Judgment of the Court (Second Chamber) of 15 December 1983. - Metallurgiki Halyps AE v Commission of the European Communities. - Production quotas for rolled products. - Joined cases 31/82, 138/82 and 204/82.



European Court reports 1983 Page 04193



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . ECSC - PRODUCTION - PRODUCTION QUOTAS FOR STEEL - SPECIAL PROBLEMS OF THE GREEK STEEL INDUSTRY - TAKEN INTO CONSIDERATION BY THE COMMUNITY AUTHORITIES - CONDITIONS AND LIMITS

( ECSC TREATY , ART . 58 )

2 . ECSC - PRODUCTION - PRODUCTION QUOTAS FOR STEEL - OBJECTIVE AND SCOPE

( ECSC TREATY , ART . 58 )

3 . ECSC - PRODUCTION - PRODUCTION QUOTAS FOR STEEL - DIFFERENTIATION OF PRODUCTION RESTRICTIONS ACCORDING TO THE DIFFERENT CATEGORIES OF PRODUCTS - PERMISSIBILITY

( ECSC TREATY , ART . 5 , FIRST PARA .)

4 . ECSC - PRODUCTION - PRODUCTION QUOTAS FOR STEEL - DECISION 1831/81 - RELIEF CLAUSE IN FAVOUR OF GREEK UNDERTAKINGS - BASIS - POLITICAL DISCRETION OF THE COMMISSION - NO DUTY TO GUARANTEE A MINIMUM RATE OF UTILIZATION OF CAPACITY FOR ALL GREEK UNDERTAKINGS

( ECSC TREATY , ART . 58 ; GREEK ACT OF ACCESSION ; DECISION 1831/81 , ART . 14A )

Summary

1 . WHILST CONSIDERATIONS OF ECONOMIC POLICY BASED ON DIFFERENCES IN STRUCTURE , LEVEL OF DEVELOPMENT AND RATE OF UTILIZATION OF PRODUCTION CAPACITY EXISTING BETWEEN GREEK STEEL UNDERTAKINGS AND THOSE IN THE REST OF THE COMMUNITY MAY BE TAKEN INTO ACCOUNT BY THE POLITICAL AUTHORITIES OF THE COMMUNITY IN THE EXERCISE OF THE POWERS CONFERRED UPON THEM BY ARTICLE 58 OF THE ECSC TREATY , WITH A VIEW TO RESOLVING CERTAIN SPECIAL PROBLEMS IN THE GREEK STEEL INDUSTRY , SUCH CONSIDERATIONS DO NOT PERMIT THE LEGAL VALIDITY OF PROVISIONS ADOPTED BY THE COMMISSION WITH REGARD TO AN INDIVIDUAL GREEK UNDERTAKING , PURSUANT TO THE GENERAL DECISIONS IN FORCE , TO BE CALLED IN QUESTION .

2.THE PURPOSE OF THE INTRODUCTION OF THE SYSTEM OF STEEL PRODUCTION QUOTAS IS NOT TO RESOLVE PROBLEMS WHICH MAY RESULT FROM DIFFERENCES IN THE STRUCTURE OR DEVELOPMENT OF UNDERTAKINGS , BUT TO SPREAD IN AN EQUITABLE MANNER AMONG ALL UNDERTAKINGS IN THE COMMUNITY THE INEVITABLE SACRIFICES ENTAILED BY THE STEEL CRISIS , REGARDLESS OF THEIR GEOGRAPHICAL LOCATION AND INDIVIDUAL STATE OF DEVELOPMENT .

3.THE DIFFERENCES IN THE RESTRICTIONS ON PRODUCTION , ACCORDING TO THE DIFFERENT CATEGORIES ESTABLISHED BY THE SUCCESSIVE GENERAL DECISIONS IMPOSING QUOTA SYSTEMS , ARE JUSTIFIED BY THE FACT THAT THE CRISIS DOES NOT AFFECT THE VARIOUS TYPES OF PRODUCTION TO THE SAME EXTENT . IN VIEW OF THE PRINCIPLE OF ECONOMY OF ACTION LAID DOWN IN THE FIRST PARAGRAPH OF ARTICLE 5 OF THE ECSC TREATY , THE COMMISSION IS ENTITLED TO ADJUST ITS MEASURES OF INTERVENTION , IN RELATION TO THE DIFFERENT CATEGORIES OF PRODUCTS , TO WHAT APPEARS TO BE ESSENTIAL IN ORDER TO RESTORE THE BALANCE BETWEEN PRODUCTION AND DEMAND .

