3.

In its reply the Board has specified that its application is an action for damages pursuant to the second paragraph of Article 215 of the EEC Treaty. That relieves me from having to express my opinion upon the objection of inadmissibility put forward by the Commission and based on the assumption that the application was an action for failure to act under Article 175 of the EEC Treaty. The principles which govern the liability of Community institutions have been stated several times by the Court. For liability to arise, the Court has said, it is necessary to demonstrate “the unlawfulness of the acts alleged against the institution, the fact of damage, and the existence of a direct link in the chain of causality between the wrongful act and the damage complained of” (see, most recently, the judgment of 4 March 1980 in Case 49/79 Pool v Council, [1980] ECR 569, at paragraph 7 of the decision). The Board states that the damage is in re because it had a legitimate expectation of drawing the sums advanced. Its argument that the Commission's conduct is illegal is more complex. Its representative claims that the Commission has no discretion in approving requests for grants submitted to it by Member States; therefore it may be said that, when it does so, it accepts them without reservation and that the projects which the States submit to it become an integral part of the Commission's decisions. The decision of 17 December 1973 should be read in that light; it will be clear that the observations made by Community officials regarding the operations carried out by the Board are not reasoned. In fact the Board scrupulously observed the procedures for the project which the Italian Government had annexed to its request. It was, on the other hand, the Commission which, having approved that request, acted unlawfully when it exploited those observations to reduce the allocation which had been provided for. That contention appears to me to be fundamentally ill founded. In the first place it is not true that the Commission has no discretion in accepting the requests of Member States. The contrary is true and for proof of that it suffices to refer to the rules governing intervention by the Fund. As we have seen, in fact, they grant it a series of powers: to check whether the intervention requested falls within the areas which the Council reserves to the competence of the Fund; to evaluate its compatibility with the economic and social objectives of the EEC; to accept in whole or in part the States' requests; to specify the conditions under which the contribution is granted. In this case, there is no doubt that the Italian request was only partially accepted, since the Commission restricted the much wider category of persons contemplated in the request to “unemployed young persons from the Mezzogiorno”. Since the premise upon which the Board's reasoning is based falls, obviously all its corollaries fall. Thus, reference to the projects of the Member State are out of place because the frame of reference for any appraisal of the procedures and the content of the operations is, and can only be, the Community decision. Similarly, the comment that officials of the Commission “erroneously” assessed the activities carried out by the Board is baseless. On the contrary, the Board's contention in that second point is expressly contradicted by a precise legislative provision. Article 5 (2) of the aforementioned Regulation No 858/72, governing the Commission's power to carry out checks, provides that servants authorized to make investigations on the spot may check: “(a) that the administrative practices conform to Community rules; (b) that the necessary supporting documents exist and tally with the operations financed by the Fund; (c) the manner in which the operations ... are carried out and supervised”. The same regulation provides that the Commission may suspend payment of contributions if a check reveals either irregularities or an essential change in the nature or the details of an operation (Article 4 (3)). It has been proved that the difference between the sum estimated and that effectively paid to the Board arises solely from the differences encountered in the course of the check to which I have frequently referred. The Board is solely responsible for those differences. The allegations of unlawful conduct which it makes against the Commission are therefore unjustified.