2.

Let us now turn to the question whether the validity of the system might be doubted on account of it being of general application, i.e. independent of the country of origin of the product and of the basis of the contract and accordingly even in the case of imports from Bulgaria based upon the relationship between the DM and the dollar. In this connexion we might first of all remind ourselves of Article 2 of Regulation No 974, which states: ‘The compensatory amounts for the products covered by intervention arrangements shall be equal to the amounts obtained by applying to the prices the percentage difference between: — the parity of the currency of the Member State concerned declared to and recognized by the International Monetary Fund, on the one hand, and — the arithmetic mean of the spot market rates of this currency against the US dollar during a period to be determined.’ As regards products the price of which depends on the price of the products for which, within the framework of the common market in agriculture, intervention measures are provided, it is furthermore laid down in Article 2 (2) that ‘the compensatory amounts shall be equal to the incidence, on the prices of the product concerned, of the application of the compensatory amounts to the prices of the products referred to in paragraph 1, on which they depend’. In the case of a currency like the Bulgarian Lewa, which apparently did not follow the dollar but of which the rate of exchange vis-a-vis the DM remained essentially stable, this evidently led to excessively high compensatory rates, i.e. to compensatory amounts which exceeded the incidence of the currency measure. In the plaintiffs' view this amounted to an infringement of the principle of proportionality, to which reference was made in the preamble to Regulation No 974 itself. Furthermore, one might also treat this as a disregard of Article 39 (1) (e) (i.e. ensuring that supplies reach consumers at reasonable prices), as a disregard of the prohibition of discrimination contained in Article 40 of the EEC Treaty and as an infringement of Article 110 of the Treaty, which lays down a liberal trading policy. On the other hand, in the plaintiffs' opinion these infringements would not have occurred, if one had attempted to achieve a separate equalization vis-a-vis all important trading partners, if following the example of the levy system (that is of paying attention to the most favourable possibilities of purchasing on the world market) one had thought in terms of what are basically the countries of origin of certain products or if at any rate one had proceeded by calculating the mean of all third country currencies to be calculated according to trading volume and its relationship to the DM. Accordingly we are obliged in the present context to ask ourselves, whether such possibilities of solution could have been implemented without considerable difficulties and whether to have disregarded them must therefore be termed an erroneous exercise of discretion. In undertaking this rather delicate examination, one is, I suppose, bound to agree with the Commission when they point out that keeping track of the currency situation and of its different development in a large number of states had brought considerable difficulties in its wake and that it could have created appreciable complications of the compensation system if correspondingly differentiated compensatory amounts had to be ascertained in respect of a multitude of basic products and manufactured end-products. In fact, even the existing system had resulted in an extraordinarily extensive catalogue of levies and, looked at in this way, it is understandable when the Commission considers that applying the method which the plaintiffs consider appropriate would have resulted in an overloading of the administration. Added to this is the fact that the resulting difficulty of surveying and the changeable nature of the compensatory scheme would have rendered trade more difficult. One must also not forget that the differential scheme desired by the plaintiffs might have produced a danger of circumventing deals and fraudulent manoeuvres. One could only have countered this by way of certificates of origin and by controls of import contracts as well as movement of goods, which again would have resulted not only in a considerable administrative effort — this time at national level — but also impediments and delays to trade. In my view, such factors cannot be disregarded when one is evaluating complicated measures of protection in the field of monetary policy, measures which at the time of their promulgation were in any event designed for only a limited period of time and in connexion with which the legislator is obviously entitled to a large margin of discretion. Similar considerations which allow us to doubt the usefulness of the plaintiffs' theory, also apply in regard to the other solution, i.e. on the question whether for the purpose of the compensatory provisions one ought not to have taken into account the mean of variations in the rates of exchange of all third country currencies. In fact the inquiries necessary in this connexion, whilst having due regard to the significance of movements of trade in different products and their variations, would surely have proved somewhat difficult and long-winded. There is also the not unimportant factor that levies calculated in this way would result in an insufficient protection against imports based on dollars and in many cases would have led to insufficient refunds — the corollary of compensatory levies. If one further bears in mind that on the introduction of the scheme most deals in agricultural products were concluded on a dollar basis, that at that time the dollar was the pivot of the international monetary system which was as a rule followed by the other freely convertible currencies, then, having regard to the fact that the relevant information supplied by the Commission was only disputed by the plaintiffs in an unsubstantiated manner, one has difficulty in holding that the system created by Article 2 of Regulation No 974 had to be treated as invalid by reason of infringement of the principle of proportionality. I must say here and now, that similar considerations also apply in regard to the plaintiffs' references to Articles 40, 39 and 110 of the EEC Treaty. As regards Article 40, i.e. the prohibition against discrimination, one cannot from the outset avoid the impression that the plaintiffs started out on the basis of a false comparison, that is one between the position of the producers and that of the importers. However, insofar as the plaintiffs might have thought that individual products due to excessive loading with compensatory levies had been discriminated against, one can rightly counter this by saying that for the purpose of assessing the compensatory amount, there applied uniform criteria and that the authority granted by Regulation No 974 was also — as might have been foreseen at the time of its promulgation — applied by all relevant Member States. Accordingly one can hardly speak of a disregard of Article 40 of the EEC Treaty. Insofar as the plaintiffs pointed to the aims of Article 39 and argued that the compensatory provision had disregarded the instruction to ensure that supplies reach consumers at reasonable prices and had on the other hand concentrated excessively on the protection of agriculture, not least by failing to bear in mind the advantages flowing from the revaluation of the DM, one can say this. Advantages accruing to agriculture from revaluation did no doubt exist in regard to investment goods. However, as the Commission rightly thinks, they ought not to be exaggerated. It was also probably difficult to measure them and to attribute a due proportion to the individual products. Accordingly, one cannot object to the fact that within the framework of the compensatory provisions they were not taken into account. Besides, as has already been demonstrated, since one could not differentiate within the framework of the compensatory provisions in relation to the different countries of origin, since a sufficient protection could only be ensured when one had due regard to the main currency, the dollar, and since Article 39 does not refer to the lowest prices but only to reasonable, consumer prices, i.e. since it does not lay down solely the need for having regard to the interests of the consumer, therefore, having regard also to the different objectives enumerated in Article 39 of which pursuant thereto account shall be taken and which leave a wide room for discretion, one cannot really conclude that the system is invalid. The same finally also applies to the assessment of the disputed Regulation from the point of view of Article 110 of the EEC Treaty. Admittedly, the object of liberalizing trade is anchored within that Article. The provision does not however contain precise criteria, rather does it in every case permit a wide room for discretion. One can hardly assume that it was not properly applied, when one bears in mind what has been said in relation to the impossibility in practice of differentiating the compensatory scheme and also if one bears in mind that not only did there have to be an alignment with the objects of Article 39, but likewise that quantitative import restrictions were called for. Consideration of the second range of problems accordingly does not lead us to conclude, that Regulation No 974/71 was invalid, on account of the fact that it was geared to the relationship DM/dollar.