THE FACT THAT A STEEL UNDERTAKING IS SUBJECT TO RELATIVELY MORE SEVERE RE STRICTIONS BECAUSE IT HAS CONCENTRATED ITS ACTIVITIES ON PRODUCTS PARTICULARLY AFFECTED BY THE CRISIS , IN COMPARISON WITH UNDERTAKINGS WHOSE PRODUCTION IS MORE VARIED OR BIASED TOWARDS PRODUCTS WHICH ARE NOT AS SERIOUSLY AFFECTED , CANNOT BE REGARDED AS DISCRIMINATION ON THE PART OF THE COMMUNITY .

4.NOTHING IN THE SCHEME OF ARTICLE 58 OR THE GREEK ACT OF ACCESSION REQUIRES THE COMMISSION TO ADOPT , UNDER THE SYSTEM OF STEEL PRODUCTION QUOTAS ESTABLISHED BY DECISION 1831/81 , A GENERAL PROVISION IN FAVOUR OF GREEK UNDERTAKINGS SUCH AS TO GUARANTEE THEM A RATE OF UTILIZATION OF THEIR PRODUCTION CAPACITY EQUAL TO THE AVERAGE RATE OF UTILIZATION OF THE OTHER STEEL UNDERTAKINGS IN THE COMMUNITY . THE INTRODUCTION AND ADJUSTMENT OF THE SPECIAL RELIEF CLAUSE IN FAVOUR OF GREEK UNDERTAKINGS , CONTAINED IN ARTICLE 14A OF DECISION 1831/81 , FALLS WITHIN THE LAWFUL EXERCISE OF THE COMMISSION ' S DISCRETION ON MATTERS OF POLICY .

Parties

IN JOINED CASES 31 , 138 AND 204/82

METALLURGIKI HALYPS AE , A COMPANY INCORPORATED UNDER THE LAWS OF GREECE , HAVING ITS REGISTERED OFFICE IN ATHENS , REPRESENTED BY JOANNIS E . STAMOULIS , ALEKSANDROS LYKOUREZOS AND CHRISTOS D . ARVANITIS OF THE ATHENS BAR , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ERNEST ARENDT , 34 B RUE PHILIPPE-II ,

APPLICANT ,

V

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY FRANK S . BENYON , GEORGES D . KREMLIS AND XENOPHON YATAGANAS , MEMBERS OF ITS LEGAL DEPARTMENT , ACTING AS AGENTS , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , A MEMBER OF ITS LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

Subject of the case

APPLICATIONS REQUESTING THE COURT TO DECLARE VOID THE DECISIONS BY WHICH THE COMMISSION FIXED THE APPLICANT ' S REFERENCE PRODUCTION AND REFERENCE QUANTITIES , TOGETHER WITH ITS PRODUCTION QUOTAS AND THE PART OF SUCH QUOTAS THAT MIGHT BE DELIVERED WITHIN THE COMMON MARKET , AS REGARDS ROLLED PRODUCTS IN CATEGORY V ( CONCRETE REINFORCING BARS ) FOR THE FOURTH QUARTER OF 1981 AND THE FIRST QUARTER OF 1982 ( CASE 31/82 ) AND FOR THE SECOND QUARTER OF 1982 ( CASE 138/82 ) AND AS REGARDS PRODUCTS IN CATEGORIES IV ( WIRE ROD ) AND V FOR THE THIRD QUARTER OF 1982 ( CASE 204/82 ),

