Judgment of the Court of 15 October 1985. - Krupp Stahl AG and Thyssen Stahl AG v Commission of the European Communities. - Steel industry: allocation of additional quotas. - Joined cases 211 and 212/83, 77 and 78/84.



European Court reports 1985 Page 03409



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

ECSC - PRODUCTION - STEEL PRODUCTION QUOTA SYSTEM - ALLOCATION OF ADDITIONAL QUOTAS - CONDITIONS - REDUCTIONS IN PRODUCTION CAPACITY EFFECTED AFTER THE REFERENCE DATE IN ACCORDANCE WITH A RESTRUCTURING PLAN OR AS REQUIRED BY THE COMMISSION IN ITS DECISIONS CONCERNING AID TO THE STEEL INDUSTRY - REFERENCE CRITERIA - ARBITRARY OR DISCRIMINATORY NATURE - NONE

( ECSC TREATY , ART . 58 ; DECISION NO 2177/83 , ART . 14 B , AND DECISION NO 234/84 , ART . 14 B )

Summary

BY PROVIDING THAT THE COMMISSION MAY ALLOCATE , WITHIN THE FRAMEWORK OF THE SYSTEM OF STEEL PRODUCTION QUOTAS , ADDITIONAL QUOTAS TO AN UNDERTAKING IF THAT UNDERTAKING HAS , SINCE 1 JANUARY 1980 , EFFECTED THE REDUCTION IN ITS PRODUCTION CAPACITY PROVIDED FOR IN ITS RESTRUCTURING PLAN OR REQUIRED BY THE COMMISSION IN ITS DECISIONS CONCERNING AID TO THE STEEL INDUSTRY , ARTICLE 14 B OF DECISION NO 2177/83 , AS AMENDED BY DECISION NO 3280/83 , AND ARTICLE 14 B OF DECISION NO 234/84 DO NOT LAY DOWN ARBITRARY OR DISCRIMINATORY CRITERIA .

IN THE FIRST PLACE , THE CHOICE OF THE REFERENCE DATE IS NEITHER ARBITRARY NOR DISCRIMINATORY . IT FORMS PART OF A SET OF RULES COMPRISING SEVERAL ELEMENTS , RELATING IN PARTICULAR TO THE LIMITATION OF PRODUCTION AND THE REDUCTION OF PRODUCTION CAPACITY IN THE STEEL SECTOR , AND IT IS IN HARMONY WITH THE OTHER ELEMENTS OF THOSE RULES , WHICH THEMSELVES FORM PART OF THE STEEL POLICY GRADUALLY DEVELOPED BY THE COMMISSION AND THE COUNCIL . THE FACT THAT THE COMMISSION MADE IT POSSIBLE TO INCREASE THE REFERENCE PRODUCTION FIGURES IN ORDER TO TAKE ACCOUNT OF RESTRUCTURING EFFORTS COMPLETED BEFORE 1980 AND THE FACT THAT IT PROVIDED FOR THE ALLOCATION OF ADDITIONAL QUOTAS IN ORDER TO COMPENSATE FOR CAPACITY REDUCTIONS EFFECTED SINCE THE BEGINNING OF 1980 CLEARLY INDICATE THAT THE COMMISSION DID NOT SEEK TO FAVOUR CERTAIN UNDERTAKINGS OR CATEGORIES OF UNDERTAKING ; THAT VIEW IS , MOREOVER , CONFIRMED BY THE MANNER IN WHICH THE SYSTEM HAS BEEN APPLIED .

IN THE SECOND PLACE , WITH REGARD TO THE REQUIREMENT OF A RESTRUCTURING PLAN , IT MUST BE ACKNOWLEDGED THAT THE COMMISSION IS QUITE CORRECT , IN VIEW OF THE SERIOUSNESS OF THE CRISIS IN THE STEEL INDUSTRY AND OF THE MEASURES NEEDED TO OVERCOME IT , TO REGULATE THE PROCESS OF RESTRUCTURING BY A SERIES OF MEASURES OF WHICH THE QUOTA SYSTEM FORMS PART . CONSEQUENTLY , IT IS NOT ARBITRARY TO REQUIRE THAT THE CAPACITY REDUCTIONS CONFERRING THE RIGHT TO THE ALLOCATION OF ADDITIONAL QUOTAS SHOULD FORM A COHERENT WHOLE AND BE IN CONFORMITY WITH THE REQUIREMENTS LAID DOWN BY THE COMMISSION IN ITS DECISIONS CONCERNING AID TO THE STEEL INDUSTRY OR WITH A RESTRUCTURING PLAN WHICH WAS ADOPTED BY THE UNDERTAKING BUT WHICH IS COMPATIBLE WITH THE GENERAL RESTRUCTURING OBJECTIVES LAID DOWN BY THE COMMUNITY INSTITUTIONS .

FINALLY , THERE ARE NO GROUNDS FOR OBJECTING TO THE INCLUSION IN THE SYSTEM OF PRODUCTION QUOTAS OF CRITERIA WHICH FORM PART OF THE SYSTEM OF AID TO THE STEEL INDUSTRY , SINCE THE OBJECTIVE OF BOTH SYSTEMS , DESPITE THE DIFFERENCES IN THEIR LEGAL BASIS AND THE CRITERIA FOR THEIR APPLICATION , IS RESTRUCTURING . IT IS THEREFORE NEITHER ARBITRARY NOR DISCRIMINATORY IF FACTORS RESULTING FROM THE APPLICATION OF ONE OF THE SYSTEMS ARE USED AS A POINT OF REFERENCE IN THE OTHER .

