17.

In view of the butter surplus existing in the Community and of the limited possibilities of exporting it, the Commission, by a decision of 17 December 1968 pursuant to Article 6 (3) of Regulation No 804/68 of the Council, authorized the Federal Republic of Germany to sell at reduced prices butter held in store by the intervention agencies. In order to ensure that the consignments of butter sold at less than the normal price were not diverted from their intended use a system of supervision was of course necessary and the Federal Republic — as appears from a recital in the preamble to that decision — stated that it could guarantee the efficacy of such supervision. However, in the course of 1971 the German authorities informed the Commission that following developments in the situation on the butter market they were no longer in a position to ensure, at every stage of marketing, that the butter would not be diverted from its lawful destination. At the same time certain of the quantities of butter sold at reduced prices in 1970 by the German intervention agencies were still held by the initial purchasers, who appeared to be disposed to allow the contracts of sale to be rescinded and thus to return the goods, on condition that the price paid by them, plus a specified amount to compensate them for expenses incurred, was reimbursed to them. That led the Commission to adopt the decision of 19 August 1971 which authorized the Federal Republic of Germany to agree with the aforesaid purchasers to rescind the contracts of sale concluded by the German intervention agency prior to 1 January 1971. That authorization was intended to prevent quantities of butter which were still held by the initial purchasers from subsequently forming the subject of fraudulent practices or other irregularities to the detriment of the functioning of the Community system. The said decision stated that the sums intended to compensate purchasers should not exceed set limits. More particularly, Article 1 (2) (b) of the decision fixed the maximum amount of the compensation on the basis of the quantity of the goods and the length of time for which they had been stored by the purchaser. The German agency thus undertook to repurchase the available consignments. However, the German authorities granted, under contract, repayments calculated on the basis of prices in excess of that at which the intervention agency had sold the butter. Furthermore, amounts were also paid corresponding to the interest lost by purchasers by virtue of the storage of the goods. Faced with that situation the Commission held that it could charge to the EAGGF only that expenditure which conformed to the criteria laid down by Regulation No 2306/70 of the Council of 10 November 1970 (on the financing of intervention expenditure in respect of the domestic market in milk and milk products). Under Article 4 (1) (f) of that regulation the account relating to intervention on the domestic market in butter is to be debited with “the storage costs, apart from the financing costs, calculated on the basis of a fixed amount per metric ton/ period of storage, this fixed amount to be determined in accordance with Article 18 (1)”. Article 4 (1) (h) provides that the processing costs incurred by the intervention agency as a result of particular measures taken to sell butter held in public storage which cannot be marketed on normal terms during a milk year should be charged to the abovementioned account. The aforesaid decision of the Commission of 19 August 1971 evaluated the storage costs borne by purchasers of butter at reduced prices on the basis of the costs which would have been incurred by the intervention agencies if they themselves had continued to hold in store the butter sold. The amounts laid down by the said decision in fact correspond more or less exactly, according to the Commission, to the fixed amounts laid down by the said Article 4 (1) (f) of Regulation No 2306/70. As regards the costs relating to the processing of the butter into concentrated butter the fixed amount thereof for the period in question was determined for the whole of the Community by the Commission by decision of 30 November 1973, adopted in accordance with the management committee procedure laid down by Regulation No 2306/70 (Article 4 (1) (h)). Only that amount, therefore, could be paid in connexion with the repurchase of the butter, leaving out of consideration the particular circumstances of those transactions; additional amounts arising from the processing of concentrated butter into melted butter by purchasers could not be charged to the EAGGF. Therefore the Commission is of the view that its refusal, addressed to the Federal Republic of Germany, to charge to the EAGGF, in respect of the transactions described above, expenditure in excess of the fixed amount for the storage and processing costs determined by the aforementioned provisions of Article 4 (1) (f) and (h) of Regulation No 2306/70 is fully justified by Community law. The applicant objects that the expenditure incurred, although greater than that fixed by the decision of 19 August 1971, was incurred in the interests of the Community and was necessary to achieve the objective in question. Nevertheless, that fact is not sufficient for the expenditure to be charged to the Community; it is contradicted by the exhaustive nature of the list of items to be debited contained in Article 4 of Regulation No 2306/70. In order to escape application of the general rule the applicant suggests that the situation in which its intervention agency found itself should be treated in the same way as an instance of management without mandate in a case of urgency and necessity. It argues that successful tenderers still in possession of the butter, who had the opportunity to engage in a speculative transaction consisting in the resale on the market of the butter purchased at a low price, could not reasonably be expected to be satisfied with reimbursement of the purchase price and mere indemnification in respect of storage costs. According to the German Government the maximum repurchase price fixed by the Commission in its decision of 19 August 1971 was economically inapplicable; the German Government therefore argues that its unilateral action served to protect the interests of the Community. It appears to me that it is for the Community and not for the individual Member States to assess the Community's interest in the implementation of repurchasing transactions authorized and financed by it. On the basis of that discretionary assessment it is always for the Community to determine the terms of such transactions. Nor should it be forgotten that the Federal Government had declared, when it was authorized to sell butter at reduced prices, that it could guarantee that the sale would be conducted properly and that it had entered into a precise obligation in that respect. It should therefore have taken all measures necessary to eliminate the risk of the speculative transactions on the part of private individuals which were to be feared, without imposing on the Commission an additional financial burden. In other words, the German authorities, having given that assurance, were deemed to be capable of assuming responsibility for any irregularities resulting from defects in the system of supervision applied by it in accordance with the general rules examined at the beginning of my opinion. It is true that notwithstanding that fact the Commission subsequently declared that it was willing to contribute to the costs of repurchase, but only within fixed financial limits. If, therefore, the Federal Government held that it was necessary to incur greater expenditure in order to bring the transaction to a successful conclusion, the basic responsibility which that Government had assumed is of itself sufficient to justify the refusal of the Commission to charge to the Community that additional and unauthorized expenditure. Nor, in my view, does Article 8 (2) of Regulation No 729/70 have any effect on the solution to this case (even if the interpretation of that provision advocated by the applicant is accepted) in so far as it concerns expenditure in excess of that authorized. As regards the alleged instance of management without mandate in a case of necessity it can certainly not be simply transposed from civil law to the sphere of relations between the Community and a Member State. In any event, that doctrine does not permit the Member States to substitute themselves for the Community, with the result of placing a burden on the Community budget in a sector in which the Community had clearly laid down the limits within which it was willing to bear the financial burden of a transaction which the German State, at its own request, had been authorized to undertake. As the Community is not guilty of a failure to act the doctrine of management without mandate is in any event inapplicable. The action of the German authorities should rather be regarded as action extra legem, arising from the desire to give the repurchasing operation a wider scope than would have been possible within the limits of the terms fixed by the Commission. Finally, it should be observed that no urgent reasons have been shown to exist such as to prevent the Federal authorities from demonstrating to the Community that there existed a need for a greater contribution from the Community towards the financing of the operation. For that reason it is not possible to uphold the applicant's request in this regard.