3.

If one therefore focuses one's attention upon the criticism with regard to the discrimination under which British producers are supposed to have suffered compared to the Irish owing to the adoption of different conversion rates for the green pound, one must first recall that the applicant founds this criticism upon the fact that on the one hand both countries formed a common currency area at the time in question and on the other hand producers farming in both countries found themselves in exactly the same situation as regards the price increases caused by the devaluation of the pound, so that the different calculation of the conversion rate for the green pound which directly affected income levels and led to distortions in competition could not therefore be justified at all. The Council, on the other hand, thinks that there were objective reasons for differentiation which at least rule out the accusation that it took arbitrary measures. Since actions in pursuance of the common agricultural policy were involved the Council thinks that the aims of Article 39 had to be borne in mind. This might be done with varying emphasis, in other words, one aim or another might be given priority for a time, which has been repeatedly affirmed in case-law, whilst taking into account the whole agricultural situation. Since there is clearly a major difference in the importance of agriculture and particularly beef production in the United Kingdom and Ireland, it must be regarded as permissible when determining the conversion rate for Ireland to pay more attention to securing a satisfactory income for agricultural producers whilst rather ensuring reasonable consumer prices in the United Kingdom. Against this the applicant argues that this ostensible necessary balancing of interests — producer income on the one hand and consumer prices on the other — can only be attempted if common prices are determined in units of account; however, when converting them into national currencies it is not permissible to take territorial peculiarities into account as well. Otherwise if, for example, regard were actually had to the economic situation in a country and therefore to its national economic policies, distortions would be allowed and results produced which would be incompatible with the principles of Article 40 — price policy on the basis of common criteria and uniform methods of calculation. But if the considerations adopted by the Council are not regarded a priori as unacceptable it must be borne in mind in this case that the circumstances referred to have always existed bút there have been divergent conversion rates only from a given date and to quite a varying degree with the result that agricultural prices differed in the United Kingdom and Ireland by 15 % in the 1976/77 marketing year, in the following year by 18 % and in the 1978/79 marketing year there was even a difference of 20 %. On the other hand it is at least desirable and it must be proved that any divergences correspond exactly to what must be regarded as essential with regard to the factors to be taken into account (such as varying levels of production). (a) As regards this argument one might be tempted to counter the applicant's reasoning by referring to the judgment in Case 138/78 (judgment of 21 February 1979, Hans-Markus Stölting v Hauptzollamt Hamburg-Jonas, [1979] ECR 713). As the Court will know, it held that green exchange rates were justified by the requirements of a common agricultural policy. The adoption of agricultural exchange rates may possibly involve advantages and disadvantages which may appear as discrimination. It remains true however that the green exchange rates serve to remedy monetary situations which, in the absence of Community measures, would lead to much more serious and general discrimination. Possibly, then, the matter should be viewed from the standpoint that when green rates are fixed a certain amount of discrimination seems quite acceptable provided it remains less than the discrimination which would otherwise occur as a result of chaotic monetary developments. In view of the fact that regulations such as concern us in these proceedings are only adopted unanimously and that green exchange rates cannot be brought closer to monetary reality against the wish of a government concerned, another general consideration to be borne in mind on this point is that it would hardly be acceptable to give British producers compensation from Community resources in the nature of deficiency payments by way of claims for administrative liability in order to make up for the adoption by the British Government at Community level of conversion rates which in pursuance of the requirements of economic policy take more account of the interest of consumers than of producers. Nevertheless I should not like to assume that these two considerations are likely by themselves to solve this case satisfactorily. (b) Upon a closer examination of the applicant's reasoning one may indeed start to question his reference to the prohibition on discrimination because it is permissible to doubt whether English and Irish producers are actually in a comparable position. I recall here the Council's observations — not challenged by the applicant — upon the different income situation of English farmers on the one hand and Irish on the other which is presumably attributable to different structures. Furthermore when the applicant