Grounds

1 BY THREE APPLICATIONS LODGED AT THE COURT REGISTRY ON 18 JANUARY , 30 APRIL AND 11 AUGUST 1982 , METALLURGIKI HALYPS AE , A COMPANY INCORPORATED UNDER THE LAWS OF GREECE , WITH ITS REGISTERED OFFICE IN ATHENS , BROUGHT ACTIONS TO HAVE DECLARED VOID THE INDIVIDUAL DECISIONS BY WHICH THE COMMISSION FIXED THE APPLICANT ' S REFERENCE PRODUCTION , REFERENCE QUANTITIES , PRODUCTION QUOTAS AND THE PART OF THOSE QUOTAS WHICH COULD BE DELIVERED WITHIN THE COMMON MARKET AS REGARDS , RESPECTIVELY , ROLLED PRODUCTS IN CATEGORY V ( CONCRETE REINFORCING BARS ) FOR THE FOURTH QUARTER OF 1981 AND THE FIRST QUARTER OF 1982 ( CASE 31/82 ) AND FOR THE QUARTER OF 1982 ( CASE 138/82 ) AND AS REGARDS PRODUCTS IN CATEGORIES IV ( WIRE ROD ) AND V FOR THE THIRD QUARTER OF 1982 ( CASE 204/82 ). THE GENERAL DECISIONS ON WHICH THOSE INDIVIDUAL DECISIONS WERE BASED WERE COMMISSION DECISION 1831/81/ECSC OF 24 JUNE 1981 ( OFFICIAL JOURNAL 1981 , L 180 , P . 1 ), AS AMENDED IN PARTICULAR BY COMMISSION DECISION 2804/81/ECSC OF 23 SEPTEMBER 1981 ( OFFICIAL JOURNAL 1981 , L 278 , P . 1 ) AND , IN RELATION TO THE LAST APPLICATION , COMMISSION DECISION 1696/82/ECSC OF 30 JUNE 1982 ( OFFICIAL JOURNAL 1982 , L 191 , P . 1 ).

2 IN SUPPORT OF ITS APPLICATIONS , THE APPLICANT PLEADED A SERIES OF SUBMISSIONS ALLEGING FAILURE TO OBSERVE THE TRANSITIONAL PROVISIONS OF THE ACT OF ACCESSION , CONTRAVENTION OF ARTICLE 58 AND OF THE PRINCIPLES OF THE ECSC TREATY , MANIFEST MISUSE OF POWER , INADEQUATE STATEMENT OF REASONS AND INFRINGEMENT OF ARTICLE 14A OF DECISION 1831/81 , AS AMENDED BY DECISION 2804/81 .

3 FOLLOWING THE JUDGMENT OF 9 DECEMBER 1982 IN CASE 258/81 (( 1982 ) ECR 4261 ) BETWEEN THE SAME PARTIES , THE APPLICANT RETAINED ONLY TWO SUBMISSIONS : ( A ) ONE OF THE ARGUMENTS SET OUT AS PART OF THE SUBMISSION RELATING TO THE CONTRAVENTION OF ARTICLE 58 AND OF THE PRINCIPLES OF THE ECSC TREATY AND ( B ) INFRINGEMENT OF ARTICLE 14A OF DECISION 1831/81 .

CONTRAVENTION OF ARTICLE 58 AND OF THE PRINCIPLES OF THE ECSC TREATY

4 THE APPLICANT PURSUES TWO LINES OF ARGUMENT ON THIS POINT . FIRST , IT CLAIMS THAT THE EXTENSION TO GREEK STEEL UNDERTAKINGS OF THE GENERAL DECISIONS OF THE COMMISSION ESTABLISHING A PRODUCTION-QUOTA SYSTEM HAS A DISCRIMINATORY EFFECT BECAUSE OF THE DIFFERENCES IN STRUCTURE , LEVEL OF DEVELOPMENT AND RATE OF UTILIZATION OF PRODUCTION CAPACITY EXISTING BETWEEN GREEK UNDERTAKINGS AND THOSE IN THE REST OF THE COMMUNITY .

