OPINION OF MRS ADVOCATE GENERAL ROZÈS

DELIVERED ON 22 JUNE 1983 ( 1 )

Mr President,

Members of the Court,

You have before you an action brought by the Commission of the European Communities for a declaration that the Italian Republic has failed to fulfil its obligations under the EEC Treaty in connection with the Commission decision of 15 September 1980 concerning the partial taking over by the State of employers' contributions to sickness insurance schemes in Italy (Decision 80/932/EEC, Official Journal, L 264 af 8 October 1980, p. 28).

I — The facts are as follows :

Article 22 of Italian Decree Law No 663 of 30 December 1979 made permanent, for some sectors of the Italian economy, a reduction in the level of employers' contributions to the sickness insurance scheme of four percentage points for male employees and of ten percentage points for female employees, with the whole cost of the reduction being borne by the State.

That scheme was ratified by Law No 33 of 29 February 1980.

It constituted the first stage in a reorganization whose purpose was to exempt altogether all undertakings from sickness insurance contributions.

At that stage, however, that reorganization benefited principally industrial undertakings and certain undertakings in the services sector whose exports account for over 40% of their sales.

According to Article 92 (1) of the EEC Treaty,

“Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.”

Consequently, in order for such a system not to be considered an aid incompatible with the common market, it would have to apply to all sectors of the economy.

The Commission has however admitted that the system etablished by Law No 33 of 23 February 1980 constituted only a first stage in the extension of the taking over by the State of employers' contributions to the sickness insurance scheme to the whole of the Italian economy and it is of a sufficiently general nature not to fall within the scope of Article 92 (1) except on one point relating to the greater reduction for female employees. That reduction had the effect of favouring certain sectors which were particularly active in trade between Member States and which employ a largely female workforce and it thereby constituted an aid incompatible with the common market.

II —

Pursuant to the first subparagraph of Article 93 (2) of the EEC Treaty ( 2 ), the Commission adopted Decision 80/932/EEC of 15 September 1980, which was notified to the Italian Government on 17 September and published in the Official Journal of the European Communities on 8 October 1980, and instructed the Italian Government to inform the Commission within six months, before 15 March 1981, of the steps taken to abolish that difference.

Shortly before that decision, on 30 August 1980, Decree Law No 503 had been adopted as a measure of support for the economy. Apart from certain supplementary provisions intended to reinforce the competitiveness of undertakings and to increase employment, that decree not only failed to make any changes in the situation dealt with by the Commission Decision of 15 September 1980, but it extended until 30 June 1981 the validity of the measure which should have been abolished by 15 March 1981.

Between the dates of the adoption of that decision and its publication in the Official Journal on 8 October 1980, the Italian Government advised the Commission that Decree Law No 503 had expired, at the same time informing it that the Italian Parliament might take steps to reintroduce certain of those provisions, without specifying either which provisions or their precise objectives and details.

In fact, Law No 782 of 28 November 1980 introduced a further taking over by the State of employers' sickness insurance contributions of 2.54 percentage points in favour of all southern Italian industry.

The Italian Government was of the view that that information constituted a formal notification pursuant to Article 93 (3) of the EEC Treaty. By letter of 16 December 1980 the Commission informed the Italian Government that it considered that, although the disputed measure had been repealed, the text of Decree Law No 503 was a project for extending or refinancing existing aid systems and setting up new aids, that it had carried out a preliminary study of the measures envisaged and that, on the basis of that study, there was a strong presumption that certain of those measures could not be considered to be compatible with the common market. With regard to measures providing for the State taking over a larger proportion of industry's social security burden, the Commission expressly referred to its Decision of 15 September 1980, asked the Italian Government for more complete information and notified it that it had decided to initiate proceedings' under Article 93 (2).

It should be noted that the purpose of initiating those proceedings was, in particular, to suspend the implementation of the proposed measures pending a final decision.

The Italian Government replied in two stages :

On 31 December 1980, it informed the Commission that it was of the view that, with regard to the measures which had already entered into force, notified to the Commission by letter of 3 December 1980 (a letter which does not appear in the file), the proceedings brought by the Commission were based not on Article 93 (2) but on Article 93 (1);

On 18 February 1981, it supplied the Commission with some details of the supplementary measures in Decree Law No 503. With regard to the taking over by the State of part of the burden of the social security scheme, the subject-matter of the Decision of 15 September 1980, it stated that it had taken note of that decision and that it “intended to comply with it when the provisions governing contributions for ‘medical care’” were amended.

By letter of 12 May 1981 signed by Mr Tugendhat, Member of the Commission, the Commission reiterated to the Italian Government its reservations about the measures in Decree Law No 503 of 30 August 1980.

