1.

As you are aware the applicant's chief complaint is that the Commission wrongfully failed to adopt a decision under Article 88 of the ECSC Treaty and to record that by granting special credits to the French iron and steel industry the French Government had violated the prohibition on subsidies set out in Article 4(c) of that Treaty. The essential difference between the parties therefore concerns this prohibition and the manner in which it must be defined. (a) As regards the concept of the subsidy, your case-law is of assistance (let us recall the definition of this term given by Case 30/59 (Rec. 1961, p. 39): ‘a benefit in money or in kind which is granted for the support of an undertaking, other than consideration given by the purchaser or the consumer for the goods which it produces or the services which it performs’. Moreover, there is no question that this definition covers the grant of credits at reduced rates of interest. Thus, the central point of the discussion is whether Article 4(c) simply prohibits any subsidizing of the coal and steel industry; or whether it only refers to those benefits which are specially or at least principally conferred on that industry. As you are aware, the Commission supports the second alternative, while for its part, the applicant stresses that the ‘special nature’ criterion is not relevant to the application of Article 4(c) and that, on the contrary, it is only necessary to determine whether the object of the preferential measure adopted is to subsidize the coal and steel industry through the grant of direct aids, whether it is intended to affect the conditions of competition existing in this industry and whether it directly affects the undertakings concerned. it is true tnat, in favour or its view, the applicant may put forward an argument based on the fact that the text of Article 4(c) refers to ‘special’ charges, but not to special subsidies and that, in other words, it only lays down the special nature criterion in relation to the charges imposed by the States. However, the importance of this conclusion should not be exaggerated as it has long been established that as regards the ECSC Treaty (as, moreover, as regards all the Community documents), such textual arguments must be considered cautiously (this was pointed out by Steindorff ( 2 ) in particular in relation to the problems which concern us here). It is therefore necessary to widen the basis of examination of this question and to attempt, by means of a systematic interpretation, to unearth the decisive factors therefrom. To do this, it is necessary to consider Article 67 of the said Treaty which also refers to measures adopted by States which have appreciable repercussions on conditions of competition in the coal and steel industries but which is less radical than the prohibition in Article 4 in that it provides, in this regard, for the special measure constituted by the adoption of recommendations. Let me observe, first, that an argument can also be put forward on the basis of the text of Article 67, one, however, which runs counter to the applicant's view, in that paragraph (3) of that article refers in the same phrase to special charges and special benefits. The Commission rightly concludes therefrom that these terms complement each other and it seeks to extend this idea to the interpretation of Article 4(c). However, much more important than these textual comparisons is the question of the problem raised by the deliberate distinction between, first, the prohibition in Article 4(c) and secondly, the provisions of Article 67. You are aware that this problem is one which the interpreters of the ECSC Treaty were quick to seek to solve. In order to resolve it properly it must first be observed that the ECSC Treaty has only brought about partial integration and that the Member States have largely reserved their sovereign rights. In particular, these States retain responsibility for their general economic policy, as is clearly shown by the very wide terms used in Article 26. When the Member States act in the exercise of the powers they have retainend, which in principle are not affected by the Treaty, then it is at least necessary to provide for the possibility of remedying certain repercussions which such action may have on the areas of activity governed by the ECSC Treaty. It is to this that the provisions of Article 67 refer. As regards in particular the repercussions in the form of the grant of benefits and subsidies of the measures adopted by the Member States and the question of how they must be assessed in the light of either Article 67 or Article 4 of the Treaty, it is true that the specialists in this subject soon formed an almost unanimous opinion which coincides with the Commission's present argument. The Commission is right to refer in this connexion to the ‘Rapport présenté au nom du Conseil économique’ (‘Report submitted on behalf of the Economic Council’) which states: ‘Il ne pourrait y avoir aide au sens de l'article 4, que si les conditions d'intérêt ou de remboursement présentaient un caractere discriminatoire, c'est-à-dire si elles étaient différentes des conditions pratiquées dans des situations comparables pour des industries comparables. Il en serait ainsi si les charbonnages ou la siderurgie obtenaient des prêts à des taux d'intérêt sensiblement plus bas que ceux offerts à d'autres industries lourdes telles que la Société nationale des Chemins de fer français par exemple’. (‘There could be no aid within the meaning of Article 4 unless the rates of interest or terms of repayment were discriminatory in nature, that is, unless they were different from those which applied in comparable situations in comparable industries. This would be the case if the coal or steel industries obtained loans at considerably lower rates of interest than those offered to other heavy industries, such as, for example, the Société nationale des Chemins de fer Français’.) Reuter ( 3 ) expresses the same view when he considers that the general measures, that is, the benefits which derive from the general legislation, must be considered in the light of Article 67 of the Treaty, whereas Article 4(c) only applies to special subsidies which concern the coal and steel industry alone. This is also the opinion of Steindorff ( 4 ) Jerusalem ( 5 ) Hochbaum ( 6 ) and Kopensteiner ( 7 ). As I therefore considered the question to have been settled to this effect, I unhesitatingly based my opinion in Joined Cases 6 and 11/69 ([1969] ECR 550) upon it. No argument has been put forward in the present case to question the accuracy of this distinction. In fact, it appears that as subsidies constitute a popular instrument of economic, social and industrial policy it is unreasonable to withdraw the coal and steel industries entirely entirely from the beneficial action which results for them from the measures taken by the Member States within the context of their general economic legislation and to consider that an unconditional prohibition exists on subsidies to these industries. I believe that the authors of the Treaty cannot have intended to give absolute effect to the prohibition on subsidies in Article 4(c) even as against the general measures adopted by the Member States (in so far as they concern the coal and steel industry) without providing for any means of authorizing such subsidies and giving