5 SECONDLY , IT ARGUES THAT THE APPLICATION OF THE COMMISSION ' S GENERAL DECISIONS HAS A MORE SPECIFIC DISCRIMINATORY EFFECT IN RELATION TO IT , OWING TO THE FACT THAT ITS PRODUCTION IS CONCENTRATED ON THE TWO CATEGORIES OF STEEL PRODUCTS - WIRE ROD IN CATEGORY IV AND CONCRETE REINFORCING BARS IN CATEGORY V - FOR WHICH THE RESTRICTIONS ON PRODUCTION ARE MOST STRINGENT . ON THE OTHER HAND , FOR UNDERTAKINGS WITH A WIDER RANGE OF PRODUCTION , THE AVERAGE RESTRICTION OF PRODUCTION IS LESS SIGNIFICANT , IN VIEW OF THE FACT THAT CERTAIN PRODUCTS ARE WHOLLY EXEMPT FROM THE QUOTA SYSTEM AND OTHERS ARE SUBJECT TO LOWER RESTRICTIONS .

6 IN RELATION TO THE FIRST PART OF THAT SUBMISSION , REFERENCE SHOULD BE MADE TO THE ABOVE-MENTIONED JUDGMENT OF 9 DECEMBER 1982 AND TO THE JUDGMENT OF 16 FEBRUARY 1982 IN JOINED CASES 39 , 43 , 85 AND 88/81 ( HALYVOURGIKI V COMMISSION , ( 1982 ) ECR 593 ), IN WHICH THE COURT STATED THE LEGAL JUSTIFICATION FOR THE EXTENSION TO GREEK UNDERTAKINGS OF ALL THE PROVISIONS ADOPTED BY THE COMMISSION UNDER ARTICLE 58 OF THE ECSC TREATY SINCE THE ENTRY INTO FORCE OF THE ACT OF ACCESSION .

7 WITHOUT REPEATING THE STATEMENTS CONTAINED IN THOSE JUDGMENTS , THE COURT TAKES THE VIEW THAT , IN THE LIGHT OF THE ARGUMENTS SET OUT BY THE APPLICANT IN THIS CASE , IT MUST DRAW ATTENTION MORE PARTICULARLY TO THE FOLLOWING POINTS .

8 WHILST CONSIDERATIONS OF ECONOMIC POLICY SUCH AS THOSE REFERRED TO BY THE APPLICANT MAY BE TAKEN INTO ACCOUNT BY THE POLITICAL AUTHORITIES OF THE COMMUNITY IN THE EXERCISE OF THE POWERS CONFERRED UPON THEM BY ARTICLE 58 OF THE TREATY , WITH A VIEW TO RESOLVING CERTAIN SPECIAL PROBLEMS IN THE GREEK STEEL INDUSTRY , SUCH CONSIDERATIONS DO NOT PERMIT THE LEGAL VALIDITY OF THE PROVISIONS ADOPTED BY THE COMMISSION WITH REGARD TO THE APPLICANT , PURSUANT TO THE GENERAL DECISIONS IN FORCE , TO BE CALLED IN QUESTION .

9 ARTICLE 14A , WHICH THE COMMISSION INSERTED INTO DECISION 1831/81 , RECOGNIZED THAT SPECIAL DIFFICULTIES MAY ARISE FOR UNDERTAKINGS WHOSE PLANT IS SITUATED IN GREECE . HOWEVER , IT SHOULD BE STRESSED THAT THAT PROVISION CAN APPLY ONLY TO INDIVIDUAL UNDERTAKINGS BY VIRTUE OF THEIR PARTICULAR SITUATION .

10 THE APPLICANT ' S STATEMENT THAT THE APPLICATION OF THE QUOTA SYSTEM TO GREEK UNDERTAKINGS HAS THE EFFECT OF DISCRIMINATING AGAINST THEM IN RELATION TO STEEL UNDERTAKINGS IN THE REST OF THE COMMUNITY ARISES OUT OF A FAILURE ON ITS PART TO APPRECIATE THE TRUE IMPLICATIONS OF THE MEASURES ADOPTED UNDER ARTICLE 58 .

