5.

The third question raised by the national court is more awkward. Since there is a provision of Community law governing the recovery by the Member States of sums lost as a result of “irregularities or negligence” (Article 8 of Regulation No 729/70), the national court wishes to ascertain whether the Member States have any discretion in the matter. Accordingly, it is necessary to determine the extent to which national rules of administrative law concerning recovery of sums unduly paid by the administration may be applied in cases where premiums for the denaturing of wheat and rye of bread-making quality have been irregularly paid to undertakings by the competent intervention agencies. It is appropriate to cite once again the text of Article 8 which forms part of the body of rules on the common agricultural policy. It provides that: “The Member States in accordance with national provisions laid down by law, regulation or administrative action shall take the measures necessary to ... recover sums lost as a result of irregularities or negligence.” In the opinion of the undertakings which have effected denaturing, that provision leaves the Member State the power to determine, case by case, in the light of the provisions of national law applicable to recover), whether or not there is any justification for demanding repayment of sums unduly paid. Taking the opposite view, the Agent for the Commission and the representative of the government of the Federal Republic of Germany, an intervener in the proceedings, are of the opinion that the Member States are in all cases under an obligation to take action to recover premiums irregularly paid. In order to gain a better understanding of the position adopted by Counsel for the undertaking concerned, it should be recalled that the German legislation does not require the administration to revoke its own unlawful decisions or, therefore, to recover sums paid on the basis of those decisions but merely provides that an irregular decision may be revoked unless certain conditions are fulfilled which in substance reflect the need to protect a bona fide recipient of the premium (see Article 48 of the Law of 25 May 1976 codifying general principles already well-established in administrative practice and in legal decisions). If that criterion were applied in the cases at issue, the recipient undertakings would be able to avoid repaying the premiums obtained if the German administration were prepared to exercise its discretion in their favour and, in particular, if the existence were recognized of conditions which, in accordance with the abovementioned statutory provision, prevent recoven (for example, the lapse of a considerable period of time from the date of payment until the date on which the administration realizes that the payment in question was irregular). The provision of Community law on which the solution of the problem depends calls for careful consideration. It does indeed refer to “provisions laid down by law, regulation or administrative action”, the meaning of which is that the national measures envisaged must comply with the provisions in question. On the other hand, however, it clearly specifies the objectives which those measures pursue, in particular, “to recover sums lost as a result of irregularities or negligence”. Emphasis is laid on the achievement of that result. The Member States are required to adopt the measures needed for the recovery of sums lost. Accordingly the procedural and substantive provisions of national law governing recovery will be operative to the extent to which they enable certain measures to be taken and regulate the detailed rules involved, always on condition that they are consistent with the attainment of the objective pursued. That interpretation of Article 8 is also supported by the consideration that when the Member States proceed to recover premiums irregularly granted Oust as when they pay the premiums to the undertakings) they act on behalf of the Communities and administer Community funds. It is well-known that agricultural intervention measures are financed by the European Agricultural Guidance and Guarantee Fund and are accordingly charged to the Community budget (see in particular Articles 1, 3 and 4 of Regulation No 729/70 which, as we know, relates to the financing of the common agricultural policy). Against that background, it sunds to reason, in my opinion, that in administering resources which are not their own the States do not enjoy the same discretion as may be conferred upon them by their national rules with regard to the administration of their own funds. A national legal system may, for example, recognize that the public authorities are at liberty to decide whether or not to recover a loan from a trader by reference not only to the principle of the protection of legitimate expectation but also to other requirements of a general nature, such as the need to guarantee the level of employment or to prevent the insolvency of an undertaking. However, as far as the recovery of Community premiums is concerned, to confer such discretion on the national authorities would be incompatible with the general principle of equality which must also be observed with regard to the administration of Community funds. In that connection, it is appropriate to recall that the Court has had an opportunity to reaffirm the principle of equality