Opinion of Mr Advocate General Jacobs delivered on 27 February 1997. - SAM Schiffahrt GmbH and Heinz Stapf v Bundesrepublik Deutschland. - Reference for a preliminary ruling: Oberverwaltungsgericht für das Land Nordrhein-Westfalen - Germany. - Inland waterway transport - Structural improvements - Contributions to Scrapping Fund - Validity of Community legislation. - Joined cases C-248/95 and C-249/95.



European Court reports 1997 Page I-04475



Opinion of the Advocate-General

1 In the present cases the Oberverwaltungsgericht Nordrhein-Westfalen (Higher Administrative Court for the Region of North Rhine Westphalia) seeks a ruling from the Court on the validity of the Community regulations on structural improvements in inland waterway transport.

Relevant Community provisions

2 Council Regulation (EEC) No 1101/89 of 27 April 1989 on structural improvements in inland waterway transport (1) was adopted in response to the structural overcapacity which was considered to exist in the fleets operating on the linked inland waterway networks of Belgium, France, Germany, Luxembourg and the Netherlands. The regulation, which is based on Article 75 of the Treaty, introduced a scheme for the scrapping of inland waterway vessels coordinated at Community level but financed by the transport undertakings themselves. Subject to certain exceptions, the regulation applies to cargo-carrying vessels and pusher craft providing transport services registered in a Member State or operated by an undertaking established in a Member State.

3 The Member States concerned are required to set up a Scrapping Fund to be administered by the competent national authorities. The Fund is to have separate accounts for dry cargo carriers and pusher craft, on the one hand, and tanker vessels on the other. (2)

4 Owners of vessels covered by the regulation are required to pay an annual contribution to the relevant Fund. (3) An owner scrapping a vessel receives a scrapping premium from the Fund to which his vessel belongs in so far as the financial means are available. (4) The rates of the annual contributions and of the scrapping premiums are to be fixed by the Commission. (5) Contributions and premiums are to be calculated on the basis of either deadweight tonnage for cargo-carrying vessels or motive power for pusher craft. (6) The Commission must ensure that contributions are fixed at a level which ensures that the Funds have sufficient financial resources to make an effective contribution to reducing the structural imbalance between supply and demand in the inland waterway transport sector, taking into account the difficult economic position of the sector. (7) Before adopting its decisions the Commission is required to consult the Member States and the organizations representing inland waterway carriers at the Community level; its decisions must also take account of the results of observation of the transport markets in the Community and of any foreseeable changes therein, as well as the need to avoid any distortion of competition to an extent which is contrary to the common interest. (8)

5 The regulation also introduces what is known as the `old-for-new' rule, which is designed to ensure that the entry of new vessels on to the market does not jeopardize the scheme. Under the rule new vessels may be brought into service on inland waterways only where the owner of the new vessel scraps a tonnage of carrying capacity equivalent to the new vessel without receiving a scrapping premium or, if not, pays a special contribution to the relevant Fund corresponding to the scrapping premium fixed for a tonnage equal to that of the new vessel or the tonnage by which the new vessel exceeds that of a scrapped vessel. (9)

6 Finally, the regulation required the Commission to draw up a report two years after its entry into force evaluating the effects of the measures adopted in implementation thereof and to submit it to the European Parliament and the Council. (10)

7 Commission Regulation (EEC) No 1102/89 of 27 April 1989, (11) as amended by Commission Regulation (EEC) No 3685/89, (12) fixes the annual contributions, the scrapping premiums and the conditions under which they may be obtained with a view to reducing fleet capacity by 10% in respect of dry cargo vessels and pusher craft and by 15% in respect of tanker vessels. (13) The regulation envisages the need for a total budget of ECU 130.5 million, comprising ECU 81.2 million for dry cargo vessels, ECU 44.3 million for tanker vessels and ECU 5 million for pusher craft. (14) Article 3(1) of the regulation, as amended, fixes the rates for the contributions as follows:

`Dry cargo vessels

- Self-propelled barges: ECU 1,00 per tonne - Push barges: ECU 0,70 per tonne - Lighters: ECU 0,36 per tonne

Tanker vessels

- Self-propelled barges: ECU 3,00 per tonne - Push barges: ECU 1,50 per tonne - Lighters: ECU 0,54 per tonne

Pusher craft:

- 0,40 per kW'.