11 AS THE COURT HAS REPEATEDLY STRESSED , THE PURPOSE OF THE INTRODUCTION OF THE PRODUCTION-QUOTA SYSTEM IS TO SPREAD IN AN EQUITABLE MANNER AMONG ALL UNDERTAKINGS IN THE COMMUNITY THE INEVITABLE SACRIFICES ENTAILED BY THE STEEL CRISIS , WHICH IS CHARACTERIZED BY A REDUCTION IN DEMAND AND A FALL IN THE LEVEL OF PRICES . THE CONSEQUENCES OF THAT CRISIS AFFECT ALL UNDERTAKINGS , WHATEVER THEIR GEOGRAPHICAL LOCATION AND THEIR INDIVIDUAL STATE OF DEVELOPMENT . THE PROBLEMS REFERRED TO BY THE APPLICANT IN CONNECTION WITH STRUCTURE , LEVEL OF DEVELOPMENT AND RATE OF UTILIZATION OF PRODUCTION CAPACITY ARE NOT PECULIAR TO IT OR TO GREEK UNDERTAKINGS BUT ALSO ARISE FOR MANY OTHER UNDERTAKINGS THROUGHOUT THE COMMUNITY .

12 MOREOVER , THE AIM OF DECISIONS ADOPTED UNDER ARTICLE 58 IS NOT , AS THE APPLICANT APPEARS TO CONTEND , TO RESOLVE PROBLEMS WHICH MAY RESULT FROM DIFFERENCES IN THE STRUCTURE OR DEVELOPMENT OF UNDERTAKINGS , BUT TO SHARE IN AN EQUITABLE MANNER THE SACRIFICES NECESSITATED BY THE ATTEMPT TO OVERCOME THE CRISIS IN THE STEEL INDUSTRY , REGARDLESS , MOREOVER , OF THE INDIVIDUAL SITUATION OF UNDERTAKINGS . THEREFORE , THE FACT THAT THE COMMISSION APPLIED TO THE APPLICANT RULES ADOPTED IN ORDER TO RESOLVE A PROBLEM WHICH AFFECTS STEEL UNDERTAKINGS OF ALL THE MEMBER STATES EQUALLY , REGARDLESS OF THEIR GEOGRAPHICAL LOCATION , CANNOT BE REGARDED AS DISCRIMINATION .

13 IT FOLLOWS FROM THE FOREGOING THAT THE FIRST PART OF THE SUBMISSION MUST BE DISMISSED .

14 AS TO THE SECOND PART OF THE SUBMISSION , IT SHOULD BE NOTED , AS THE COMMISSION RIGHTLY EXPLAINED , THAT THE DIFFERENCES IN THE RESTRICTIONS ON PRODUCTION , ACCORDING TO THE DIFFERENT CATEGORIES ESTABLISHED BY THE SUCCESSIVE GENERAL DECISIONS , ARE JUSTIFIED BY THE FACT THAT THE CRISIS DOES NOT AFFECT THE VARIOUS TYPES OF PRODUCTION TO THE SAME EXTENT . IN VIEW OF THE PRINCIPLE OF ECONOMY OF ACTION LAID DOWN IN THE FIRST PARAGRAPH OF ARTICLE 5 OF THE ECSC TREATY , WHICH PROVIDES THAT ' ' THE COMMUNITY SHALL CARRY OUT ITS TASK IN ACCORDANCE WITH THIS TREATY , WITH A LIMITED MEASURE OF INTERVENTION ' ' , THE COMMISSION WAS ENTITLED TO ADJUST ITS INTERVENTION MEASURES , IN RELATION TO THE DIFFERENT CATEGORIES OF PRODUCTS , TO WHAT APPEARED TO BE ESSENTIAL IN ORDER TO RESTORE THE BALANCE BETWEEN PRODUCTION AND DEMAND .

15 THE FACT THAT THE APPLICANT IS SUBJECT TO RELATIVELY MORE SEVERE RESTRICTIONS BECAUSE IT HAS CONCENTRATED ITS ACTIVITIES ON PRODUCTS PARTICULARLY AFFECTED BY THE CRISIS , IN COMPARISON WITH UNDERTAKINGS WHOSE PRODUCTION IS MORE VARIED OR BIASED TOWARDS PRODUCTS WHICH ARE NOT AS SERIOUSLY AFFECTED , CANNOT BE REGARDED AS DISCRIMINATION ON THE PART OF THE COMMUNITY .