with reference precisely to the administration of Community funds. In its judgment of 5 March 1980 in Case 265/78 Ferwerda [1980] ECR 617, it stated that financial advantages charged to the Community budget “must be so arranged and applied as to constitute a uniform burden or to confer uniform benefits on all persons who meet the conditions specified in the Community provisions on such burdens or advantages” (paragraph 8 of the decision). The guidelines thus laid down obviously affect the solution of the problem in question. An interpretation of Article 8 of Regulation No 729/70 based on the attribution to the Member States of a wide discretion to determine whether or not to demand repayment of the premium would be contrary to the principle given prominence in the Ferwerda judgment. To recognize that discretion would be to compromise the uniform application of the Community system of premiums and would thus give rise to differences in treatment between undertakings and to distortions of competition in the common market. Conversely, no purpose would be served in reliance on the principle repeatedly upheld by the Court that disputes relating to the repayment of aids granted under the common agricultural policy are within the jurisdiction of the national courts and must be resolved by them in accordance with national law. That principle applies only if there are no provisions of Community kw in the matter (see the following judgments: 21 Mav 1976 in Case 26/74, Roquette [1976] ECR 677; 5 March 1980 in Case 265/78, Ferwerda, previously cited; 12 June 1980 in Case 130/79, Express Dairy Foods [1980] ECR 1887; 12 June 1980 in Joined Cases 119 and 126/79, Lippische Hauptgenossenschaft [1980] ECR 1863). If, therefore, as in the present case a specific provision of Community law requires the Member States to recover premiums irregularly paid, recourse may no longer be had to the substantive rules of national legal systems as regards that aspect of the arrangements concerning premiums. Furthermore, the fact that in the absence of specific provisions of Community law there is no alternative but to resort to national law lies at the root of certain instances of unequal treatment to which I have pointed on other occasions. I have alreadv observed, in mv Opinion in Case 130/79 Express Dairy Foods [1980] ECR 1887 at p. 1910, on the subject of monetary compensatory amounts, that: “Making reference to national law to determine the detailed conditions for recovery of undue payment ... certainly does not represent the most fair or convenient solution” and I emphasized that effect had not yet been given to the general principle of equality between all Community traders in regard to the conditions of form and substance governing claims for recovery of undue payment. I expressed similar views in my Opinion in Joined Cases 119 and 126/79 Lippische Hauptgenossenschaft [1980] ECR 1863 at p. 1885. In that case, I acknowledged, in connection with the prescription of the right of national intervention agencies to demand repayment from recipients of premiums unlawfully granted, that the need to avoid differences in treatment between Community citizens was justified but I added that the requirement of equality was insufficient “to overcome the failure by the Community legislature to adopt a uniform rule in relation to prescription”. In this case, inequality in treatment would arise only if Article 8 were to be interpreted in a manner which I regard as incorrect. Finally, I would add that to adopt the interpretation of Article 8 which I have criticized, would be to acknowledge that the application of rules of national law may affect the scope of provisions of Community law. That possibility has quite properly been ruled out by the Court of Justice. In its judgment of 28 June 1977 in Case 118/76 Balkan [1977] ECR 1177, in connection with the distribution of functions between the Community and the Member States in relation to the levying of monetary compensatory amounts, the Court stated that a national authority might not apply a provision of national law “in so far as its effect would be to modify the scope of the provisions of Community law”; that is to say, if its application would alter the effectiveness of the rules of Community law (see in particular paragraph 5 of the decision). All the arguments which I have so far propounded show exhaustively, in my opinion, that Article 8 must be construed to the effect that it imposes on the Member Sutes an obligation to take action in all cases to recover premiums unduly paid. Of course, that does not mean that the obligation in question, which owes its existence to a provision of Community law, may not in individual cases be qualified by certain principles recognized by the Community legal order itself, which are moreover common to all the Member States. The principles which I have in mind are those of legal certainty, protection of legitimate expectation and proportionality. That subject, which is outside the scope of this dispute, was recently discussed by Mr Advocate General VerLoren van Themaat in the Opinion delivered by him on 21 Januarv 1982 in Case 54/81 Fromme [1982] ĖCR. He expressed the view that it was necessary to take into account the principle of proportionality in the interpretation of any extension of the duty on the part of the Member States to recover premiums irregularly granted.