Parties

IN JOINED CASES 211 AND 212/83 , 77 AND 78/84

( 1 ) KRUPP STAHL AG , WHOSE REGISTERED OFFICE IS AT BOCHUM , REPRESENTED BY K . PFEIFFER , K . H . BIEDENKOPF AND P . OSSENBACH , RECHTSANWALTE , COLOGNE , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF J.-C . WOLTER ,

APPLICANT IN CASES 211/83 AND 78/84 ,

( 2)THYSSEN STAHL AG , WHOSE REGISTERED OFFICE IS AT DUISBURG , REPRESENTED BY DERINGER , TESSIN , HERRMANN AND SEDEMUND , RECHTSANWALTE , COLOGNE , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF J . LOESCH ,

APPLICANT IN CASES 212/83 AND 77/84 ,

BOTH SUPPORTED BY :

FEDERAL REPUBLIC OF GERMANY , REPRESENTED BY M . SEIDEL , MINISTERIALRAT ( PRINCIPAL ) AT THE FEDERAL MINISTRY OF THE ECONOMY , BONN , ACTING AS AGENT , ASSISTED BY PROFESSOR M . ZULEEG , OF THE UNIVERSITY OF FRANKFURT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE GERMAN EMBASSY ,

INTERVENER IN CASES 211 AND 212/83 , 77 AND 78/84 ,

V

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY ITS LEGAL ADVISER , R . WAGENBAUR , ASSISTED BY PROFESSOR E . GRABITZ , OF THE UNIVERSITY OF BERLIN , WITH AN ADDRESS FOR SERVICE AT THE OFFICE OF G . KREMLIS , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

Subject of the case

APPLICATIONS FOR THE PARTIAL ANNULMENT OF ARTICLE 14B OF GENERAL COMMISSION DECISION NO 2177/83/ECSC OF 28 JULY 1983 AND ARTICLE 14B OF GENERAL COMMISSION DECISION NO 234/84/ECSC OF 31 JANUARY 1984 , EACH OF WHICH EXTENDS THE SYSTEM OF PRODUCTION QUOTAS FOR CERTAIN PRODUCTS OF UNDERTAKINGS IN THE STEEL INDUSTRY ( OFFICIAL JOURNAL 1983 , L 208 , P . 1 , AND 1984 , L 29 , P . 1 ),

Grounds

1 BY APPLICATIONS LODGED AT THE COURT REGISTRY ON 20 SEPTEMBER 1983 ( CASE 211/83 ) AND 21 MARCH 1984 ( CASE 78/84 ) KRUPP STAHL AG , BOCHUM , BROUGHT TWO ACTIONS UNDER THE SECOND PARAGRAPH OF ARTICLE 33 OF THE ECSC TREATY FOR THE PARTIAL ANNULMENT OF ARTICLE 14B OF GENERAL COMMISSION DECISION NO 2177/83 OF 28 JULY 1983 ON THE EXTENSION OF THE SYSTEM OF MONITORING PRODUCTION QUOTAS FOR CERTAIN PRODUCTS OF UNDERTAKINGS IN THE STEEL INDUSTRY ( OFFICIAL JOURNAL 1983 , L 208 , P . 1 ), AS AMENDED BY GENERAL COMMISSION DECISION NO 3280/83 OF 8 NOVEMBER 1983 ( OFFICIAL JOURNAL 1983 , L 322 , P . 35 ), AND OF ARTICLE 14B OF GENERAL COMMISSION DECISION NO 234/84 OF 31 JANUARY 1984 ON THE EXTENSION OF THE SYSTEM OF MONITORING AND PRODUCTION QUOTAS FOR CERTAIN PRODUCTS OF UNDERTAKINGS IN THE STEEL INDUSTRY ( OFFICIAL JOURNAL 1984 , NO L 29 , P . 1 ).

2 BY APPLICATIONS LODGED AT THE COURT REGISTRY ON 20 SEPTEMBER 1983 ( CASE 212/84 ) AND 21 MARCH 1984 ( CASE 77/84 ) THYSSEN STAHL AG , DUISBURG , BROUGHT TWO ACTIONS UNDER THE FIRST AND SECOND PARAGRAPHS OF ARTICLE 33 OF THE ECSC TREATY FOR THE PARTIAL ANNULMENT OF ARTICLE 14B OF DECISION NO 2177/83 , AS AMENDED BY DECISION NO 3280/83 , AND ARTICLE 14B OF DECISION NO 234/84 .

3 BY ORDER OF 28 NOVEMBER 1984 THE COURT DECIDED TO JOIN THE FOUR CASES FOR THE PURPOSES OF THE ORAL PROCEDURE AND JUDGMENT BECAUSE THEY WERE CONNECTED . THE FEDERAL REPUBLIC OF GERMANY WAS ALLOWED TO INTERVENE IN ALL FOUR CASES IN SUPPORT OF THE APPLICANTS ' CONCLUSIONS .

A - THE SUBJECT-MATTER OF THE ACTIONS

4 THE SYSTEM OF PRODUCTION QUOTAS FOR STEEL PRODUCERS WAS ESTABLISHED IN 1980 , ON THE BASIS OF ARTICLE 58 OF THE ECSC TREATY , BY COMMISSION DECISION NO 2794/80 OF 31 OCTOBER 1980 ESTABLISHING A SYSTEM OF STEEL PRODUCTION QUOTAS FOR UNDERTAKINGS IN THE IRON AND STEEL INDUSTRY ( OFFICIAL JOURNAL 1980 , L 291 , P . 1 ). THAT SYSTEM WAS EXTENDED ON VARIOUS OCCASIONS , INTER ALIA , BY DECISIONS NOS 2177/83 AND 234/84 , WHICH ARE THE SUBJECT OF THESE ACTIONS . BOTH DECISIONS CONTAIN A PROVISION CONCERNING THE ALLOCATION OF ADDITIONAL QUOTAS TO UNDERTAKINGS WHICH HAVE CARRIED OUT A SUBSTANTIAL PROGRAMME FOR THE REDUCTION OF THEIR PRODUCTION CAPACITY SINCE 1 JANUARY 1980 .