8 Article 3(2) provides for reductions in the contributions for vessels with a deadweight capacity of less than 450 tonnes and those with a deadweight capacity of between 450 and 650 tonnes.

9 Article 5(1) of the Commission regulation, as amended, provides:

`The scrapping premiums for the different types and categories of vessels shall be within a bracket ranging from 70 to 100% of the following rates:

Dry cargo vessels

- Self-propelled barges: ECU 120 per tonne - Push barges: ECU 60 per tonne - Lighter: ECU 43 per tonne

Tanker vessels

- Self-propelled barges: ECU 216 per tonne - Push barges: ECU 108 per tonne - Lighters: ECU 39 per tonne

Pusher craft:

- 240 ECU/kW'.

10 Article 5(2) provides for reductions in the maximum rates of the premiums for vessels with a deadweight capacity of less than 450 tonnes and those with a deadweight capacity of between 450 and 650 tonnes.

11 Applicants for scrapping premiums are required to indicate the percentage within the 70% to 100% range which they wish to receive. (15) Valid applications for a 70% premium are automatically accepted within the limits of the financial resources available in the various accounts. (16) The Fund authorities notify applicants for premiums exceeding 70% as to whether the applications are successful. (17)

The facts and the national court's questions

12 The plaintiffs in the main proceedings, SAM Schiffahrt (`SAM') and Mr Stapf, are owners of motorized cargo vessels used for transporting goods on the Rhine, its tributaries and the western German canals. In their actions before the German courts they are challenging decisions by the competent German authority, the Wasser- und Schiffahrtsdirektion West (Western Waterways and Navigation Board), levying contributions to the relevant Scrapping Fund for the 1990 financial year pursuant to the Community regulations. Following the dismissal of their actions by the Verwaltungsgericht (Administrative Court), they appealed to the Oberverwaltungsgericht, which put the following questions, identical in the two cases, to the Court:

`1. Was the adoption of Council Regulation (EEC) No 1101/89 of 27 April 1989, Commission Regulation (EEC) No 1102/89 of 27 April 1989 and Commission Regulation (EEC) No 3685/89 of 8 December 1989 appropriate within the meaning of Article 75(1)(c) of the EEC Treaty?

2. If the answer to Question 1 is in the affirmative, can those regulations become invalid if, subsequently to their adoption, they cease to be appropriate within the meaning of Article 75(1)(c) of the EEC Treaty?

3. If the answer to Question 2 is in the affirmative, were the regulations still appropriate at the relevant time for the levying of the 1990 contributions to the Scrapping Fund?

4. Does the obligation laid down in the regulations to pay contributions for 1990 infringe fundamental Community rights or other Community law, in particular the right to property, the right to pursue a trade or profession, the principle of equality and the principle of proportionality?'

Appraisal of the issues

13 By its first three questions the national court in effect seeks a ruling on whether the Council and Commission regulations were invalid from the moment of their adoption, or during the year 1990, because they did not constitute `any other appropriate provisions' relating to transport within the meaning of Article 75(1)(c) of the EEC Treaty (now Article 75(1)(d) of the EC Treaty). By its final question the national court asks whether the regulations were invalid in so far as the obligation to contribute to a Scrapping Fund was contrary to Community law, in particular general principles.

14 Those questions consolidate in admirable fashion the issues raised by the array of arguments and assertions advanced by SAM and Mr Stapf before the national court to show that the Community regulations are invalid. In the proceedings before this Court both parties separately presented written and oral argument. Further explanation of their case is provided by the order for reference and the pleadings submitted by Mr Stapf to the Oberverwaltungsgericht, annexed to his written observations. Their main contention is that the Community regulations have entirely failed to achieve their aims and were plainly not appropriate provisions within the meaning of Article 75(1)(c) of the Treaty. They also submit that the regulations infringe the principle of equal treatment, as embodied in particular in Article 7 of the EEC Treaty (now Article 6 of the EC Treaty), and Articles 14 and 18 of the European Convention on Human Rights.

