CELEX: 61982CC0031
Language: en
Date: 1983-11-17
Title: Opinion of Mr Advocate General VerLoren van Themaat delivered on 17 November 1983. # Metallurgiki Halyps AE v Commission of the European Communities. # Production quotas for rolled products. # Joined cases 31/82, 138/82 and 204/82.

OPINION OF MR ADVOCATE GENERAL
      VERLOREN VAN THEMAAT
      DELIVERED ON 17 NOVEMBER 1983 (
            1
         )
      
         Mr President
      
      
         Members of the Court,
      
      1. Introduction
      
               1.1.
            
            
               In these joined cases the applicant has put forward a large number of submissions to support its applications for a declaration that the contested decisions are void. By those decisions the Commission fixed its reference production and production quotas for concrete reinforcing bars for the fourth quarter of 1981 and the first, second and third quarters of 1982, and for wire rod for the third quarter of 1982. It also fixed the part of those quotas which could be disposed of within the common market.
               However, only two of those many submissions need be considered, namely (according to my numbering, to be explained below):
               
                        —
                     
                     
                        
                           ne fifth submission — the alleged discrimination between “single-product” and “multi-product” undertakings, which is said to constitute an infringement of Articles 58 and 4 of the ECSC Treaty. That submission is pleaded as an objection of illegality in relation to Decision 1831/81/ECSC.
                        However, this alleged discrimination is argued differently and involves different consequences from the submissions which are at first sight similar in Joined Cases 140, 146, 221 and 226/82 (Walzstahlvereinigtmg and Tyssen AG v Commission), on which I shall deliver my opinion on 22 November. In that connection I consider it helpful to point out at once that those differences in arguments are fundamental. Walzstahl-Vereinigung and Thyssen regarded the different criteria used to fix the quotas for concrete reinforcing bars for “single-product” undertakings and “multi-product” undertakings (referred to by the Commission as “integrated undertakings”) as discrimination. In these cases, however, the applicant's quotas for concrete reinforcing bars are said to be discriminatory because they are lower than the restriction on the total production of multi-product undertakings. Thus these cases, despite appearances, are not identical to the other cases cited above.
                     
                  
                        —
                     
                     
                        
                           The sixth submission — the alleged infringement of Article 14a of Decision 1831/81. According to this submission, the individual decisions by which the applicant's quotas were fixed are incompatible with the special hardship clause contained in Article 14a for steel undertakings established in Greece.
                     
                  Before examining those two submissions, I shall first indicate what other submissions were also adduced and the reasons why they need no longer be taken into account. Those reasons are naturally of importance to the judgment of the Court.
               Those other submissions are the following :
               
                        (1)
                     
                     
                        Infringement of the Act of Accession (all three applications) ;
                     
                  
                        (2)
                     
                     
                        Infringement of Article 58, in conjunction with Articles 1 to 5, of the ECSC Treaty (all three applications) ;
                     
                  
                        (3)
                     
                     
                        Misuse of powers (Cases 31, 182 and 138/82);
                     
                  
                        (4)
                     
                     
                        Infringement of essential procedural requirements (Case 31/82).
                     
                  It appears from the applicant's rejoinders in Cases 138/82 and 31/82 that the third and fourth submissions have been withdrawn.
               It is stated in the applications themselves that the first submission is identical to one of the submissions pleaded in Case 258/81, in which the Court gave judgment on 9 December 1982(Metallurgiki Halyps v Commission [1982] ECR 4261) In that judgment the submission in question was dismissed on the grounds set out in paragraphs 3 to 9 of the decision, so that I need only refer to those paragraphs as justification for a similar decision in these cases. I may also cite paragraphs 5 to 15 of the Court's judgment of 16 February 1982 in Joined Cases 39, 43, 85 and 88/81 (Halyvourgikiv Commission [1982] ECR 593), in which similar arguments put forward in those cases were rejected.
               The second submission has likewise already been pleaded in Case 258/81 and rejected by the Court on the grounds set out in paragraphs 15 to 20 of the judgment in that case. However, as I have already pointed out, in the present applications that submission takes on a different meaning in relation to the alleged discrimination between “single-product” and “multi-product” undertakings, as a result of the subsequent insertion of Article 14b into Decision 1831/81.
               I have referred to this amended submission above as the fifth submission.
            