5 ARTICLE 14 B OF DECISION NO 2177/83 AND ARTICLE 14B OF DECISION NO 234/84 DEAL WITH THE ALLOCATION OF ADDITIONAL QUOTAS . THE FORMER PROVISION , AS AMENDED BY DECISION NO 3280/83 , PROVIDES THAT THE COMMISSION :

' MAY ALLOCATE ADDITIONAL QUOTAS TO UNDERTAKINGS WHERE , UNDER A RESTRUCTURING PLAN SUBMITTED TO THE COMMISSION , THEY HAVE CARRIED OUT SINCE 1 JANUARY 1980 AT LEAST THREE-QUARTERS OF THE CAPACITY CLOSURES PROVIDED FOR IN THE UNDERTAKING ' S RESTRUCTURING PLAN AND THOSE DEMANDED , WHERE REQUIRED , BY THE COMMISSION IN ITS DECISIONS OF 29 JUNE 1983 CONCERNING AIDS TO THE STEEL INDUSTRY . '

IN ESSENCE ARTICLE 14 B OF DECISION NO 234/84 IS THE SAME AS THAT PROVISION EXCEPT THAT HENCEFORTH THE UNDERTAKING CONCERNED MUST , IN ORDER TO BE ELIGIBLE FOR THE ALLOCATION OF ADDITIONAL QUOTAS UNDER THAT PROVISION , HAVE CARRIED OUT , SINCE 1 JANUARY 1980 , AT LEAST 85% OF THE TOTAL CAPACITY REDUCTIONS PROVIDED FOR IN ITS RESTRUCTURING PLAN AND OF ANY REDUCTIONS REQUIRED BY THE COMMISSION IN ITS DECISIONS CONCERNING AID TO THE STEEL INDUSTRY .

6 THE DECISIONS OF 29 JUNE 1983 TO WHICH ARTICLE 14 B OF DECISION NO 2177/83 REFERS ARE THE NINE DECISIONS ADDRESSED TO THE BELGIAN , FRENCH , GERMAN , GREEK , IRISH , ITALIAN , LUXEMBOURG , NETHERLANDS AND UNITED KINGDOM GOVERNMENTS AUTHORIZING THE GRANT OF AID TOTALLING 21.9 THOUSAND MILLION ECU IN THE MEMBER STATES CONCERNED ( OFFICIAL JOURNAL 1983 , L 227 , P . 1 ET SEQ .). THE DECISIONS AT ISSUE WERE ADOPTED UNDER GENERAL COMMISSION DECISION NO 2320/81/ECSC OF 7 AUGUST 1981 ESTABLISHING COMMUNITY RULES FOR AIDS TO THE STEEL INDUSTRY ( OFFICIAL JOURNAL 1981 , L 228 , P . 14 ), HEREINAFTER REFERRED TO AS ' THE SECOND AIDS CODE ' .

7 THE APPLICANTS DO NOT DISPUTE THAT ADDITIONAL QUOTAS MAY BE ALLOCATED TO CERTAIN STEEL PRODUCERS IN CONSIDERATION OF THEIR EFFORTS TO REDUCE THEIR PRODUCTION CAPACITY . NEVERTHELESS , THEY CONSIDER THAT THE CONDITIONS TO WHICH THE COMMISSION HAS SUBJECTED THE ALLOCATION OF THOSE ADDITIONAL QUOTAS WERE FIXED SO AS TO FAVOUR UNDERTAKINGS WHICH DELAYED THEIR RESTRUCTURING AND SO AS TO PREJUDICE PRODUCERS SUCH AS KRUPP AND THYSSEN WHO ADOPTED RESTRUCTURING MEASURES AS SOON AS THE CRISIS IN THE STEEL INDUSTRY AROSE IN 1974 .

8 THYSSEN SEEKS THE ANNULMENT OF THE TWO PROVISIONS AT ISSUE IN SO FAR AS THEY SUBJECT THE ALLOCATION OF ADDITIONAL QUOTAS TO CONDITIONS WHICH DO NOT ALLOW FOR REDUCTIONS IN PRODUCTION CAPACITY EFFECTED BEFORE 1980 . KRUPP SEEKS THEIR ANNULMENT IN SO FAR AS THEIR EFFECT IS TO RESERVE THE ALLOCATION OF ADDITIONAL QUOTAS TO UNDERTAKINGS WHICH HAVE CARRIED OUT SINCE 1 JANUARY 1980 A GIVEN PERCENTAGE ( 75% AND 85% , RESPECTIVELY ) OF THE REDUCTIONS IN PRODUCTION CAPACITY LAID DOWN IN A RESTRUCTURING PLAN AND IN SO FAR AS THEY SUBJECT THE ALLOCATION OF THOSE QUOTAS TO THE REQUIREMENT THAT THE UNDERTAKINGS HAVE CARRIED OUT A GIVEN PERCENTAGE OF THE CAPACITY REDUCTIONS REQUIRED BY THE COMMISSION IN ITS DECISIONS CONCERNING AID TO THE STEEL INDUSTRY .

9 BOTH APPLICANTS RELY ON THE SECOND PARAGRAPH OF ARTICLE 33 OF THE ECSC TREATY , WHICH ENABLES UNDERTAKINGS TO INSTITUTE PROCEEDINGS AGAINST GENERAL DECISIONS WHICH THEY CONSIDER INVOLVE A MISUSE OF POWERS AFFECTING THEM . IN THIS CASE THE MISUSE OF POWERS ARISES , ACCORDING TO THE APPLICANTS AND THE INTERVENER , FROM THE ARBITRARY AND DISCRIMINATORY NATURE OF THREE ELEMENTS OF THE CONTESTED PROVISIONS , NAMELY :

THE REFERENCE TO 1 JANUARY 1980 ;

THE REFERENCE TO A RESTRUCTURING PLAN ;

THE REFERENCE TO THE DECISIONS CONCERNING AID TO THE STEEL INDUSTRY .

