of legal certainty and the protection of legitimate expectations, as applying to situations existing before their entry into force only in so far as it clearly follows from their terms, objectives or general scheme that such an effect must be given to them ( ) and that, although an individual cannot place reliance on there being no legislative amendment whatever, the principle of legal certainty requires that the legislature take account of the particular situations of traders and provide, where appropriate, adaptations to the application of the new legal rules. ( )

99. In that context, the Community judicature has not merely verified that measures adopted by the Community institutions respect the vested rights of individuals, acquired under the rules applicable before the new provisions introduced by those measures, ( ) but has also considered whether, in accordance with the obligation imposed by a directive, a Member State had adopted the measures necessary to provide transitional protection for the acquired rights of third parties in regard to the reproduction and distribution of musical works, in respect of which the rights of exploitation had entered the public domain under the previous national legislation before the date on which the directive was transposed into national law but which had revived as a result of the extension of the term of protection of copyright and related rights in application of the directive and with effect from its entry into force. ( )

100. I thus see no objection from the point of view of Community law to a Member State, in the exercise of its residual powers, trying, as in this case, to limit, by adopting transitional measures, the negative effects of the entry into force of legislation introducing a definitive quota system for the practice of the profession concerned by preserving the established situation, acquired before the entry into force of the new legislation, of certain operators who fulfil the objective conditions laid down in the transitional provisions at issue, without which those operators would have to give up their practice within the statutory sickness insurance scheme in the place in which they are established.

101. It should also be pointed out that the Commission does not deny that the transitional provisions in Book V are suitable for securing the attainment of the double objective set out in point 95 of this Opinion. In particular, the Commission admits – in my view, correctly – that by referring to the conduct of psychotherapists before the entry into force of the definitive quota system introduced by the Law of 16 June 1998, namely participation in psychotherapeutic care during the reference period, the transitional provisions in Book V prevent the persons concerned from trying to fulfil rapidly, just before, or at the time of, the entry into force of the legislation introducing the quota system, the conditions for obtaining admission to practise independently of the actual need for care. As the Commission points out, the group of persons entitled is thereby limited to psychotherapists who did not seek to comply expressly with the new legislation but who were already in practice within the statutory sickness insurance scheme, independently of the quota system applicable to their profession which was to enter into force on 1 January 1999.

102. On the other hand, the dispute in this case concerns the question whether the transitional provisions in Book V are or are not proportionate in nature.

103. The Commission considers that to permit psychotherapists who had provided care during the reference period under the statutory sickness insurance schemes of other Member States to enjoy the benefit of the transitional provisions in Book V would not endanger the double objective which the German legislature sought to achieve. In any event, the Federal Republic of Germany has adduced no evidence to show that such would have been the consequence of permitting those psychotherapists to enjoy the benefit of the contested provisions.

104. I find the argument on which the Commission relies to arrive at that conclusion unconvincing.

105. I certainly do not wholly disagree with the general line of reasoning that, having regard to the Vlassopoulou judgment concerning the mutual recognition of diplomas and professional qualifications, and the case-law on the interpretation of Article 39 EC, ( ) professional activity carried on during a certain period in another Member State, comparable to that carried on during the same period in Germany, must not be left out of consideration once the national legislation whose application is at issue requires, as a condition for the exercise of a given profession, in particular, that evidence must be provided of such professional activity in Germany.

106. However, consideration of whether a given national measure is proportionate must be carried out specifically in relation to the precise objectives which that measure seeks to achieve. To my mind, such consideration also implies that the alternative solutions, possibly less restrictive of freedom of establishment, proposed by the Commission in the context of the procedure for failure to fulfil obligations, fully attain the objectives of the national measure at issue ( ) or do so in a way that is, at least, as effective. ( ) If that were not so, the degree of protection which the defendant Member State seeks to achieve would be nullified.

107. In this case, the line of argument put forward by the Commission appears not to take account of that approach from several points of view.