15 SAM and Mr Stapf emphasize that the scrapping of vessels cannot be regarded as an end in itself; the success of the scrapping programme can be assessed only on the basis of whether it has attained its aims of securing structural improvements, preventing distortions of competition and increasing the level of freight. SAM, referring to two documents issued by the Federal Minister for Transport, (18) notes that there has in the period from 1970 to 1990 been a substantial reduction in the number of vessels and tonnage and yet that has done nothing to prevent the deterioration of the economic situation in the inland waterway transport sector. Mr Stapf notes that the volume of freight and freight rates are significantly lower in 1995 than in 1957. The deteriorating situation has resulted in bankruptcy for many operators whose position is made worse by the obligation to contribute to the Scrapping Fund.

16 According to SAM and Mr Stapf, the scrapping programme assumes that it is simply a question of sharing a fixed volume of freight between fewer vessels. However, the inland waterway transport industry is in competition with rail and road carriers. The effect of the programme is to force competitive operators to finance the scrapping of vessels of uncompetitive operators who would have been forced out of business anyway by the laws of the market. Competitive operators are therefore subject to an additional burden without receiving any advantage. The additional burden and resultant reduction in market flexibility has made it more difficult to respond to increased competition both within the industry (in particular from vessels from the Netherlands and from Eastern European countries) and from rail and road carriers. The Community regulations discriminate in favour of the latter to the detriment of the inland waterway transport industry. They are also unfair to German vessel owners who had already made contributions to a national fund before the Community scheme was introduced.

17 SAM and Mr Stapf advance a number of other detailed arguments and assertions in support of their main contentions:

- There is no overcapacity in the sector; on the contrary, a scarcity arose in 1990 because of a lengthy period of low water, leading to a loss of custom to other carriers, especially rail. Any overcapacity could equally be remedied by a prohibition of night and weekend operation (SAM).

- The beneficiaries of the programme are essentially large shipping companies, which reinvest the scrapping premiums in building new vessels, thereby undermining the goal of structural reform (SAM).

- A reduction in freight capacity cannot affect freight rates since the relevant tariffs are fixed by the State (SAM).

- The amount of the contributions is fixed by reference to carrying capacity and takes no account of the capacity utilization rates of individual vessels; the proper measure should be the amount of freight carried (SAM).

- There is no rational ground for excluding towing vessels from the scheme (Mr Stapf).

- The forecast as to the development of the relevant market was out of date, being based on findings made in 1976 (SAM and Mr Stapf).

- The procedure for applying for scrapping premiums is no more than enforced gambling. A vessel owner must decide whether to apply for the 70% minimum or to risk applying for a higher premium. It would have been possible to introduce a procedure whereby a single rate was applied to all valid applications determined in accordance with available funds (SAM and Mr Stapf).

18 SAM and Mr Stapf contend in the alternative that, even if the Council regulation was appropriate within the meaning of Article 75(1)(c) of the Treaty at the moment of its adoption, the Council was under an obligation to repeal it as soon as it became apparent that it was not going to achieve its purpose. They point out that Article 10(4) of the Council regulation itself lays down a procedure for evaluating the effects of the measures taken.

19 The French and German Governments, the Council and the Commission all take the view that none of the matters raised by SAM and Mr Stapf casts doubt on the validity of the Community regulations. I am also of that view.

20 The Court has previously had occasion to interpret Regulation No 1101/89 in two cases, Teirlink and Wiljo. (19) In a further case, Driessen, (20) the Court was asked to consider the validity of the special contributions rules laid down in the second indent of Article 8(1)(a) of the Council regulation, in conjunction with the transitional rules in Article 8(3)(a). In that case the applicants in the main proceedings, who had commissioned the construction of vessels prior to the entry into force of the regulation, argued that those provisions took insufficient account of their situation. The Court's judgment in that case however provides little guidance for the solution to the present cases, in which SAM and Mr Stapf are in effect challenging the very principle of the scrapping programme.

21 Their arguments, it seems to me, boil down to an assertion that the Council has exceeded its legislative powers under Article 75(1)(c) of the Treaty by adopting measures that:

(a) were unnecessary because there was no structural imbalance in supply and demand (SAM only);

(b) were not appropriate - or ceased to be appropriate - to remedy the structural imbalance;

(c) discriminated against the inland waterway sector in favour of other transport sectors, between different vessel owners or against German vessel owners;

(d) constituted an infringement of the fundamental rights of vessel owners.