THE PURPOSE OR EFFECT OF THOSE THREE ELEMENTS IS , THEY CONTEND , TO FAVOUR THOSE UNDERTAKINGS WHICH WERE ABLE TO DELAY THE REDUCTION OF THEIR PRODUCTION CAPACITY BECAUSE THEY RECEIVED PUBLIC SUBSIDIES OF QUESTIONABLE LEGALITY .

10 THYSSEN ALSO BASES ITS APPLICATIONS ON THE FIRST AND SECOND PARAGRAPHS OF ARTICLE 33 AND ARGUES THAT THE DECISIONS AT ISSUE CONSTITUTE INDIVIDUAL DECISIONS CONCERNING IT , SINCE THE REFERENCE DATE CHOSEN PERMITTED THE IDENTIFICATION OF A GIVEN NUMBER OF UNDERTAKINGS , KNOWN TO THE COMMISSION , WHICH WOULD BE RECIPIENTS OF ADDITIONAL QUOTAS . THYSSEN CLAIMS THAT IT MAY THEREFORE RELY ON GROUNDS OTHER THAN MISUSE OF POWERS ; THUS IT MAINTAINS THAT INSUFFICIENT REASONS WERE GIVEN FOR THE DECISIONS AND THAT THEY WERE UNLAWFUL BECAUSE THEY INFRINGED ESSENTIAL PROCEDURAL REQUIREMENTS .

11 THE COMMISSION CONTENDS THAT THE APPLICATIONS ARE INADMISSIBLE IN SO FAR AS THEY ARE BASED ON BREACH OF ESSENTIAL PROCEDURAL REQUIREMENTS , SINCE THE DECISIONS IN QUESTION ARE GENERAL DECISIONS AND DO NOT CONSTITUTE INDIVIDUAL DECISIONS CONCERNING THYSSEN ; FOR THE REST IT CONSIDERS THEM UNFOUNDED . IN ADDITION , THE COMMISSION OBSERVES THAT A PARTIAL ANNULMENT OF THE TWO PROVISIONS , AS SOUGHT BY THE APPLICANTS , WOULD IN FACT AMOUNT TO A TOTAL ANNULMENT THEREOF , SINCE IT IS DIFFICULT OR EVEN IMPOSSIBLE TO DETERMINE WHICH PARTS WOULD REMAIN AFTER A PARTIAL ANNULMENT .

B - THE REFERENCE DATE

12 THE APPLICANTS AND THE GERMAN GOVERNMENT MAINTAIN FIRST OF ALL THAT THE CHOICE OF 1 JANUARY 1980 AS THE REFERENCE DATE IS ARBITRARY SINCE THE NEED FOR RADICAL RESTRUCTURING OF THE STEEL SECTOR BECAME APPARENT LONG BEFORE THAT DATE . AS EARLY AS 1977 THE COMMISSION ITSELF ANNOUNCED INITIATIVES FOR THE ELIMINATION OF THE SURPLUS PRODUCTION CAPACITY EXISTING WITHIN THE COMMUNITY . THE SYSTEM OF ADDITIONAL QUOTAS COULD THEREFORE ONLY HAVE CONTRIBUTED EFFECTIVELY TO THE EFFORTS TO ALLEVIATE THE CRISIS IF THE REFERENCE DATE HAD BEEN FIXED AT 1 JANUARY 1978 . THIS WOULD HAVE HAD THE EFFECT OF MAKING THE ALLOCATION OF ADDITIONAL QUOTAS A JUST RECOMPENSE FOR THOSE UNDERTAKINGS WHICH , IN ACCORDANCE WITH THE OBJECTIVES LAID DOWN BY THE COMMISSION , RESPONDED TO THE STEEL CRISIS IN GOOD TIME AND REDUCED THEIR PRODUCTION CAPACITY AS SOON AS THE NEED TO DO SO BECAME APPARENT .

13 THE APPLICANTS AND THE GERMAN GOVERNMENT CONTEND SECONDLY THAT THE CHOICE OF 1 JANUARY 1980 IS DISCRIMINATORY . THEY STATE THAT BEFORE 1980 THE APPLICANTS ENDEAVOURED TO REDUCE THEIR SURPLUS CAPACITY BY THEIR OWN MEANS WHEREAS OTHER STEEL PRODUCERS , ESPECIALLY THOSE ESTABLISHED IN BELGIUM , FRANCE , ITALY AND THE UNITED KINGDOM , MAINTAINED UNPROFITABLE OR EVEN OBSOLETE PLANT , OFTEN WITH THE HELP OF PUBLIC SUBSIDIES . AS A RESULT OF THE CHOICE OF REFERENCE DATE , THE CONTESTED PROVISIONS MAKE IT IMPOSSIBLE FOR RESTRUCTURING MEASURES EFFECTED BEFORE 1 JANUARY 1980 TO BE TAKEN INTO ACCOUNT ; THEIR EFFECT , THEREFORE , IS TO BENEFIT UNDERTAKINGS WHICH DELAYED THEIR CAPACITY REDUCTIONS AT THE EXPENSE OF UNDERTAKINGS WHICH CONTRIBUTED IN GOOD TIME TO THE RESOLUTION OF THE STEEL CRISIS .