108. It should be borne in mind, first of all, that the transitional provisions in Book V in no way prevent a psychotherapist, established in Germany before 31 December 1998, who provided care under the statutory sickness insurance schemes of other Member States from continuing to practise his profession in Germany, either in the place in which he initially chose to establish his practice, but outside the statutory sickness insurance scheme, or in another place in Germany which is not subject to the quota system introduced from 1 January 1999 and within the German statutory sickness insurance scheme.

109. Also, contrary to what the Commission implies in the alternative, it is not irrelevant to a consideration of the proportionality of the transitional provisions in Book V that their field of application is limited to the same place in respect of which a psychotherapist has applied for authorisation to provide care under the German statutory sickness insurance scheme, independently of the actual need for care, from 1 January 1999, namely the place in which his practice is located.

110. Having regard to the objectives which the transitional provisions in Book V seek to attain, psychotherapists who, although established in a place where the actual need for care had been reached or exceeded and where, consequently, the quota system introduced on 1 January 1999 should have led them to transfer their practice or cease to provide care under the German statutory sickness insurance scheme, were to be permitted to continue to practise their profession within that scheme, so as to preserve their established rights.

111. However, as the Federal Republic of Germany pointed out, those rights can be established, and therefore be worthy of protection, only if, during the reference period, the persons concerned had provided psychotherapeutic care in the same place as that in which they were seeking authorisation to continue to provide care under the German statutory sickness insurance scheme from 1 January 1999. That, in fact, was the interpretation of the transitional provisions in Book V, in the light of the objectives which the German legislature sought to achieve, which the Bundessozialgericht confirmed in the abovementioned judgment of 8 November 2000.

112. Under those circumstances, psychotherapeutic care provided during the reference period in a place, whether in Germany or in other Member States, other than the place in respect of which authorisation was sought to provide care under the German statutory sickness insurance scheme from 1 January 1999, independently of the actual need for care, would appear to be irrelevant.

113. It is for that reason, in particular, that the solution adopted in the judgment in Case C-212/99 Commission v Italy, in which the Court held that by not guaranteeing recognition of the rights acquired by former foreign-language assistants who have become linguistic associates, even though such recognition is guaranteed to all national workers, the defendant Member State had failed to fulfil its obligations under Article 48 of the Treaty (now, after amendment, Article 39 EC), ( ) cannot be applied to this case.

114. In my opinion, the assessment made in point 112 above is not weakened by the fact, put forward by the Commission in certain of its written pleadings, that some admissions boards, before the abovementioned judgment of the Bundessozialgericht, had accepted applications from psychotherapists who had not provided care during the reference period in the place for which they were seeking authorisation to continue to practise their profession after 1 January 1999 within the German statutory sickness insurance scheme, notwithstanding the introduction of the quota system in the place where they practised.

115. Regardless of whether the Commission’s allegations are correct, such an argument amounts to requiring the Federal Republic of Germany to extend to Community nationals individual decisions which it regards as unlawful, having regard to the objective which the German legislature sought to achieve, confirmed by the abovementioned judgment of the Bundessozialgericht, which forms part, ex tunc, of the transitional provisions in Book V.

116. Moreover, as the Federal Republic of Germany rightly points out, to accept the Commission’s argument would amount to accepting that the latter could substitute for the objectives fixed by the national legislature its own, broader, objective of preserving the established rights acquired during the reference period by psychotherapists in places other than those in which they may benefit from an exception to the quota system introduced on 1 January 1999, that is to say the places where they have their practices in Germany.

117. Having regard, in particular, to the powers granted to the Commission in the context of the procedure provided for in Article 226 EC, such a substitution was certainly not envisaged.

118. Finally, even if it is accepted, as the Commission proposes, that the application of the transitional provisions in Book V to psychotherapists who provided care under the statutory sickness insurance schemes of other Member States during the reference period would be relevant and would constitute an alternative which would be less restrictive of freedom of establishment, it would appear inadequate to fully attain, or attain as effectively, the objective of those provisions.