22 Although the order for reference states that SAM and Mr Stapf rely on Articles 76, 78, 80, 85 and 92 of the Treaty, they have not put forward any arguments warranting specific consideration of those provisions. Nor is it obvious how any of those provisions is infringed.

23 In examining the arguments put forward by SAM and Mr Stapf, it is important to bear in mind the limits of the Court's power to review legislative measures adopted by the Council. Those limits arise from the fundamental principle of the separation of powers within the Communities. Where the Treaty has conferred wide legislative powers on the Council, it is not for the Court to substitute its own assessment of the economic situation or of the necessity or suitability of the measures adopted for those of the Council. By doing so it would usurp the legislative role of the Council by imposing its own views of the economic policies to be pursued by the Communities. (21)

24 The Court has had occasion to consider the limits of its power to review the exercise by the Community institutions of their legislative powers mainly in the sphere of agriculture. There it has long been established that `in determining their policy in this area, the competent Community institutions enjoy wide discretionary powers regarding not only establishment of the factual basis of their action but also definition of the objectives to be pursued, within the framework of the provisions of the Treaty, and the choice of the appropriate means of action'. (22) Consequently, `in reviewing the exercise of such a power the Court must confine itself to examining whether it contains a manifest error or constitutes a misuse of power or whether the authority in question did not clearly exceed the bounds of its discretion'. (23) It may be noted that the Court adopted a similar approach in reviewing the decisions of the High Authority in the context of the ECSC Treaty. (24)

25 It is clear that the same applies to measures adopted in the framework of the common transport policy. The Court has held that, `in giving the Council the task of adopting [that policy], the Treaty confers wide legislative powers upon it as regards the adoption of appropriate common rules'. (25) As the present cases show, the exercise by the Council of those powers entails the making of difficult policy choices on the basis of complex economic data.

26 Against that background I turn to the arguments put forward by SAM and Mr Stapf.

The alleged absence of surplus capacity

27 I can deal briefly with SAM's contention that the scrapping programme was unnecessary because there was no surplus capacity in the inland waterway sector. SAM itself contradicts that assertion in its written observations by referring to a structural overcapacity of 15% to 20%. The Commission claims, without contradiction, that at the moment of the adoption of the Council regulation the relevant Member States were unanimous in recognizing the existence of significant structural overcapacity in the sector, a view shared by the Union Internationale de la Navigation Fluviale. Moreover, the Commission, referring to its communication of 23 May 1995, (26) claims - again without contradiction - that the inland waterway industry itself estimated that there remained surplus capacity of around 15% in May 1995. That there continued to be surplus capacity in the industry in the period from 1988 to 1993 is also clear from the Commission's report of 16 November 1993 drawn up pursuant to Article 10(4) of the Council regulation. (27)

28 The Commission's claims are consistent with the figures given in the abovementioned documents of 8 December 1994 issued by the Federal Minister for Transport, (28) annexed to SAM's written observations. The Bundesminister estimates the surplus capacity in the German fleet at around 15% and notes that the same applies to the other Member States.

29 As regards the argument that such surplus capacity as existed could have been remedied by a prohibition on night-time and weekend operation, the choice of the most appropriate policy is, as already noted, in principle a matter for the Council. It is in any event difficult to see how such a prohibition would have increased the profitability of undertakings in the sector. Moreover, if, as SAM and Mr Stapf suggest, inland waterway transport had been in close competition with other forms of transport, the severe operating constraints entailed by such a prohibition would surely have led to a greater loss of trade to rail and road carriers than the measures adopted.

The appropriateness of the Community regulations

30 Mr Stapf and SAM contend that the scrapping programme was not an appropriate response to the crisis in the industry. They base that contention essentially on the allegation that the programme has been unsuccessful. It has failed to secure structural improvements, to prevent distortions of competition or to increase the level of freight. The industry is still in crisis.