14 THE COMMISSION CONSIDERS THAT THE APPLICANTS AND THE GERMAN GOVERNMENT HAVE GRASPED NEITHER THE FUNCTION OF THE CONTESTED PROVISIONS WITHIN THE FRAMEWORK OF THE RESTRUCTURING POLICY NOR THE SCOPE OF THE CRITERIA GOVERNING THE IMPLEMENTATION OF THE SYSTEM OF ADDITIONAL QUOTAS . IT OBSERVES THAT THE RESTRUCTURING MEASURES CARRIED OUT BEFORE 1980 HAD ALREADY BEEN TAKEN INTO ACCOUNT AT THE TIME OF THE ESTABLISHMENT OF THE PRODUCTION QUOTA SYSTEM IN 1980 BY GENERAL DECISION NO 2794/80 ; ARTICLE 4 OF THAT DECISION CONTAINS , IN PARAGRAPHS ( 4 ) AND ( 5 ), SPECIFIC PROVISIONS RELATING TO THE ADJUSTMENT OF THE REFERENCE PRODUCTION FIGURES IN THE LIGHT OF RESTRUCTURING MEASURES ALREADY CARRIED OUT . SINCE PRODUCTION QUOTAS WERE CALCULATED ON THE BASIS OF THE REFERENCE PRODUCTION FIGURES OF EACH UNDERTAKING BY THE APPLICATION TO THOSE FIGURES OF ABATEMENT RATES , THE BENEFIT OF AN INCREASE IN THE REFERENCE PRODUCTION FIGURES WAS PASSED ON IN THE CALCULATION OF PRODUCTION QUOTAS UNDER SUBSEQUENT DECISIONS WHICH EXTENDED THE QUOTA SYSTEM , SUCH AS THE DECISIONS AT ISSUE . CONSEQUENTLY , IT WAS NECESSARY TO SELECT 1 JANUARY 1980 AS THE REFERENCE DATE IN ORDER TO PREVENT CLOSURES CARRIED OUT BEFORE 1980 FROM BEING RECOMPENSED A SECOND TIME BY AN INCREASE IN THE QUOTA AND TO PREVENT THE CREATION OF INEQUALITIES IN THAT MANNER .

15 THE COMMISSION ADDS THAT A FURTHER REASON FOR CHOOSING 1 JANUARY 1980 WAS THAT IN 1980 THE QUOTA SYSTEM WAS ESTABLISHED AND THE FIRST AIDS CODE INTRODUCED , AND THAT , IN THAT CONTEXT , THE ' GENERAL OBJECTIVES FOR STEEL ' WERE LAID DOWN FOR THE PERIOD FROM 1980 TO 1985 . IT WAS STATED IN THOSE OBJECTIVES THAT THE SURPLUS CAPACITY IN HOT-ROLLED PRODUCTS IN THE COMMUNITY WOULD , IN THE ABSENCE OF RADICAL RESTRUCTURING MEASURES , AMOUNT TO APPROXIMATELY 47.9 MILLION TONNES IN 1985 ON THE BASIS OF PRODUCTION CAPACITY IN 1980 . IN SUCH CIRCUMSTANCES THE COMMISSION CONSIDERED ITSELF OBLIGED IN 1983 TO PROVIDE FURTHER INDUCEMENT FOR RAPID RESTRUCTURING . SINCE THAT WAS TO OCCUR WITHIN THE FRAMEWORK OF THE OBJECTIVES FOR 1980 TO 1985 THE CHOICE OF 1 JANUARY 1980 AS THE REFERENCE DATE WAS COMPLETELY LOGICAL .

16 THE COURT CONSIDERS FIRST OF ALL THAT IT IS CLEAR FROM THE EXPLANATIONS GIVEN BY THE COMMISSION THAT THE CHOICE OF THE REFERENCE DATE FOR THE ALLOCATION OF ADDITIONAL QUOTAS WAS NOT ARBITRARY ; IT FORMS PART OF A SET OF RULES COMPRISING SEVERAL ELEMENTS , RELATING IN PARTICULAR TO THE LIMITATION OF PRODUCTION AND THE REDUCTION OF PRODUCTION CAPACITY IN THE STEEL SECTOR , AND IT IS IN HARMONY WITH THE OTHER ELEMENTS OF THOSE RULES , WHICH THEMSELVES FORM PART OF THE STEEL POLICY GRADUALLY DEVELOPED BY THE COMMISSION AND THE COUNCIL .

17 IT MUST ALSO BE STATED THAT THE COMMISSION ENDEAVOURED TO TAKE ACCOUNT OF RESTRUCTURING CARRIED OUT BEFORE 1980 BY INCORPORATING WITHIN THE QUOTA SYSTEM ESTABLISHED IN 1980 A METHOD OF ADJUSTING THE REFERENCE PRODUCTION FIGURES ; THE QUESTION WHETHER OR NOT THAT METHOD IS ADEQUATE IS NOT AT ISSUE IN THESE PROCEEDINGS . THE FACT THAT THE COMMISSION THEREBY MADE IT POSSIBLE TO INCREASE THE REFERENCE PRODUCTION FIGURES IN ORDER TO TAKE ACCOUNT OF RESTRUCTURING COMPLETED BEFORE 1980 AND THE FACT THAT IT PROVIDED FOR THE ALLOCATION OF ADDITIONAL QUOTAS IN ORDER TO COMPENSATE FOR CAPACITY REDUCTIONS EFFECTED SINCE THE BEGINNING OF 1980 CLEARLY INDICATE THAT THE COMMISSION DID NOT SEEK TO FAVOUR CERTAIN UNDERTAKINGS OR CATEGORIES OF UNDERTAKING . CONSEQUENTLY , THE COURT ' S INVESTIGATION MUST BE LIMITED TO THE QUESTION WHETHER THE SYSTEM ESTABLISHED NEVERTHELESS HAD DISCRIMINATORY EFFECTS .