119. The consequence of such an alternative measure would be to increase the number of psychotherapists admitted to practise within the statutory sickness insurance scheme in the place where they have their practices, by way of exception to the quota system introduced from 1 January 1999. That measure would indirectly call into question the quota system introduced from 1 January 1999, even though this action is not concerned with the incompatibility of that system with the freedom of establishment.

120. It may certainly be ‘presumed’, as the Commission suggests, that the application of the transitional provisions in Book V to psychotherapists who provided care under the statutory sickness insurance schemes of other Member States ‘would not endanger’ the objectives pursued by those provisions.

121. However, independently of whether, in this context, a mere presumption is sufficient to establish, as the Commission is required to do under Article 226 EC, ( ) that there has been a real infringement of Community law, endangering the objectives pursued by the German legislature, does not, to my mind, constitute a relevant criterion for determining if the alternative measures proposed by the Commission are adequate to achieve those objectives.

122. That does not appear to be the criterion applied by the Court, which verified, even in a reference for a preliminary ruling, whether the application to nationals of other Member States exercising their right of free movement of a procedural right accorded to certain of its citizens in the legislation of a Member State would undermine the aim pursued by that legislation. ( )

123. In an action for failure to fulfil obligations, I consider that, in the light of the case-law referred to in point 106 above, the alternative measures proposed by the Commission must be an equally effective means of attaining the objectives of general interest pursued by the national legislation which is alleged to be incompatible with Community law.

124. I would certainly agree with the Commission that to accept its argument concerning the application to Community nationals of the transitional provisions in Book V providing for an exception to the quota system introduced on 1 January 1999 would have a limited effect on that system.

125. However, that circumstance flows from the fact that the infringement in question is in the past, which, as I proposed in my principal argument, should lead to the action being declared inadmissible.

126. I would add that, although the Commission conducted the pre-litigation procedure while the transitional provisions in Book V were still in force, it is probable that the application of those provisions to Community nationals who had provided care under the statutory sickness insurance schemes of other Member States during the reference period would, as the German Government contends, have led to the quota system being more thoroughly or more noticeably altered. It is worth pointing out that, although the alleged infringement had already come to an end, reference was made in the pre-litigation procedure and the parties’ written pleadings to other cases of psychotherapists who had provided care under the statutory sickness insurance schemes of other Member States to whom the transitional provisions in Book V might have been applied.

127. In addition, it should be pointed out that the Commission admitted in its application that providing a level of psychotherapeutic care which corresponded to actual need could be successful, in the foreseeable future, only if the number of potential applicants for favourable treatment under the transitional provisions in Book V was identifiable. ( ) However, the Commission did not explain how that condition concerning the identification of the number of potential applicants could be fulfilled with equal effectiveness by the adoption of a measure which would have required the Federal Republic of Germany to take account of equivalent or comparable professional activities carried on by Community citizens who were established in Germany, or who wished to establish themselves there, before 31 December 1998 and had provided care during the reference period under the statutory sickness insurance schemes of other Member States.

128. Having regard to the objectives pursued by the German legislature when it adopted the transitional provisions in Book V, I consider that the Commission has not shown that there is an alternative measure less restrictive of freedom of establishment which could achieve those objectives in an equally effective manner.

129. Under those circumstances, I consider that, even if the action is declared admissible, the Commission has not established that the Federal Republic of Germany, by adopting the transitional provisions in Book V, has failed to fulfil its obligations under Article 43 EC.

130. Consequently, in the alternative, I propose that the action should be dismissed as unfounded.

VI – Costs

131. Under Article 69(2) 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. However, under the third subparagraph of Article 69(5) of the Rules of Procedure, if costs are not claimed, the parties are to bear their own costs. Although in my view, the Commission should be unsuccessful, since the Federal Republic of Germany has not applied for costs, I suggest that the Court should order each party to bear its own costs.

VII – Conclusion

132. In the light of the foregoing considerations, I propose that the Court should decide as follows:

(1) Dismiss the application as inadmissible.

(2) Order each party to bear its own costs.