         
               1.2.
            
            
               As regards the relevant facts and legislative provisions and the course of the procedure, I refer to the Report for the Hearing.
            
         2. The alleged discrimination between “single-product” and “multi-product” undertakings
      The fifth submission, which I have abstracted from the submission relating to the infringement of Article 58, in conjunction with Articles 1 to 5, of the ECSC Treaty and which is put forward by the applicant for the first time in these proceedings, relates inter alia to Article 14b, which was inserted into Decision 1831/81 after Article 14a by Commission Decision 533/82/ECSC of 3 March 1982. Article 14b is also relevant to the abovementioned applications lodged by Walzstahl-Vereinigung and Thyssen. According to that new provision, for producers whose total production in 1981 did not exceed 700000 tonnes and whose production of Categories IV, V and VI accounted for at least 90% of their total production, the abatement rates in respect of Categoiy V (concrete reinforcing bars) for the purpose of establishing production and delivery quotas for the second quarter of 1982 were to be reduced by five percentage points if their production of concrete reinforcing bars represented as least 30% of production in Categories IV, V and VI in 1981. The new submission is thus to that extent relevant solely to the applications which relate to the second and third quarters of 1982. (
            2
         )
      However, the submission is based primarily on the more general standpoint (which relates to the earlier quarters referred to) that the fixing of uniform rates of abatement of the reference-production figures for the categories of steel affected by the crisis gives rise to discrimination between producers who produce various categories (hereinafter referred to as “multi-product undertakings”) and producers who produce only one or a few of the categories subject to the quota system (hereinafter referred to as “single-product undertakings”). It is argued that Decisions 1831/81 and 1696/82 established such uniform rates of abatement, in particular in relation to Categories I and IV and Categories V and VI. As those uniform abatement rates also apply to steel producers who at the same time produce other types of steel, which are not subject to the quota system or are subject to lower rates of abatement, there is alleged to be a clear case of unequal treatment. Thus for an undertaking producing exclusively products in Categories IV and V, the abatement of its total production amounts to between 40 and 50%. On the other hand, an undertaking which produces the six categories of steel will have to reduce its total production by considerably less. Thus it is argued, the general decisions cited clearly discriminate between producers and are therefore incompatible with Articles 58 and 4 of the Treaty. The applicant is a single-product undertaking, manufacturing products in Categories IV and V. Nor, according to the applicant, is that discrimination eliminated by the abovementioned Decisions 533/82 and 1698/82. The wholly arbitrary reduction of the abatement rate is not sufficient to reestablish equality of treatment in the sense indicated. Equality of treatment would be restored only if the total production of single-product undertakings and multi-product undertakings were to be reduced to the same extent. That is said to have been recognized by the Commission — indirectly but none the less clearly — in the preamble to Decision 1698/82.
      The Commission takes the view first that there can be no question of prohibited discrimination, if only because the applicant did not use up the production and delivery quotas allocated to it for the relevant quarters. However, I would point out first of all that that defence is not entirely convincing in relation to the fourth quarter of 1981, for which the applicant's quota was not finally fixed until a good month after the end of that quarter. It is therefore clear that, in planning its production for the fourth quarter, the applicant could not take account of those final quotas and was therefore certainly handicapped to some extent. However, as the applicant's submission does not relate to that delay in the notification of its quota, it is sufficient for the purposes of its complaint of discrimination to conclude on this point that that complaint cannot be rejected purely on the ground that the applicant did not use up its quotas. Also, on a more general level, it cannot be denied that the applicant has an interest in pursuing these actions. If these applications were to succeed, a large part of the production of concrete reinforcing bars would as a result be transferred from the multi-product undertakings to single-product undertakings and the failure to use up their quotas might thus be terminated.