18 IN THAT CONNECTION IT MUST BE EMPHASIZED INITIALLY THAT THE APPLICANTS HAVE RELIED THROUGHOUT THE PROCEEDINGS ON A COMPARISON BETWEEN , ON THE ONE HAND , UNDERTAKINGS - SUCH AS THE APPLICANTS - WHICH CARRIED OUT THE NECESSARY CLOSURES OF UNPROFITABLE PLANT IN GOOD TIME WITHOUT BENEFITING FROM PUBLIC AID AND , ON THE OTHER , UNDERTAKINGS - IN MEMBER STATES OTHER THAN THE FEDERAL REPUBLIC OF GERMANY - WHICH SURVIVED ONLY BY VIRTUE OF SUBSIDIES WITHOUT SHOWING ANY CONCERN FOR RESTRUCTURING UNTIL THEY WERE COMPELLED TO DO SO BY THE COMMISSION . HOWEVER , SUCH A CLASSIFICATION OF STEEL UNDERTAKINGS DOES NOT CORRESPOND TO THE FACTS : SOME STEEL UNDERTAKINGS IN RECEIPT OF SUBSTANTIAL SUBSIDIES CLOSED SOME OF THEIR PLANT OR FACTORIES VERY QUICKLY , WHILST OTHERS NEITHER RECEIVED ANY AID NOR REDUCED THEIR CAPACITY . IN ADDITION , THE CLASSIFICATION INTO TWO CATEGORIES IS INAPPOSITE SINCE IT OVERLOOKS THE DIFFERENCES BETWEEN INDIVIDUAL UNDERTAKINGS , WHETHER SUBSIDIZED OR NOT , IN PARTICULAR FROM THE POINT OF VIEW OF THE EFFECT OF RESTRUCTURING ON EMPLOYMENT , ON TECHNICAL MODERNIZATION AND ON THE REGIONAL ECONOMY .

19 THAT BEING SO , THE COMPLAINT OF DISCRIMINATORY TREATMENT MIGHT BE JUSTIFIED ONLY IF IT WERE APPARENT FROM THE DOCUMENTS BEFORE THE COURT THAT THERE WAS A CLEAR DIFFERENCE BETWEEN THE QUOTAS ALLOCATED TO THE APPLICANTS AND THOSE ALLOCATED TO OTHER COMPARABLE UNDERTAKINGS WHICH HAD NOT CARRIED OUT RESTRUCTURING BEFORE 1980 AND IF THAT DIFFERENCE WERE CAUSED BY THE OPERATION OF THE CONTESTED PROVISIONS . NEITHER THE WRITTEN NOR THE ORAL EVIDENCE BEFORE THE COURT PERMIT SUCH A CONCLUSION . INSTEAD IT APPEARS THAT IN 1983 AND 1984 ADDITIONAL QUOTAS BASED ON THE PROVISIONS AT ISSUE WERE ALLOCATED TO A BRITISH UNDERTAKING , THE BRITISH STEEL CORPORATION , TO FIVE GERMAN UNDERTAKINGS , NAMELY HOESCH , KRUPP , PEINE-SALZGITTER , KLOCKNER AND MAXHUTTE , AND TO AN ITALIAN UNDERTAKING , ITALSIDER ; THE APPLICANTS ' ALLEGATIONS ARE THEREFORE NOT SUPPORTED BY THE FACTS .

20 IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT THE COMPLAINT THAT THE REFERENCE DATE IS ARBITRARY AND DISCRIMINATORY MUST BE REJECTED .

C - THE RESTRUCTURING PLAN

21 ACCORDING TO THE APPLICANTS AND THE GERMAN GOVERNMENT , IT IS ARBITRARY TO SUBJECT THE ALLOCATION OF ADDITIONAL QUOTAS TO A REQUIREMENT THAT THE CAPACITY REDUCTIONS MUST BE EFFECTED WITHIN THE FRAMEWORK OF A RESTRUCTURING PLAN APPROVED BY THE COMMISSION . IN THEIR VIEW PLANT CLOSURES EFFECTED OUTSIDE SUCH PLANS ALSO CONTRIBUTED TO AN EQUAL EXTENT TO THE INTENDED RADICAL RESTRUCTURING OF THE STEEL INDUSTRY .

22 THEY MAINTAIN FURTHER THAT THE REQUIREMENT THAT UNDERTAKINGS SHOULD POSSESS A RESTRUCTURING PLAN HAS A DISCRIMINATORY EFFECT , SINCE SUCH PLANS WERE DRAWN UP SOLELY IN ORDER TO RECEIVE AID ON THE BASIS OF THE FIRST AND SECOND AIDS CODES . AS IT WAS NOT NECESSARY FOR THE APPLICANTS TO REQUEST SUCH AID UNTIL 1983 , THEY HAD NO RESTRUCTURING PLAN AT THE TIME OF THE ADOPTION OF THE CONTESTED PROVISIONS AND WERE THEREFORE AUTOMATICALLY EXCLUDED FROM THE BENEFIT THEREOF .

23 THE COMMISSION REPLIES THAT THE USE OF THE TERM ' RESTRUCTURING PLAN ' IN THE TWO CONTESTED PROVISIONS DOES NOT IMPLY THAT THE UNDERTAKING IN QUESTION MUST HAVE DRAWN UP A RESTRUCTURING PLAN WITHIN THE MEANING OF THE AIDS CODES . A RESTRUCTURING PLAN WITHIN THE MEANING OF THE CONTESTED PROVISIONS EXISTS WHENEVER AN UNDERTAKING IS IN A POSITION TO PRODUCE DOCUMENTS SHOWING THAT THE NECESSARY REDUCTIONS HAVE BEEN EFFECTED . SUCH A CONCLUSION FOLLOWS CLEARLY FROM ARTICLE 14 B ( 2 ) OF DECISION NO 2177/83 AND ARTICLE 14 B ( 2 ) OF DECISION NO 234/84 , ACCORDING TO WHICH THE UNDERTAKING CONCERNED MUST ATTACH ' SUPPORTING DOCUMENTS ' TO ITS APPLICATION FOR THE ALLOCATION OF ADDITIONAL QUOTAS .