16 THE SECOND PART OF THE SUBMISSION MUST THEREFORE ALSO BE DISMISSED .

INFRINGEMENT OF ARTICLE 14A OF DECISION 1831/81

17 THE MEANING OF THE APPLICANT ' S SUBMISSION BASED ON THE INFRINGEMENT OF ARTICLE 14A OF DECISION 1831/81 IS NOT CLEAR . IT IS APPARENT FROM THE CONTESTED DECISIONS THAT THE APPLICANT DID IN FACT ENJOY THE BENEFITS RESERVED BY THAT PROVISION TO GREEK UNDERTAKINGS . IT DOES NOT COMPLAIN THAT ARTICLE 14A WAS NOT CORRECTLY APPLIED TO IT BUT CRITICIZES THE FACT THAT THE COMMISSION DID NOT ATTRIBUTE TO IT A WIDER MEANING , SO AS TO GUARANTEE TO ALL GREEK UNDERTAKINGS A RATE OF UTILIZATION OF THEIR PRODUCTION CAPACITY EQUAL TO THE AVERAGE RATE OF UTILIZATION OF THE OTHER STEEL UNDERTAKINGS IN THE COMMUNITY . IT CLAIMS THAT THAT RATE WAS 63% AT THE MATERIAL TIME , WHILST THE CONTESTED DECISIONS PERMITTED THE APPLICANT A MAXIMUM RATE OF UTILIZATION OF ITS PRODUCTION CAPACITY OF ONLY 54% .

18 THE ANSWER TO THAT ARGUMENT MUST BE THAT NOTHING IN THE SCHEME OF ARTICLE 58 OR THE ACT OF ACCESSION REQUIRES THE COMMISSION TO ADOPT A GENERAL PROVISION IN FAVOUR OF GREEK UNDERTAKINGS SUCH AS THAT DESIRED BY THE APPLICANT . THE INTRODUCTION AND ADJUSTMENT OF THE SPECIAL RELIEF CLAUSE IN FAVOUR OF GREEK UNDERTAKINGS FALLS WITHIN THE COMMISSION ' S DISCRETION ON MATTERS OF POLICY AND THE APPLICANT HAS NOT PUT FORWARD ANY GROUNDS TO WARRANT THE VIEW THAT THE COMMISSION EXERCISED THAT DISCRETION ILLEGALLY .

19 AS FOR THE CRITERION ADVOCATED BY THE APPLICANT , NAMELY THE GURANTEE OF A MINIMUM RATE OF UTILIZATION OF PRODUCTION CAPACITY , IT SHOULD BE NOTED THAT THE COURT HAS REPEATEDLY HELD THAT RECOURSE TO SUCH A CRITERION WOULD NOT PERMIT THE ATTAINMENT OF THE OBJECTIVE LAID DOWN IN ARTICLE 58 OF THE TREATY ( SEE MOST RECENTLY THE JUDGMENT OF 11 . 5 . 1983 IN CASE 244/81 , KLOCKNER V COMMISSION ( 1983 ) ECR 1451 ).

20 FINALLY , ATTENTION MAY BE DRAWN TO THE THEORETICAL NATURE OF THIS DISCUSSION , SINCE IT IS CLEAR FROM THE INFORMATION PROVIDED BY THE COMMISSION THAT , DURING THE PERIOD IN QUESTION , THE APPLICANT DID NOT EVEN SUCCEED IN USING UP THE PRODUCTION QUOTAS ALLOCATED TO IT .

21 THIS SUBMISSION MUST THEREFORE ALSO BE DISMISSED .

22 IT FOLLOWS FROM THE FOREGOING THAT THE APPLICATION MUST BE DISMISSED IN ITS ENTIRETY .

Decision on costs

COSTS

23 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE , THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS .

24 AS THE APPLICANT HAS FAILED IN ITS SUBMISSIONS , IT MUST BE ORDERED TO PAY THE COSTS .

Operative part

ON THOSE GROUNDS ,

THE COURT ( SECOND CHAMBER )

HEREBY :

1 . DISMISSES THE APPLICATION ;

2 . ORDERS THE APPLICANT TO PAY THE COSTS .