However because of the assurance given by the Italian Government on 18 February 1981 that it would comply with the decision of 15 September 1980, the Commission, exceptionally, authorized an extension of the deadline set in its original decision for changing the situation to 30 June 1981 (the date set by Decree Law No 503), “on the clear understanding that from that date any differentiation between men and women in the level of the said reduction will be definitively abolished, failing which the Commission will be obliged to bring the matter before the Court of Justice”.

However, Decree Law No 395 of 28 July 1981, converted into Law No 534 of 25 September 1981, further extended until 31 October 1981 the time-limit exceptionally authorized by the Commission in Mr Tugendhat's letter of 12 May 1981.

Decree Law No 646 of 16 November 1981, converted into Law No 3 of 15 January 1982, again extended the aforementioned period until 31 December 1981.

III —

The Commission waited until 23 November 1981 before reminding the Italian Government, in a letter signed by the Director-General of the Directorate General for Competition, of the text of the “final” decision of 15 September 1980 and informing it that the Commission “would be obliged to bring the matter before the Court of Justice if the provisions implementing the required adjustments were not sent to it immediately”.

But Decree No 91 of 24 March 1982 renewed the discrimination complained of for the period from 1 February 1982 to 31 March 1982.

On 10 May 1982, in a letter signed by the Director-General for Competition, the Commission informed the Italian Government that it had decided to bring the matter before the Court if the Italian Government did not take steps to comply with the Commission Decision of 15 September 1980 within a period of two months, that is by about 10 July 1982.

However, Law No 267 of 21 May 1982, which converted the Decree Law of 24 March 1982 into a law, extended that period until 30 June 1982 and again on 2 August 1982 Decree Law No 492 put the date back to 31 December 1982.

IV — On the basis of the second subparagraph of Article 93 (2) which provides :

“If the State concerned does not comply with this decision within the prescribed time, the Commission or any other interested State may, in derogation from the provisions of Articles 169 and 170, refer the matter to the Court of Justice direct”,

on 5 August 1982 the Commission applied to the Court for a declaration that, by not complying within the prescribed period (by 15 March 1981) with the Commission Decision of 15 September 1980, the Italian Republic had failed to fulfil one of its obligations under the EEC Treaty.

Since then a new decree, Decree Law No 694 adopted on 1 October 1982, has set back to 30 November 1982 the expiry of the extension laid down by Decree Law No 492 of 2 August 1982, which has since lapsed.

The Italian Government submitted a defence on 14 October 1982 but stated, after the Commission's reply had been filed, that it did not wish to exercise its right of rejoinder.

V —

In view of the precedent of the Court's judgment of 2 July 1974 in Italian Government v Commission ( 3 ), it is not disputed that the Italian measure in question constitutes an aid that is incompatible with the common market. There is no misunderstanding between the Italian authorities and the Commission as to the notification and the fact that the aid system to which the decision of 15 September 1980 was directed is a new one.

Although that decision was not published in the Official Journal of the European Communities until 8 October 1980, the text was sent to the Italian Government by the Commission in a letter of 17 September 1980 signed by Mr Haferkamp, Member of the Commission, which, moreover, explained in detail the reasons for that measure.

The Italian Government has never alleged that the statement of reasons for the decision itself was lacking or inadequate and has not requested that the decision be declared void.

It is true that the provision which the “final” decision of the Commission required the Italian Government to abolish is formally no longer in existence since Decree Law No 503 of 30 October 1980 has been repealed, but the substance of the measures is incorporated, without any break in continuity, in later legislation and, finally, in Decree Law No 694 of 1 October 1982. It therefore remained in force at least until 30 November 1982.

The Commission might have brought the application sooner; it might even have done so directly without again serving formal notice on the Italian Government, as it did on 10 May 1982, or giving it a two-month period of grace.

Moreover, the Italian Government admitted a contrarío in its defence that, even in formal terms, on 30 June 1981 it must be considered as not having complied with the decision of 15 September 1980 — at least in part. It limited itself to hoping that by the date of the oral proceedings, the amendment of the Italian legislation to comply with the decision “could be considered as having been fully achieved in terms of content, spirit and form”.

Without it being necessary to ascertain whether that hope was fulfilled, but taking into consideration the fact that the Commission itself extended the time-limit originally set in its decision of 15 September 1980, I am therefore of the opinion that the Court should rule as follows :

By maintaining after 10 July 1982 differentiation in the proportion of employers' contributions to sickness insurance taken over by the State in certain sectors of the economy according to whether workers are male or female the Italian Republic has failed to fulfil one of its obligations under the EEC Treaty.

I am also of the opinion that the Italian Government should pay the costs.

( 1 ) Translated from the French.

( 2 ) “If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources Ís not compatible with the common market having regard to Article 92, ... it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission.”

( 3 ) Case 173/73 [1974] ECR 709.