24 IN REPLY TO A QUESTION PUT BY THE COURT REQUESTING AN EXPLANATION OF WHAT WOULD CONSTITUTE A ' RESTRUCTURING PLAN ' IN THE CASE OF AN UNDERTAKING WHICH EFFECTED CAPACITY REDUCTIONS BEFORE 1 JANUARY 1980 AND WHICH HAS NOT RECEIVED ANY AID , THE COMMISSION STATED THAT SUCH AN UNDERTAKING MUST SUBMIT A PLAN SHOWING THAT THE UNDERTAKING IS PREPARED TO CONTRIBUTE TO THE ACHIEVEMENT OF THE GENERAL STEEL OBJECTIVES FOR THE PERIOD FROM 1980 TO 1985 BY NET REDUCTIONS IN ITS PRODUCTION CAPACITY .

25 THE COURT CONSIDERS FIRST OF ALL THAT THE COMMISSION IS QUITE CORRECT , IN VIEW OF THE SERIOUSNESS OF THE CRISIS IN THE STEEL INDUSTRY AND OF THE MEASURES NEEDED TO OVERCOME IT , TO REGULATE THE PROCESS OF RESTRUCTURING BY A SERIES OF MEASURES OF WHICH THE QUOTA SYSTEM FORMS PART . IT IS NOT ARBITRARY TO REQUIRE , WITHIN THAT CONTEXT , THAT THE CAPACITY REDUCTIONS CONFERRING THE RIGHT TO THE ALLOCATION OF ADDITIONAL QUOTAS SHOULD FORM A COHERENT WHOLE AND BE IN CONFORMITY WITH A RE STRUCTURING PLAN DRAWN UP BY THE UNDERTAKING WHICH IS COMPATIBLE WITH THE GENERAL RESTRUCTURING OBJECTIVES LAID DOWN BY THE COMMUNITY INSTITUTIONS .

26 IN ADDITION , IT FOLLOWS FROM THE WORDING OF THE PROVISIONS AT ISSUE THAT THE RESTRUCTURING PLAN REQUIRED FOR THE ALLOCATION OF ADDITIONAL QUOTAS NEED NOT NECESSARILY BE THE SAME AS THAT REFERRED TO IN THE AIDS CODES . THE PROVISIONS IN FACT MAKE IT CLEAR THAT THE CAPACITY REDUCTIONS MUST EITHER BE PROVIDED FOR IN THE UNDERTAKING ' S RESTRUCTURING PLAN OR BE REQUIRED BY THE COMMISSION IN ITS DECISIONS CONCERNING AID TO THE STEEL INDUSTRY .

27 CONSEQUENTLY , IT HAS NOT BEEN ESTABLISHED THAT THE REFERENCE TO A RESTRUCTURING PLAN IS ARBITRARY OR DISCRIMINATORY .

D - THE LINK WITH THE DECISIONS CONCERNING AID

28 IT MUST BE STATED AS A PRELIMINARY POINT THAT THE APPLICANTS HAVE EXPRESSED DOUBTS WITH REGARD TO THE LEGALITY OF THE COMMISSION ' S POLICY ON AID TO THE STEEL INDUSTRY . THEY MAINTAIN THAT BY ITS DECISIONS IN THAT AREA THE COMMISSION HAS INFRINGED ARTICLE 4 OF THE ECSC TREATY AND HAS CREATED UNCERTAINTY WITH REGARD TO THE CAPACITY REDUCTIONS IMPOSED ON INDIVIDUAL UNDERTAKINGS . HOWEVER , THESE PROCEEDINGS DO NOT RELATE TO THE LEGALITY OF THE COMMISSION ' S DECISIONS CONCERNING AID BUT TO THE REFERENCE MADE TO THOSE DECISIONS IN ARTICLE 14 B OF DECISION NO 2177/83 , AS AMENDED BY DECISION NO 3280/83 , AND ARTICLE 14 B OF DECISION NO 234/84 .

29 IN THAT CONNECTION THE APPLICANTS AND THE GERMAN GOVERNMENT CONTEND THAT THE RULES ON AID AND THE QUOTA SYSTEM PURSUE DIFFERENT OBJECTIVES AND THAT THE ALLOCATION OF QUOTAS CANNOT THEREFORE DEPEND ON RECEIPT OF PUBLIC SUBSIDIES . THE COMMISSION IS ABLE TO AUTHORIZE AID ON THE BASIS OF CRITERIA WHICH ARE ENTIRELY DIFFERENT FROM THOSE WHICH MAY BE USED WITHIN THE FRAMEWORK OF THE QUOTA SYSTEM . CONSEQUENTLY , THE INCORPORATION OF THE TERMS OF THE AID DECISIONS IN THE OPERATION OF THE QUOTA SYSTEM CAN ONLY HAVE BEEN INTENDED , THEY CONTEND , TO FAVOUR SUBSIDIZED UNDERTAKINGS .

30 TO ILLUSTRATE THAT POINT , KRUPP POINTS OUT THAT , WHILST THE COMMISSION REJECTED ITS APPLICATION FOR THE ALLOCATION OF ADDITIONAL QUOTAS IN 1983 ON THE GROUND THAT ITS RESTRUCTURING PLAN WAS INADEQUATE , IT OBTAINED THE ALLOCATION IN QUESTION WHEN IT DECIDED TO APPLY FOR THE GRANT OF AID .