      On the other hand, the Commission is in my view undoubtedly right in arguing that the unequal extent to which the crisis has affected the various categories of steel may, or indeed must, on account of the proportionality between the end and the means required by Article 58, lead to different rates of abatement in proportion to the seriousness of the crisis in the different sectors of the steel market. Thus the applicant's contentions on this point must be rejected. Moreover, according to the Commission, the level of the rates of abatement for small and medium-sized steel undertakings which comply with the specific criteria to which I have already referred was not fixed in an arbitrary manner and, in particular, contains no admission of unequal treatment to which those undertakings were subject even after the entry into force of those exceptional provisions. As regards that defence, it is in my opinion sufficient in this connection for me to state that the applicant's observations in relation to those exceptional provisions are clearly intended only to support its general contention that the reduction in total production for single-product undertakings should not turn out to be higher than for multi-product undertakings. From the agreement which I have just expressed with the standpoint of the Commission on that general contention, it automatically follows - that that argument by the applicant must also be rejected.
      In short, I must agree with the Commission's conclusion that the applicant has failed to prove the existence of any unequal treatment of undertakings in the same situation. However, so as not to anticipate the decision on the quite different questions raised in the Walzstahlvereinigung case, I would differ with the Commission as regards the further amplification of that conclusion.
      Undertakings which produce different categories of steel affected by the steel crisis in different degrees find themselves, in the light of the aims of Article 58 of the general scheme of the quota system, in an essentially different situation from that of single-product undertakings which only produce types of steel affected relatively severely by the crisis. Those single-product undertakings therefore cannot demand, on the basis of the prohibition of discrimination, that their total production should not be reduced by a higher proportion of their reference-production figures than the proportion by which the entire production of multi-product undertakings is reduced. Therefore the submission must be rejected.
      3. The alleged infringement of Article 14a of Decision 1831/81
      In Cases 31/82 and 138/82 the applicant also claims, in a separate submission, that the individual decisions contested by it are incompatible with Article 14a of Decision 1831/81, as amended by Decisions 1832/81 and 2804/81.
      That article provides as follows:
      “Where the Commission finds, following receipt of a request from an undertaking whose plants are located in Greece, that the production quota system is causing the undertaking concerned exceptional difficulties likely to prevent it from adapting to the structural developments in that country's economy, the Commission shall make an appropriate adjustment to the reference production figures for the undertalung and products in question.”
      The applicant considers that that article obliges the Commission always to fix the individual quotas for Greek steel undertakings in such a way that their production does not fall below the average rate of utilization of production capacity in the Community. In its view, that is also required by the principle of equal treatment. However, the average utilization rate in the Community steel industry in 1981 was 63%, whereas the contested decisions permitted the applicant a maximum of its capacity of only 54%.
      In its defence, the Commission rightly observed in relation to that submission, first, that Article 14a does not provide for a general exception applying to all Greek steel producers. It in fact provides only for the possibility of individual adjustments at the request of an individual undertaking, if the Commission finds in relation to that individual undertaking that the quota system causes it exceptional difficulties as defined in that article. It does not appear from the applications that the applicant lodged requests under Article 14a and that those were rejected. Had it done so, its application ought then to have been directed against those rejections.
      The Commission goes on to remark rightly that Decision 1831/81 does not employ the production capacity of undertakings as a criterion for the fixing of quotas. Article 14a also employs quite different criteria, which relate the possibility of adjustment in exceptional cases exclusively to the structural development of the Greek economy. Moreover, the Commission also rightly pointed out that in its previous judgments the Court has always recognized the criterion applied by the Commission, derived from actual production, as an equitable criterion within the meaning of Article 58 (2) of the ECSC Treaty. Therefore that submission must also be rejected.
      4. Conclusion
      On the basis of the analysis set out above, I conclude that:
      
               (1)
            
            
               The applications should be dismissed;
            
         
               (2)
            
            
               The applicant should be ordered to pay the costs.
            
         (
            1
         )	Translated from the Dutch.
      (
            2
         )	For the similar provision which applied in the third quarter, see Decision 1698/82/ECSC.