31 I am not persuaded by that argument. A preliminary point which should be made is that nowhere in its preamble does the Council regulation state that its aim is to increase levels of freight. The essential aim of the regulation is rather to reduce overcapacity in the industry in order to bring supply into line with demand for inland waterway transport. In that regard it does not follow from the mere fact that a Council regulation is unsuccessful, or only partly successful, that the Council exceeded its legislative discretion in adopting it. That would be the case only if the Council committed a manifest error in the appraisal of the economic data or chose a policy that was manifestly unsuitable to remedy the problem. There is no evidence that that was so here. On the contrary, it appears that the scrapping programme met with a measure of success. The essential purpose of the programme was to secure a reduction in the capacity of the inland waterway fleets in response to a continuing fall in demand. The Commission has claimed - without contradiction - that the scrapping programme led to a reduction of around 8% in fleet capacity between 1 January 1990 and 1 July 1994. Moreover, the Commission's report of 16 November 1993 (29) shows that in the dry cargo sector freight prices increased more rapidly than costs in the period from 1988 to 1991. The Commission's conclusion in its report that the improvement during that period was attributable to the combination of reduced capacity and stable demand seems plausible.

32 In 1992 and 1993 there followed a sudden fall in freight prices, which the Commission's report attributes to a recession in the industries on which the inland waterway sector is particularly reliant, namely construction, coal and steel and chemicals. In its written observations SAM also refers to a 30% to 60% reduction in the volume of freight. According to the abovementioned documents of 8 December 1994 issued by the Bundesminister für Verkehr, there was also a reduction in freight prices of between 30% and 40% on average and up to 60% for certain goods such as coal. The documents attribute the reduction partly to short-term economic difficulties but mainly to increased competition following the removal of fixed freight tariffs in the context of the liberalization of the internal market.

33 Clearly, the modest reduction in fleet capacity achieved through the scrapping programme was insufficient to counteract such a severe fall in demand and collapse in freight prices; the financial resources available to the various Funds have been inadequate to meet the demand for scrapping premiums. (30) Nevertheless it is logical to assume that such reduction in capacity as was achieved must have helped to prevent an even more serious deterioration in the situation in the sector and to that extent the programme met with partial success.

34 I am not persuaded by the argument that the obligation to contribute to the scrapping programme made it more difficult for the industry to compete with rail and road carriers leading to a reduction in demand for inland waterway transport. For the reasons given below I do not think inland waterway transport is readily interchangeable with other forms of transport, in particular road transport (which, according to the documents issued by the Bundesminister für Verkehr, accounts for 54.1% of the total German market in goods transport). Moreover, it cannot seriously be argued that the annual contributions levied on vessel owners, which are relatively moderate (DM 3 231 for SAM and DM 4 179 for Mr Stapf, for the period in question), added so significantly to operating costs as to impair their competitive position. The documents before the Court suggest that the truth of the matter is that SAM and Mr Stapf are unfortunate enough to be in a market sector in which the effects of severe recession and market liberalization have been exacerbated by existing overcapacity.

35 I do not in any event accept that the vessel owners received no advantage in return for the contribution. It may be true that, even without the scrapping programme, less efficient operators would eventually have been driven out of the market anyway (although it might equally have been undercapitalized efficient operators who were unable to survive). However, it seems reasonable to assume that the incentive to leave the sector provided by the programme speeded up the reduction in capacity. Moreover, it allowed such reduction to occur in an orderly manner by enabling vessel owners to leave the industry on reasonable financial terms. It is in accordance with the objectives of the Treaty, as set out in Article 2 and pursued in the framework of the common transport policy, that consideration should be given to the possibilities of public intervention in the market in exceptional situations in order to moderate the severity of the effects which the free play of the market forces might have in the economic and social spheres. (31)

36 As regards SAM's argument that a reduction in freight capacity cannot affect freight rates since the relevant tariffs are fixed by the State, the Commission replies that the system of fixed freight rates applicable in Germany until 1 January 1994 did not apply to international transport. Moreover, even where fixed tariffs applied, a reduction in the fleet capacity would lead to greater utilization of vessels.

37 SAM's and Mr Stapf's argument that the procedure for the award of scrapping premiums is enforced gambling does not seem to me to be relevant to the main proceedings, which concern the levying of the annual contribution to the Fund. If the award procedure were held to be unlawful, that would lead only to a finding of partial invalidity and would not affect the obligation to contribute to the Fund. In any event, I find the reasons justifying the choice of method given by the Commission convincing. In particular I share its view that the method ensures that the best possible use is made of the limited funds available. It also has the advantage of allowing those who are particularly keen to leave the industry to opt for a guaranteed minimum premium within the limits of available funds.