31 THE COMMISSION FIRST OF ALL DEFENDS ITS AID POLICY AND THEN STATES THAT NEITHER THE APPLICANTS NOR GERMAN UNDERTAKINGS IN GENERAL SUFFERED DISCRIMINATION AS A RESULT OF THE DISTRIBUTION OF THE BURDEN OF RESTRUCTURING WITHIN THE FRAMEWORK OF THE AID SCHEME .

32 WITH REGARD TO THE CASE REFERRED TO BY KRUPP , THE COMMISSION OBSERVES THAT THE INITIAL APPLICATION FOR THE ALLOCATION OF ADDITIONAL QUOTAS WAS REJECTED BECAUSE THE VOLUME OF THE PROPOSED REDUCTION IN PRODUCTION CAPACITY WAS INSUFFICIENT WHEREAS SUBSEQUENTLY , IN THE CONTEXT OF THE AID RULES , THE COMMISSION WAS ABLE TO REQUIRE A MORE SUBSTANTIAL REDUCTION . IN THE COMMISSION ' S VIEW , THE CASE IN FACT DEMONSTRATES THE RELEVANCE OF THE REFERENCE TO THE DECISIONS CONCERNING AID IN THE PROVISIONS AT ISSUE .

33 THE COMPLAINT OF THE APPLICANTS AND THE GERMAN GOVERNMENT CONCERNS THE INTRODUCTION INTO THE QUOTA SYSTEM OF CRITERIA WHICH FORM PART OF A DIFFERENT SET OF RULES , NAMELY THE RULES ON AID . HOWEVER , THE COURT POINTS OUT THAT AID TO THE STEEL INDUSTRY IS PROVIDED FOR BY THE AIDS CODES ONLY IN SO FAR AS SUCH AID IS ESSENTIAL FOR THE SURVIVAL OF THE INDUSTRY AND IN SO FAR AS ITS PURPOSE IS TO CONTRIBUTE TO THE RESTRUCTURING OF THE INDUSTRY . WITH REGARD TO THE QUOTA SYSTEM , ALTHOUGH IT WAS ESTABLISHED IN 1980 AS A TEMPORARY CRISIS MEASURE , THE EFFECT OF THE INTENSIFICATION OF THAT CRISIS AND DEVELOPMENTS IN THE COMMUNITY STEEL POLICY WAS TO SUBORDINATE THE CONTINUATION OF THAT SYSTEM TO RESTRUCTURING EFFORTS . THAT IS PARTICULARLY TRUE OF THE CONTESTED PROVISIONS , SINCE THEY ARE INTENDED TO ENCOURAGE UNDERTAKINGS TO EFFECT CAPACITY REDUCTIONS .

34 CONSEQUENTLY , DESPITE THE DIFFERENCES IN THEIR LEGAL BASIS AND THE CRITERIA FOR THEIR APPLICATION , THE OBJECTIVE OF BOTH SYSTEMS IS RESTRUCTURING . IT IS THEREFORE NEITHER ARBITRARY NOR DISCRIMINATORY IF FACTORS RESULTING FROM THE APPLICATION OF ONE OF THE SYSTEMS ARE USED AS A POINT OF REFERENCE IN THE OTHER .

35 IT MUST THEREFORE BE CONCLUDED THAT THE FACT THAT THE TWO PROVISIONS AT ISSUE REFER , IN ORDER TO DEFINE THE NECESSARY RESTRUCTURING ENDEAVOURS , TO THE COMMISSION ' S DECISIONS CONCERNING AID TO THE STEEL INDUSTRY DOES NOT CONSTITUTE A MISUSE OF POWERS WITHIN THE MEANING OF ARTICLE 33 OF THE ECSC TREATY .

E - CONCLUSIONS

36 IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT THE COMPLAINT OF A MISUSE OF POWERS MUST BE DISMISSED .

37 IT ALSO FOLLOWS FROM THOSE CONSIDERATIONS THAT THE CHOICE OF 1 JANUARY 1980 AS THE REFERENCE DATE IN THE PROVISIONS AT ISSUE HAS NEITHER THE PURPOSE NOR THE EFFECT OF IDENTIFYING A GIVEN NUMBER OF UNDERTAKINGS , KNOWN TO THE COMMISSION , WHICH WOULD BE RECIPIENTS OF ADDITIONAL QUOTAS . THYSSEN ' S ARGUMENT THAT THE TWO GENERAL DECISIONS AT ISSUE MUST BE REGARDED AS INDIVIDUAL DECISIONS CONCERNING IT CANNOT THEREFORE BE ACCEPTED .

38 CONSEQUENTLY , THE COMPLAINTS BASED ON THE FIRST PARAGRAPH OF ARTICLE 33 OF THE ECSC TREATY , THAT IS TO SAY THOSE CONCERNING THE INFRINGEMENT OF ESSENTIAL PROCEDURAL REQUIREMENTS , CANNOT BE EXAMINED BY THE COURT .

39 FOR ALL THOSE REASONS THE APPLICATIONS MUST BE DISMISSED IN THEIR ENTIRETY .

Decision on costs

COSTS

40 ACCCORDING TO ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE , THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . SINCE THE APPLICANTS HAVE FAILED IN THEIR SUBMISSIONS , THEY MUST BE ORDERED TO PAY THE COSTS . THE INTERVENER MUST BEAR ITS OWN COSTS .

Operative part

ON THOSE GROUNDS ,

THE COURT

HEREBY :

( 1 ) DISMISSES THE APPLICATIONS ;

( 2)ORDERS THE APPLICANTS TO PAY THE COSTS EXCEPT THOSE OF THE INTERVENER , WHICH MUST BE BORNE BY THE LATTER .