CELEX: 61964CC0037
Language: en
Date: 1965-04-01
Title: Opinion of Mr Advocate General Roemer delivered on 1 April 1965. # Mannesmann AG v High Authority of the ECSC. # Case 37-64.

OPINION OF MR ADVOCATE-GENERAL ROEMER
      DELIVERED ON 1 APRIL 1965 (
            1
         )
      Index
       
               
                  Facts
               
             
               
                  Legal consideration
               
             
               
                  I — The currency problem
               
             
               
                  1. Is the contested decision covered by Decision No 21/60?
               
             
               
                  2. Was the assent of the Council necessary for the adoption of Decision No 21/60?
               
             
               
                  3. Inadequacy of the statement of reasons
               
             
               
                  4. Infringement of the Treaty, infringement of the prohibition against discrimination
               
             
               
                  5. Violation of the principle that taxation must not be retroactive
               
             
               
                  6. Inadmissible interference in the monetary sovereignty of the Federal Republic of Germany
               
             
               
                  II — The arrangements with regard to interest under Decision No 7/61
               
             
               
                  1. Was the assent of the Council necessary for the adoption of Decision No 7/61?
               
             
               
                  2. Inadequacy of the statement of reasons
               
             
               
                  3. Infringement of the Treaty
               
             
               
                  (a) Are the arrangements with regard to interest in Decision No 7/61 discriminatory?
               
             
               
                  (b) Other objections relating to the legality of the new arrangements with regard to interest
               
             
               
                  III — Summary and conclusion
               
            
         Mr President,
      
         Members of the Court,
      The proceedings in which I give my opinion today originated in a notice to pay sent to the Mannesmann Company by the High Authority which is intended to be a further step towards the liquidation of the scheme for the equalization of ferrous scrap.
      Immediately after what is for the time being the last general decision relating to the equalization of scrap (Decision No 7/63) the Mannesmann company—like many other undertakings—received from the High Authority a letter of 8 April 1963, which contained a statement of its credits and debits in relation to the Equalization Fund as at 31 May 1963. This letter set out in detail:
      
               1.
            
            
               The allowances, bonuses and interest due to the undertaking by way of equalization payments;
            
         
               2.
            
            
               The contribution (excluding interest) payable by Mannesmann; and
            
         
               3.
            
            
               Payments already made by the equalization scheme to Mannesmann and by Mannesmann to the equalization scheme.
            
         This resulted altogether in an initial debit balance due from Mannesmann, expressed in EMA units of account, which were converted at a parity of 4.20 German marks (which I shall now refer to as ‘DM’) per unit of account (which I shall abbreviate to ‘u.a.’). The statement of account also included a call for payment of its share of outstanding interest and a statement of the interest credited to it in respect of contributions which it had paid, resulting altogether in a second debit balance due from Mannesmann, which was also expressed in u.a. and converted into DM on the basis of a parity of DM 4.20 per u.a.
      On 20 April 1964 the Mannesmann company made a specific payment in partial reduction of the first debt, but left the balance outstanding on the ground that its debt expressed in u.a. should not have been converted on the basis of the parity applied by the High Authority but at the parity in force on the day of payment (and after the revaluation of the DM on 6 May 1961) of DM 4.00 per u.a. Similarly, the second debit balance remained unpaid on the ground that the rules for charging interest used for its calculation, and contained in Decision No 7/61, were illegal.
      Whereupon the High Authority issued a formal decision dated 8 July 1964 demanding payment of the said balances (DM 4906959.66 by way of interest and DM 865704.86 being the amount arising out of the application of the earlier DM parity).
      This case is concerned with the legality of this decision. As must be expected from the submission of the applicant during the administrative procedure, the case raises two categories of problems: the legality of the DM parity adopted by the High Authority and the legality of the arrangements with regard to interest introduced by the High Authority in its Decision No 7/61. The parties have presented their detailed arguments orally and in writing on these two difficult questions which can by no means be easily resolved.
      If I now proceed at this stage to give my opinion, it seems to me to be appropriate to do so without making a preliminary statement on the currency and interest problems. I will rather turn immediately to (the individual arguments as they were submitted to the Court. Under this plan for dividing the arguments into categories the nature of the problem to be resolved ensures that the importance to be attached to any argument and the scope of the legal examination will correspond to the relative importance of the various submissions.
      I — The currency problem
      The preliminary observation has to be made under this head that the applicant only complains that the amount of its debt by way of contributions, which can only be definitively expressed in u.a., has been converted on the basis of an incorrect parity, that is to say, one no longer in force since the revaluation of the DM. Unlike the similar problems raised in the Lemmerz-Werke case, there is no separate complaint concerning the way in which the double devaluation of the franc during the operation of the equalization scheme was dealt with and the effect which it had on the applicant's liability to pay contributions; this event on the contrary is only relevant to part of the whole argument, in particular in support of the complaint of discrimination put forward by the applicant. It is in this sense that I have understood the applicant's express statement in the pleadings and such an interpretation destroys the basis of the objection originally raised by the High Authority that the applicant, by making unconditional payments, forfeited the right to dispute the amount of contribution which it was liable to pay by reason of the way in which the devaluation of the franc was dealt with.
      First complaint: The contested individual decision is not covered by Decision No 21/60 to which it refers
      