38 I do not think it necessary in the present case for the Court to reply specifically to the national court's second question, which raises the issue of principle whether a Community regulation valid at the moment of its adoption may subsequently become invalid. I do not think that the present cases provide an appropriate context in which to consider that issue, which merits more detailed consideration than it has been given in the present proceedings. In general, as the Court has held, (32) the validity of a measure can be assessed only by reference to the situation when it was enacted. It seems to me that there might none the less be circumstances in which the Community legislature is under an obligation to repeal or amend a measure to take account of subsequent developments; that might be so where, for example, after its adoption a measure began to produce discriminatory effects, or had plainly achieved its purpose so that there was no longer any justification for the burden placed on individuals.

39 However, that situation clearly does not arise here. The period in issue in the main proceedings is the financial year 1990, which was the first year in which the Council regulation applied. (33) Moreover, since as already noted (see paragraphs 27 and 28) there has continued to be substantial surplus capacity in the fleet, the Council is justified in maintaining measures designed to reduce that capacity. It may also be noted that, in recently adopting Regulations Nos 2819/95 (34) and 2254/96, (35) the Council was evidently of the view that Community action should continue primarily to take the form of a scrapping programme based on solidarity between undertakings and merely sought to reinforce such action by providing for supplementary financing from national and Community funds. (36)

Alleged breach of the principle of equal treatment

40 SAM and Mr Stapf contend that the Council regulation infringes the principle of equal treatment in several respects. First, it discriminates against German vessel owners because they had already made contributions to a national fund before the Community scheme was set up. That argument is plainly untenable. It would clearly be unworkable to adopt Community rules which had to make allowance for the existence, nature and extent of previous national intervention measures. Moreover, the very notion of a common policy is based on replacement of differing national schemes with a common approach. In any event, it appears from the fourth recital in the preamble to the Council regulation that national vessel-scrapping schemes already existed in `certain Member States'.

41 Secondly, Mr Stapf and SAM contend that the Council regulation discriminates against the inland waterway sector in favour of rail and road carriers. However, there is no evidence to suggest that the Council erred in coming to the view that undertakings in the inland waterway transport sector were in an objectively different position from those in other transport sectors and that specific action in that sector was necessary. Inland waterway transport is self-evidently not wholly interchangeable with other forms of transport. It is particularly well suited to the cost-effective transport of bulky loads over long distances. Being dependent on the waterway network, it does not on the other hand have the flexibility of rail and in particular road carriage. The Council came to the view that there had been structural surplus capacity in the inland waterway fleets for some time and that there was no prospect of any increase in demand over the next few years; on the contrary, the sector's share of the total market was continuing to decline owing to changes in the basic industries representing the sector's major customers. (37) It seems to me that against that background the Council had ample justification for adopting measures specific to the inland waterway sector designed to absorb the surplus capacity in the sector.

42 Thirdly, Mr Stapf contends that there are no grounds for excluding towing vessels from the scrapping scheme. However, the Commission explained in its written observations, without contradiction, that towing vessels have long ceased to play any significant role in inland waterway transport and are used mainly as auxiliary vessels in ports. They do not therefore contribute to the surplus capacity in the inland waterway transport sector.

43 Fourthly, SAM complains that the amount of the contribution is fixed by reference to carrying capacity and takes no account of the capacity utilization rates of individual vessels. I do not find that argument persuasive. The contribution is not fixed at a flat rate but is based on the deadweight tonnage of individual vessels. It seems to me that the Council was perfectly entitled to consider that a contribution intended to finance a reduction in capacity should be based on the tonnage which a vessel contributed to the total fleet capacity. Moreover, as the Commission points out, calculation of the contribution on the basis of the annual freight utilization rate of each vessel would have given rise to substantial administrative and supervisory difficulties. As regards SAM's argument that the beneficiaries of the scrapping programme are essentially large shipping companies which re-invest the scrapping premiums in building new vessels, I think the Commission's difficulty in following that line of reasoning is entirely understandable. By requiring the owner of new vessels to pay a special contribution to the relevant Fund corresponding to the scrapping premium for a tonnage equal to that of the new vessel the regulation ensures that the entry of new vessels on to the market does not jeopardize the scheme. (38)

44 SAM and Mr Stapf contend finally that the scrapping programme places them at a disadvantage vis-à-vis their competitors from the Netherlands and Eastern European countries. It is difficult to see how the scrapping programme can place German vessel owners at a disadvantage in relation to competitors from other Member States since those competitors are also subject to the obligation to contribute to a scrapping fund. I would add that I fail to see the relevance to the issue of the validity of the scrapping programme of SAM's claim at the hearing that Netherlands undertakings receive various forms of State subsidies.

