ARTICLES 4 , 7 AND 10 OF THE REGULATION REQUIRE THE MEMBER STATES CONCERNED TO RECOGNIZE THE PRODUCER GROUPS WHICH FULFIL THE CONDITIONS SET OUT IN THE REGULATION , TO VERIFY WHETHER THOSE CONDITIONS CONTINUE TO BE MET AND , FINALLY , TO GRANT AID TO RECOGNIZED GROUPS TO ENCOURAGE THEIR FORMATION AND TO FACILITATE THEIR ADMINISTRATION . THAT AID IS CHARGEABLE TO THE GUIDANCE SECTION OF THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND ( EAGGF ).
3 ITALIAN LAW NO 674 OF 20 OCTOBER 1978 LAYING DOWN PROVISIONS ON AGRICULTURAL PRODUCER GROUPS ( GAZZETTA UFFICIALE DELLA REPUBBLICA ITALIANA NO 311 , P . 8011 ) IS INTENDED TO ADAPT ITALIAN LEGISLATION TO THE COMMUNITY REGULATION . HOWEVER , IN VIEW OF THE FACT THAT UNDER THE ITALIAN CONSTITUTIONAL SYSTEM , CONSIDERABLE POWERS IN AGRICULTURAL MATTERS ARE VESTED IN 19 REGIONS AND IN THE TWO AUTONOMOUS PROVINCES OF TRENTINO AND BOLZANO , THE FIRST PARAGRAPH OF ARTICLE 2 OF LAW NO 674 STIPULATES THAT THE REGIONS AND THE TWO AUTONOMOUS PROVINCES ARE TO ADOPT THE NECESSARY MEASURES , IN PARTICULAR AS REGARDS THE RULES AND PROCEDURES FOR RECOGNIZING PRODUCER GROUPS ; THOSE MEASURES MUST TAKE ACCOUNT OF THE PROVISIONS OF REGULATION NO 1360/78 AND THE PROVISIONS OF LAW NO 674 . THE SECOND PARAGRAPH OF ARTICLE 2 OF LAW NO 674 PROVIDES THAT , FOR THE PURPOSES OF THEIR OPERATION AND TO ENSURE COMPLIANCE WITH THE COMMUNITY REGULATION , THE STATUTES OF PRODUCER GROUPS MUST CONTAIN , INTER ALIA , CERTAIN DETAILED RULES SET OUT IN POINTS 1 TO 10 OF THAT PARAGRAPH .
4 THE COMMISSION CONTENDS THAT THE ITALIAN REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS BY
( I ) LAYING DOWN IN LAW NO 674 AND ITS REGIONAL IMPLEMENTING LEGISLATION CONDITIONS FOR GRANTING AND WITHDRAWING RECOGNITION OF PRODUCER GROUPS DIFFERENT FROM THOSE LAID DOWN IN REGULATION NO 1360/78 ;
( II)RETAINING IN ITS REGIONAL IMPLEMENTING LEGISLATION PROVISIONS CONCERNING MATTERS IN WHICH THE COMMUNITY HAS EXCLUSIVE COMPETENCE AS WELL AS PROVISIONS REPEATING COMMUNITY RULES ; AND
( III)FAILING TO ADOPT IN PART OF ITS TERRITORY THE SUPPLEMENTARY LEGISLATION NEEDED TO IMPLEMENT REGULATION NO 1360/78 .
5 THOSE THREE SEPARATE CONTENTIONS MUST BE EXAMINED IN TURN .
( A ) THE CONDITIONS FOR GRANTING AND WITHDRAWING RECOGNITION OF PRODUCER GROUPS
6 ON THE QUESTION OF THE GRANT OF RECOGNITION TO PRODUCER GROUPS , THE COMMISSION ARGUES THAT THE ITALIAN LEGISLATION LAYS DOWN CONDITIONS DIFFERENT IN TWO RESPECTS FROM THOSE CONTAINED IN THE COMMUNITY REGULATION . FIRST , POINT ( 4 ) OF THE SECOND PARAGRAPH OF ARTICLE 2 OF LAW NO 674 REQUIRES RECOGNIZED PRODUCER GROUPS TO ENGAGE IN COMMERCIAL ACTIVITIES AS REPRESENTATIVES OF THEIR MEMBERS WHEREAS UNDER REGULATION NO 1360/78 , PRODUCER GROUPS ARE AT LIBERTY TO TRADE ON THE MARKET THEMSELVES OR ON BEHALF OF AND FOR THE ACCOUNT OF THEIR MEMBERS . SECONDLY , POINT ( 8 ) OF THE SECOND PARAGRAPH OF ARTICLE 2 REQUIRES PRODUCER GROUPS TO PROMOTE THE FORMATION OF COOPERATIVES FOR THE