Case C-399/03: Action brought on 25 September 2003 by the Commission of the European Communities against the Council of the European Union
Date: 2003-11-15
Institutions: Court of Justice
Subjects: Belgium, European Commission, State aid, action for annulment (EU), business management, control of State aid

15.11.2003

EN

Official Journal of the European Union

C 275/35

If the directive applies,

is Annex I to the directive to be interpreted as meaning that
leaves of the vine are classified in the product group Leaf
vegetables and fresh herbs and Annex II as meaning that leaves
of the vine are classified under the point Herbs, Others?

In which product group and point are leaves of the vine to be
classified if they are not to be classified under the point Herbs,
Others?

(1) OJ L 350 of 14.12.1990, p. 71.

Action brought on 25 September 2003 by the Com-
mission of the European Communities against the Council
of the European Union

(Case C-399/03)

(2003/C 275/52)

An action against the Council of the European Union was
brought before the Court of Justice of the European Communi-
ties on 25 September 2003 by the Commission of the
European Communities, represented by G. Rozet and V. di
Bucci, acting as Agents, with an address for service in
Luxembourg.

The Commission of the European Communities claims that
the Court should:

1)

2)

annul Council Decision 2003/531/EC of 16 July 2003 (1),

order the defendant to pay the costs.

Pleas in law and main arguments

The Council Decision of 16 July 2003 authorised the granting
of aid identical to aid declared incompatible by the Com-
mission’s final negative decision of 17 February 2003. An
individual Council Decision on State aid is in principle
extraneous to the monitoring system established by the Treaty
and must be confined to exceptional situations.

The Council Decision is vitiated in several regards:

— Lack of competence of the Council: Only a body indepen-
dent of the States providing aid is in a position to
examine objectively and impartially the different national

measures. Thus it is for the Commission, as a general
rule, to monitor State aid. Certainly, the Council has a
decision-making power in the matter but it is an excep-
tional power which must be strictly interpreted.

— Misuse of powers and procedure: The power conferred
on the Council exceptionally to authorise State aid instead
of the Commission and, where proceedings are initiated,
subject to closely defined time-limits, was used in order
to neutralise the Commission’s Decision of 17 February
2003, that is to say to annul its effects, by authorising aid
identical to the aid declared incompatible. The contested
decision is also vitiated by a misuse of powers because it
was adopted in order to produce the same effects as an
annulment judgment by the Court of Justice.

— Infringement of the Treaty and of the general principles
of Community law. The contested decision not only
was adopted in breach of the third subparagraph of
Article 88(2) EC but also disturbs the institutional
equilibrium established by the Treaty as between the
Commission and the Council. That equilibrium entails
observance by the other institutions, in particular the
Council, of the Commission’s sphere of competence. That
means that, except in the case of an express derogatory
the Council may not impinge on the Com-
power,
mission’s sphere of competence. However, in the present
case, the Council acted ultra vires. The procedure at issue
also disturbs the equilibrium between the ‘executive’
institutions and the Community judicature and, in general
terms, jeopardises the adjudication system established by
the Treaty. Finally, the Council Decision infringes the
substantive law in the matter of State aid and Council
Directive 69/335/EEC, as well as the obligation in that
regard to provide a statement of reasons.

— In the alternative, manifest error of assessment and
misuse of powers as to the existence of exceptional
circumstances. The Council manifestly erred in its assess-
ment in particular by deeming exceptional circumstances
to exist owing to the fact that Belgium did not have the
time necessary to put in place measures different from
those declared incompatible with the common market by
the Commission Decision of 17 February 2003 in favour
of coordination centres established in its territory.

(1) Council Decision 2003/531/EC of 16 July 2003 on the granting
of aid by the Belgian Government to certain coordination centres
in Belgium (OJ 2003 L 184, p. 17).