45 It is true that Community undertakings may be placed at a disadvantage vis-à-vis competitors who are established in a non-member country and operate vessels that are not registered in a Member State and who are therefore not subject to the Community scrapping scheme. It is certainly desirable that the Community should endeavour in appropriate cases to reach agreements with non-member countries so as to ensure that intervention measures such as those in issue are not undermined. Indeed in the last recital in the preamble to the regulation the Council stated that it was desirable for Switzerland to adopt similar measures and noted that it had expressed its willingness to do so. However, it is clear that failure to reach such agreement with the relevant non-member countries cannot render intervention measures taken unilaterally by the Community invalid. In any event the documents of 8 December 1994 issued by the Bundesminister show that the German and Dutch fleets share 88% of the total trade on German inland waterways. Dutch undertakings are clearly the most important competitors for German undertakings, taking 43% of the market (as against 45% for German undertakings).

The alleged violation of fundamental rights

46 SAM and Mr Stapf contend that the Community regulations violate their fundamental rights, referring in particular to the freedom from discrimination, the right to property and the freedom to pursue a trade or business.

47 It is well established that respect for fundamental rights forms part of the general principles of Community law, and that in ensuring respect for such rights the Court takes account of the constitutional traditions of the Member States and of international agreements, notably the European Convention on Human Rights, which has special significance in that respect. Article F(2) of the Treaty on European Union, which provides that the Union shall respect fundamental rights, as guaranteed by the Convention and as they result from the constitutional traditions common to the Member States, as general principles of Community law, gives Treaty expression to the Court's case-law. (39)

48 However, for the reasons already given there is in my view no breach of the prohibition of discrimination in the present cases. Moreover, in relation to the right to property and the freedom to pursue a trade or business, the Court has held that:

`... those principles are not absolute, but must be viewed in relation to their social function. Consequently, the exercise of the right to property and the freedom to pursue a trade or profession may be restricted, particularly in the context of a common organization of a market, provided that those restrictions in fact correspond to objectives of general interest pursued by the Community and do not constitute a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed.' (40)

49 As the Commission suggests, the Community rules were adopted in the framework of the common transport policy with a view to achieving objectives of general interest pursued by the Community. The relatively modest contribution obligation imposed on vessel owners can scarcely be regarded as a disproportionate and intolerable interference impairing the very substance of their rights.

Conclusion

50 Accordingly, I am of the opinion that the questions referred by Oberverwaltungsgericht Nordrhein-Westfalen should be answered as follows:

Consideration of the matters examined has disclosed no factor of such a kind as to affect the validity of Council Regulation (EEC) No 1101/89 and Commission Regulations (EEC) Nos 1102/89 and 3685/89.

(1) - OJ 1989 L 116, p. 25. The Regulation has since been amended by Council Regulations Nos 3572/90, OJ 1990 L 353, p. 12; 844/94, OJ 1994 L 98, p. 1; 3314/94, OJ 1994 L 350, p. 8; 2819/95, OJ 1995 L 292, p. 7 and 2254/96, OJ 1996 L 304, p. 1, and by Commission Regulations Nos 2812/94, OJ 1994 L 298, p. 22 and 2310/96, OJ 1996 L 313, p. 8. Those amendments are not directly relevant to the present cases.

(2) - Article 3.

(3) - Article 4.

(4) - Article 5.

(5) - Article 6(1).

(6) - Article 6(3).

(7) - Article 6(4).

(8) - Article 6(7).

(9) - Article 8(1).

(10) - Article 10(4).

(11) - Commission Regulation (EEC) No 1102/89 of 27 April 1989 laying down certain measures for implementing Council Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport (OJ 1989 L 116, p. 30).

