2.

I shall now turn to the question whether, during the period in question, the requirements laid down in Regulation No 974/71 were still fulfilled. In this connexion of course the second subparagraph of Article 1 (2) of the above-mentioned regulation in the version contained in Regulation No 2746/72 must be considered, according to which: ‘Paragraph 1 shall not apply where application of the monetary measures referred to in that paragraph would lead to disturbances in trade in agricultural products’, and not the technical monetary requirements, about which there is no dispute. I shall first recall in this connexion certain decisions from the case-law of this Court. In the judgment in Case 5/73 (Balkan-Import-Export GmbH v Hauptzollamt Berlin-Packhof, judgment of 24 October 1973 [1973] ECR 1091) the Court pointed out that the compensatory amounts were intended to preserve the normal flow of trade, a concept which is expressed in the judgment in Case 55/75 (Balkan-Import-Export GmbH v Hauptzollamt Berlin-Packhof, judgment of 22 January. 1976 [1976] ECR 19) by the statement that it is necessary to take into consideration the effect of monetary measures on trade between the Member States. In the judgment in Joined Cases 67 to 85/75 (Lesieur Cotelle et Associés SA and Others v Commision of the European Communities, judgment of 17 March 1976 [1976] ECR 391) it was emphasized that the establishment of the system of monetary compensatory amounts was motivated by concern that monetary measures might create distortions in trade, and in the judgment in Case 74/74 (Comptoir National Technique Agricole (CNTA) S.A. v Commission of the European Communities, judgment of 14 May 1975 [1975] ECR 533) it was pointed out that the compensatory amounts are intended to protect the level of prices in the Member State in question. However it is above all important that in several judgments (Case 74/74, Case 55/75 and, finally, Case 29/77) it has been emphasized that the Commission has a wide discretion in the evaluation of the problem of disturbances, and that for this reason the Court may only examine whether there has been a manifest error or misuse of powers or a clear abuse of powers. In this connexion, the latter judgment states further that the possibilities of disturbances are numerous and diverse; in this respect the Commission must take into consideration the market conditions and may find a risk of disturbance merely on the basis of an appreciable fall in the rate of exchange. It is necessary to adhere to these findings when examining in the present case whether the requirements laid down in Regulation No 974/71 are fulfilled. The plaintiff in the main action expresses doubts as to whether those requirements are fulfilled as far as the market in wine in the Federal Republic of Germany is concerned, above all by referring to the small scale of German production of table wine, in particular red wine, which is of prime importance in its imports, and claims that it is a totally insignificant market, in particular in comparison with the imports. Moreover, the plaintiff emphasizes that, as a result of the compensatory amounts, German wine has increased its share of the market and that the share of foreign wines has decreased. In addition, it takes the view — and this refers to the case-law mentioned above — that the Commission does not in any case have a wide discretion when only one product and the special rules on compensatory amounts relating thereto for a single Member State and the ascertainment of the facts is concerned. This submission, and I must say this at once, is in my opinion insufficient to prove a wrongful application of the system of monetary compensatory amounts. The plaintiff incorrectly contests in very principle that the Commission has a wide discretion in cases in which the application of the system is limited to a particular market. No such thing can be deduced from the case-law of this Court. This point of view is also unjustified since even the evaluation of a single market often represents an extraordinarily complex venture in particular in so far as essential prognoses on future developments are involved. In addition I must once more recall that the decisive regulation which is of interest in this case concerned not only compensatory amounts for wine but also the fixing of compensatory amounts for all products coming into consideration in this respect. However, after all the Court has heard, in particular after the submissions made by the Commission in the oral procedure, it is also difficult to state that there has been a manifest error so far as a risk of disturbance is concerned. It is certain that the plantiff's references to the small scale of the German market in table wine are insufficient. Even a small market can in fact be disturbed and then requires protection. In addition, according to the figures produced to this Court on the production of table wine in the Federal Republic of Germany — many harvests exceed one million hectolitres — it is necessary to acknowledge that this market is not, as the plaintiff considers, completely insignificant, quite apart from the fact that the effects on the market in quality wines could be taken into consideration because in this connexion there are no rigid divisions and therefore it is impossible to speak of completely separate markets. In the same way it is insufficient for the plaintiff to state with regard to the actual development of the German market that the share of sales of German wine on the domestic market increased from 67 % in 1973 to 75 % in 1975 whilst the share of foreign wines fell from 33 % to 25 % during this period. In my opinion these changes do not justify the finding that all compensatory amounts, which were 12 % in the period in question, could have been dispensed with. In addition, the prognosis reasonably made at the date on which the compensatory amounts were fixed, in other words, solely the question whether at that time it was possible seriously to fear disturbances in the market, is decisive, and not of course a retrospective examination. It results from the statements made by the Commission, particularly in the oral procedure, that there was every reason in the autumn of 1975 for the retention of the compensatory amounts in the Federal Republic of Germany. Thus the Court was told, and this is of fundamental interest, that the organization of the market in wine (Regulation No 816/70, Official Journal, English Special Edition 1970 (I), p. 234) is characterized by a relatively weak intervention system. It applies only to table wine, in other words wine which does not correspond to the requirements for quality wines, and if the market price falls to below a certain level it consists in the adoption of distillation measures, not, it is true, for large quantities, or in the grant of aids for private storage which naturally does not finally take the wine off the market but only postpones its sale. It is also important that in the case of table wine, a considerable proportion of which is used let us say ‘industrially’, there is relatively great international convertibility and that precisely this market is considerably more liable to disturbances from imports than the market in quality wines. Against this background an important factor, and with this I come to the actual market data, is that at the beginning of 1975 there were large stocks of table wines in Italy and France and that in particular they gave rise to very substantial exports from Italy to France which led to the levying in that country of an import charge which is the subject-matter of another case. On the other hand, the Commission speaks of sales difficulties which existed at that time on the German market too. The Commission considers that the relatively high proportion of table wine in the previous vintage was partly the cause but that the considerable pressure of imports from France and Italy was also a contributory factor. The favourable production conditions, in particular in Italy, had enabled the wine to be sold at a price which covered costs even at lower prices and in addition the fall in the rate of exchange of the lira had given an incentive to increase exports. In view of these facts it is really impossible to state that the Commission committed a manifest error in the evaluation of the problem of disturbances and wrongly fixed monetary compensatory amounts for the German market in wine. However at the same time it is certain that the system of compensatory amounts cannot be regarded as being aimed at the grant of additional protection and for that reason it is not therefore incompatible with the prohibition against the levying of charges having an effect equivalent to customs duties.