      It is quite clear from its wording that the decision of 8 July 1964 expressly relies on Decision No 21/60 to justify the DM parity which it applies. In the opinion of the applicant this is wrong, because the main purpose of Decision No 21/60 was the solution of the problems arising under the equalization scheme connected with the double devaluation of the franc. The currencies of the other Member States and their relation to u.a. were only mentioned by reference, because so far as they were concerned no change had occurred until then. To that extent the applicant's view is that there must be read into Decision No 21/60 an additional provision that the determination of the currency parities for the other Member States is only valid as long as the official parity does not change.
      This view is not in my opinion correct. On the contrary we must accept the High Authority's view that the object of Decision No 21/60 was to make it dear that the DM parity specified is conclusively determinative for equalization, even if the Federal Republic of Germany changes the parity at a later date. — On this point reference should be made on the one hand to the wording of Article 2 which is in quite general terms and not subject to any reservations and reads:
      ‘The amounts specified in accordance with Article 1 in units of account in the statements of account which are:
      
               (a)
            
            
               to be credited to the undertakings—
               
                        —
                     
                     
                        in the Federal Republic of Germany,
                        … and
                     
                  
         
               (b)
            
            
               payable by the undertakings mentioned under (a), shall be converted into national currencies at the parity of DM 4.20 — … per EMA unit of account.’
            
         On the other hand, certain recitals can be found in the statement of the reasons upon which the decision is based, which, when carefully interpreted, are shown to have an effect going beyond the French devaluation and throw light on the fundamental attitude of the High Authority to future parity changes, that is to say, to parity changes which occur after liabilities and claims under the equalization scheme have arisen.
      
      For example I have in mind recital 4, which emphasizes that the parity of the DM etc. has not changed during the operation of the equalization scheme and that therefore the equalization statements of account could be continued in the Federal Republic of Germany etc. in u.a. This makes it clear that in the view of the High Authority only a change in parity during the continuance of the equalization scheme can have any effect. Mention must also be made of recital 8, which places special emphasis on the fact that it is the object of the equalization scheme not to allow the conversion into national currency to result in a disadvantage or unjustified benefit for some undertakings, a recital to which reference will be made again when I deal with the question of discrimination, that is to say, in the main part of the examination. Finally, reference must be made to recital 11 which reads: ‘In order to ensure that the same charges are imposed on all undertakings and to treat on the same footing the final prices—including equalization contributions—of scrap admitted to equalization and of scrap bought inside the Common Market, admitted to equalization, and received during the same month, it is necessary when calculating the amounts payable by French undertakings to apply the same parity by reference to the u.a. as is applied when converting the corresponding equalization price into French francs.’ In my opinion this recital, too, has a general effect extending beyond the devaluation of the franc, that is to say, it exemplifies the fundamental attitude of the High Authority to changes of parities, which affect equalization.
      All these facts looked at as a whole make it possible to arrive at an accurate interpretation of the scope of Article 2 of Decision No 21/60 and convince me that this provision could undoubtedly provide a legal basis—whether legitimate or not need not be discussed at this stage—for the issue of the disputed notice to pay. This method of presenting my conclusions opens the way to further examination of the issues. We must ascertain whether Decision No 21/60 can be justly criticized by means of the objection of illegality. This is the aim of the
      Second complaint: that the statements in Decision No 21/60 relating to currency policy are illegal in the absence of the assent of the Council of Ministers
      
      The applicant is of the opinion that according to Article 53 of the Treaty the unanimous assent of the Council of Ministers is not only necessary for the making of financial arrangements but also if the object and functioning of financial arrangements have to be altered. This occurred when Decision No 21/60 was taken, because the rules contained in it affect the amount of the contributions payable by undertakings, in other words the apportionment of the charges arising out of the equalization scheme.
      I should like to mention in this connexion that like the applicant I hold in principle that, in order to have due regard for the powers of the Council of Ministers, a strict interpretation of Article 53 is necessary. On this point I consider as determinative the unusual requirement of unanimous assent, which shows how essential the cooperation of the Council is regarded as being in this field, and also a comparison with Article 53 (a) which lays down that the Consultative Committee and the Council of Ministers must be consulted before voluntary general financial arrangements are approved, and indeed—and this is how the text must be interpreted—on the conditions which the High Authority lays down for the functioning of the common arrangements. It follows that the assent of the Council of Ministers is not only required for the measure establishing the equalization scheme, that is, for the determination of its basic principles, but also for all the essential details which relate to its operation. We should adhere to this interpretation based on the text and on the meaning of Article 53 when we examine the application of the scheme to each case and not on the other hand attach any importance to the question whether Member States have neglected to complain against measures of the High Authority which require the assent of the Council of Ministers but have been issued without such assent.
      So tar as equalization of scrap is concerned, the alteration of its original structure is to be found in the fact that the High Authority during the liquidation of the scheme attempted to graft on to it in an effective way a measure changing a currency parity issued by a Member State together with its effect on existing claims and debts, that is to say, to deal with a governmental measure which according to the view adopted may lead to a reduction of the nominal value of claims and debts expressed in DM. The original decisions relating to the equalization scheme do not deal with this situation, which certainly comes as no surprise, because in 1954 and at a later date a revaluation of the DM was not anticipated. From a purely formal point of view it can therefore be said that there were lacunae in the basic decisions on the equalization of scrap which needed to be filled. They certainly do not mention anything about the assent of the Council of Ministers being required for the remedying of these omissions. Whether such assent is necessary must depend upon the substantive content of the original rules interpreted in a comprehensive and appropriate way. The view is for example tenable that certain principles and objectives of the equalization scheme were so clearly laid down from the beginning that on the strength of them the later adoption of independent measures by Member States having an impact on the administration of the equalization scheme appeared to be perfectly possible. In such circumstances we are not faced with a substantive alteration but with a formal supplementary amendment of the scheme, for which the assent of the Council of Ministers is not necessary, because all the criteria with which the supplementary amendments of the scheme must comply have already been established in the basic decisions.
      How this view applies to this case must not however be considered now but only during the main examination of the decisions taken by the High Authority. I will postpone until then the question whether Decision No 21/60 is illegal on the ground of infringement by the High Authority of rules governing its competence, that is to say, on the ground of its failure to Obtain the cooperation of the Council of Ministers Instead I will deal with the
      Third complaint: that the statement of the reasons upon which Decision No 21/60 is based is inadequate
      