(12) - Commission Regulation (EEC) No 3685/89 of 8 December 1989 amending Regulation (EEC) No 1102/89 laying down certain measures for implementing Council Regulation (EEC) No 1101/89 on structural improvements in inland waterway transport (OJ 1989 L 360, p. 20). Regulation No 1102/89 has since been further amended by Regulations Nos 317/91 (OJ 1991 L 37, p. 27), 3690/92 (OJ 1992 L 374, p. 22), 3433/93 (OJ 1993 L 314, p. 10), 3039/94 (OJ 1994 L 322, p. 11), and 2326/96 (OJ 1996 L 316, p. 13). Those amendments are not directly relevant to the present cases.

(13) - Article 1(1).

(14) - Article 1(2).

(15) - Article 6(2).

(16) - Article 6(3).

(17) - Article 6(4).

(18) - Bericht zur Lage der Binnenschiffahrt und Beschluss des Bundeskabinetts and Statement des Bundesministers für Verkehr zum Bericht zur Lage der Binnenschiffahrt, both dated 8 December 1994.

(19) - Case C-414/93 Teirlinck [1995] ECR I-1339; Case C-178/95 Wiljo v Belgische Staat, judgment of 30 January 1997.

(20) - Joined Cases C-13/92 to C-16/92 Driessen and Others [1993] ECR I-4751.

(21) - See A.G. Toth, The Oxford Encyclopaedia of European Community Law, Vol. I, Oxford 1990, pp. 338 and 339.

(22) - Joined Cases 197/80 to 200/80, 243/80, 245/80 and 247/80 Ludwigshafener Walzmühle v Council and Commission [1981] ECR 3211, paragraph 37 of the judgment. See also, for example, Case 136/77 Racke v Hauptzollamt Mainz [1978] ECR 1245, paragraph 4; Case 166/78 Italy v Council [1979] ECR 2575, paragraph 14; and Case 138/79 Roquette Frères v Council [1980] ECR 3333, paragraph 25. See also, in relation to measures adopted under the common commercial policy, the Opinion of Advocate General Léger of 26 September 1996 in Cases C-150/94 United Kingdom v Council and C-284/94 Spain v Council, at paragraphs 89 to 93 of the Opinion.

(23) - Roquette Frères, paragraph 25 of the judgment.

(24) - See, for example, Case 6/54 Netherlands v High Authority [1955] ECR 103.

(25) - Case 97/78 Schumalla [1978] ECR 2311, paragraph 4 of the judgment.

(26) - Communication on a common policy on the organization of the inland waterway transport market and supporting measures, COM(95) 199 final, paragraphs 14 and 20.

(27) - Report from the Commission on the effect of the structural improvement measures in inland waterway transport, as introduced by Council Regulation (EEC) No 1101/89 of 27 April 1989, COM(93) 553 final.

(28) - See note 18.

(29) - Cited in note 27.

(30) - See the second recital in the preamble to Regulation No 2819/95, cited in note 1.

(31) - See, on a similar issue in relation to the ECSC Treaty, the Opinion of Advocate General Capotorti in Joined Cases 154/78, 205/78, 206/78, 226/78 to 228/78, 263/78 and 264/78, 39/79, 31/79, 83/79 and 85/79 Valsabbia v Commission [1980] ECR 907, at paragraph 5 of the Opinion.

(32) - See, for example, Joined Cases 15/76 and 16/76 France v Commission [1979] ECR 321, paragraph 7 of the judgment.

(33) - Article 10, first paragraph.

(34) - Cited in note 1.

(35) - Cited in note 1.

(36) - See the second recital in the preamble to Regulation No 2819/95.

(37) - First and second recitals of the Council regulation.

(38) - Article 8(1).

(39) - See Opinion 2/94 [1996] ECR I-1759, paragraphs 32 and 33, and my Opinion in Case C-84/95 Bosphorus v Minister for Transport, Energy and Communications, Ireland and the Attorney General [1996] ECR I-3953, paragraphs 51 and 52.

(40) - Case C-280/93 Germany v Council [1994] ECR I-4973, paragraph 78 of the judgment; Case C-84/95 Bosphorus, cited in note 39, paragraph 21.