says that owing to actual devaluation of the pound the cost situation has been influenced in the same way, namely by increases in costs, we must not forget that the different green exchange rates also provide for a certain amount of compensation. In actual fact the smaller devaluation in the United Kingdom results in the prices of other agricultural products also being lower and, in so far as these prices are to be considered as cost factors, calf breeders in the United Kingdom are in a more favourable position than those in Ireland. (c) But of more importance are considerations which actually go beyond the prohibition on discrimination and the question of what degree of differentiation is permissible in this connexion on the basis of objective facts, without the prohibition on discrimination actually being infringed. In fact in a claim for administrative liability like the one before us an approach restricted to the aforesaid rule for the protection of individuals should not prevail. Rather the question should be asked whether, even if some discrimination is indeed discernible, there have not been objective deliberations accompanied by differentiated treatment, which at least rule out any question of such a manifest and grave disregard for discretionary limits as to verge upon the arbitrary. This is particularly clear from the recent isoglucose levy judgments (116, 124 and 143/77). In those cases it was already clear after the preliminary ruling in Cases 103 and 145/77 that the production levies complained of were obviously inequitable under the prohibition on discrimination. Nevertheless it was held — and considerations of agricultural policy were not the least of the reasons — that the requirements for a claim for administrative liability on grounds of the illegality of the legislation were not satisfied since a comprehensive view of the case led to the conclusion that there was an absence of grave errors such as would make the treatment of the isoglucose producers appear arbitrary. If we are to follow those cases it is difficult to deny that the Council has pointed out some quite objective considerations of some weight to support the measures which it adopted. As I said before, instruments adopted under Article 3 of Regulation No 129 are in the nature of decisions of agricultural policy and are therefore to be worked out according to a sequence of ideas such as is typical of such decisions. An example appears in Article 39 (2) of the EEC Treaty, according to which when the common agricultural policy is worked out account must be taken of the fact that in the Member States agriculture constitutes a sector closely linked with the economy as a whole. This means that the whole economic situation must be taken into account; what matters therefore is the combined situation of both producers and consumers and not only' the individual position of a few members of either. Thus in the adoption of special measures like those under Article 3 of Regulation No 129 over and above the balancing of interests of producers and consumers necessarily required by Article 39, which can often be only inadequately achieved when common prices are fixed it is entirely justifiable to lay the stress on different interests according to the Member State concerned. The Council clearly acted on this basis. There can be no disputing that its remarks upon the position of agriculture in the total economy and in particular upon cattle breeding in Ireland on the one hand and the United Kingdom on the other are impressive. I will not recapitulate them now but I refer to page 10 of the defence and the appendices to that pleading. The important point made there is that Ireland is predominantly a producing and exporting country whilst the United Kingdom may be categorized as a consumer country. This should be borne in mind together with the fact that before accession the United Kingdom pursued a policy of low consumer prices, changes in which required by the Treaty have been considerably hampered by the economic difficulties between 1973 and 1977. Thus the greater emphasis placed on consumer interests when the green exchange rates for the United Kingdom were determined cannot be considered to be mistaken or clearly inappropriate. If a conversion rate resulted which not only took account of serious national interests in the context of an economic policy and a policy of combating inflation approved by the Community but also took into account the interests of the common agricultural policy by influencing the volume of production in the United Kingdom, then to my mind it is not permissible to hold that such an act verges on the arbitrary. If this is basically right, the applicant's reference to the divergent trend of the various green exchange rates and his view that the disparities must at least be required to reflect exactly the extent of the differences recorded in the relevant factors (such as the production deficit in the United Kingdom) cannot lead to any other conclusion. To that extent there is simply insufficient evidence of any manifestly improper manipulation. In actual fact the applicant has not shown that the Community measures to determine conversion rates have clearly gone beyond the requirements of the situation at the appropriate time nor has he made it clear that development in the economic situation gave no cause to vary the divergences between the green pounds as time went by.