as the only solution to such an unsatisfactory situation the application of either Article 37 or the first paragraph of Article 95, provisions which involve a cumbersome procedure (unanimous assent of the Council after the Consultative Committee has been consulted) and are linked to the existence of certain conditions which only occur in times of difficulty (fundamental and persistent disturbances in the economy). Finally, let me point out that this system would also damage the harmonious development of the Communities, since the provisions concerning aids in the EEC Treaty also provide for important exceptions to the prohibition on subsidies, and do so taking account of the powers retained by the Member States. Although it is clear that this latter argument is not conclusive, the Commission was right to consider it useful in this connexion. To sum up, therefore, it is clear mat it we are to avoid the existence of a serious lacuna in the Member State's exercise of their powers connected with general economic policy (a point which, in an analysis of Article 67 and the problem of special charges, was also stressed in Case 30/59 (Rec. 1961, pp. 41, 43-4)), it must be accepted that Article 4(c) only applies to the subsidies granted specially to the coal and steel industry and that on the other hand Article 67 is alone relevant in cases where this industry benefits from preferential measures which form part of general arrangements. (b) Having thus clearly established the principles, I must determine whether the aid measures adopted by the French Government may be regarded as a part of a general policy of an economic, industrial, regional and social nature or whether they must be treated as a special subsidy to the iron and steel industry. As you are aware, the applicant maintains that it is, at all events, a special subsidy. It observes that, as regards the investment programme, the French economic plan only constitutes a framework which must be supplemented by more specific measures. In this connexion I have shown that the French State acted selectively. The credits granted on these favourable terms were limited to privileged sectors, according to the applicant. In particular, it maintains that the rate of interest granted to the iron and steel industries is one of the lowest in force. The applicant concludes that the fact that the measures in question are connected with the general economic plan drawn up by the French Republic does not prevent them constituting a special benefit accorded to the iron and steel industry. In the context of this debate two points may be accepted straight away. The first is that, as has been observed by Koppensteiner in particular, (loc. cit., pp. 158, 160), even in the case of general measures which require further definition it is not impossible for the manner of adoption of the implementing measures to satisfy the criterion of special nature and to justify the application of Article 4(c). Secondly, there is no doubt that the French economic plan in question, which was ratified by Law No 65-1001 of 30 November 1965 ( 8 ), could not be applied as it stood but required the adoption of more specific measures in the form of agreements with the various sectors of industry. However, as regards the question whether the applicant's conclusion that we are dealing with special measures in favour of the French iron and steel industry is correct, serious doubts exist. It cannot be denied that French economic policy for the period from 1966 to 1970 was set out mainly in the quinquennial plan in question in this instance. It is this plan which fixed the objectives and the framework of the measures to be adopted. The plan thus forms the basis of the implementing measures, which are closely dependent upon it and also derive their validity from it. It is, therefore, clearly wrong to evaluate these measures by considering them in isolation, since they may be assumed to be the expression of a coherent policy, of the government which participates in the same way in each special agreement. In other words, the plan constitutes an essential context which justifies regarding all the specific implementing measure as interdependent. Considered from this angle, I can only acknowledge that the Agreement concluded with the iron and steel industry is intended to contribute to the implementation of a wider project, that of supervising the balanced development of the economy and of promoting industrial and regional policy (the latter being strongly influenced by social considerations). It is basically these general aims which determine the adoption of the particular agreement in question here and it is difficult to see how it can be said that the iron and steel industry is referred to as such and that the French Government has sought to give it special support on the basis of its needs. Moreover, the necessary general analysis also shows that the iron and steel industry did not alone benefit from the special credit terms. A table which has been produced by the Commission shows that there are other areas of economic activity which greatly benefited from special credits on the implementation of the Vth Plan. In particular, we learn that three other sectors have benefited from rates of interest which are as low (or even lower) than those granted to the iron and steel industry, that the duration of the loans granted to the latter is comparable to that which has been adopted in four other sectors and that there are three sectors other than iron and steel which have also benefited from a clause postponing the payment of interest or deferring repayment of the loan. Moreover, it must be noted that in analysing all the measures which have been taken and in determining whether there have been any discriminatory departures from the general policy (in other words, special measures), it is also necessary to take account of the continuity between the successive plans and the benefits accorded during the earlier years within the context of them. Finally, it is important to take into consideration the particular situation in which the iron and steel industry, with its special difficulties as regards the aim of modernization and economic and social development, found itself, and in particular to consider the social burdens which were imposed on it by the Plan. Far from being open to confusion with the theory of compensation which the Court rejected in Case 30/59, this method only assists in correctly clarifying the question whether, in the main, the various sectors of the national economy have been put in an equal material position and whether it is, therefore, impossible for one of them to have benefited from special treatment. If we take all these factors into account, it appears that both on the basis of the objective repercussions of the measures of aid examined and the purpose for which they were adopted it can be maintained that the special agreement concluded with the iron and steel industry partakes of the general nature of the measures taken within the context of the Vth Plan and cannot be regarded as amounting to the grant of a special benefit. The Commission thus rightly declined to apply Article 4(c) and the Netherlands Government is wrong to request it to take a decision under Article 88 in order to record that the French Government had infringed the provisions of the said Article 4(c).