      In the opinion or the applicant this is the case so far as the fixing of the DM parity is concerned, because all the principal recitals of the decisions refer to the devaluation of the French franc. Further the statement of the reasons upon which the decision is (based discloses a logical fallacy which renders it defective.
      The arguments already put forward on the question whether Decision No 21/60 covers the contested decision deal with the essential points in the first part of this complaint. Indeed it cannot be denied that the statement of the reasons upon which the decision is based is primarily focused on the consequences of the devaluation of the French franc. But it must also be noted that the High Authority in this decision proceeded on the basis of certain principles which must be deemed to be of general application, in particular with regard to the way in which it dealt with the question of the effect the change in the currency parity of a Member State has on existing debits and credits, which is the only question of interest in considering the revaluation of the DM after (the termination of the equalization scheme. I refer in this connexion to the recitals already quoted and confirm that there can be no question of the statement of reasons being inadequate.
      But with regard to the alleged logical fallacy contained in the recitals of the decision I am unable to share the applicant's view. On this point I do not take into account the fact that there is the danger that the submission of such a complaint as a formal objection could easily lead in the end to the examination of a substantive issue, in this case the interpretation of the essential nature of the equalization scheme, if the fallacy in question is not apparent. According to the applicant the mistake in the reasoning of the High Authority consists in the belief that it could only achieve equality of treatment for buyers of imported scrap and buyers of Community scrap by the method which it adopted to deal with the question of parities. This assumption might contain an error in reasoning, if we overlook the fact that both categories of buyers are charged with payments of equalization contributions and the fact that the High Authority intended to provide for equality of treatment of those undertakings liable to pay contributions which discharged their financial obligations at the same time, because in such circumstances it makes no difference whether the parity at the date when the debt rose or at the date of liquidation of the debt is taken. It can however be assumed that the High Authority considered this question in a wider context so as to include in particular payments by undertakings liable to pay contributions at different times with reference to the change of parities. Looked at in this way the reference to the principle of equality of treatment in its decision is completely valid. Taking every factor into consideration—at this stage there is nothing more to say on this issue—the statement of reasons upon which general Decision No 21/60 is based is therefore adequate having regard to the requirements of Community law.
      Fourth complaint: Infringement of the Treaty, infringement of the prohibition on discrimination
      
      So far as the currency questions are concerned I now have to deal with the most important complaint in this case, a complaint which raises under several aspects the question whether the High Authority incorporated the revaluation of the DM in the liquidation of the scheme for the equalization of imported scrap in the correct way.
      I should like you to permit me to repeat first the applicant's argument: it takes the view that the contribution liabilities arise in u.a. because the entire expenditure of the Fund, which the undertakings must defray, is expressed in u.a. When for the purpose of payment the contributions have to be converted into national currencies, the parity in force at the date of payment or at the date of issue of an enforceable decision, and not at the date when the liability to pay contributions for any reason arose, must be applied.
      The first thing to stress in this connexion is that the actual practice adopted by the Fund in Brussels and by its regional offices and by the High Authority in drawing up the notices to pay is of little value for the solution of our problem. The only determining factor is which body of rules according to the basic principle of the equalization scheme proves to be legally correct. It must also be emphasized that the few examples given to us, in which the contributions, were expressed in u.a. and the debtors were called upon to pay the equivalent in national currencies according to the parity at the date of payment, are obviously without exception taken from the period before the revaluation of the DM, that is to say, from the period when German debtors were not faced with any currency problems. Finally the applicant has also not refuted the High Authority's claim that in the vast majority of cases the Brussels agencies and their auxiliary branches in fact stated the liabilities for contribution and demanded their payment in national currency. It can then be established that the u.a. used for the equalization of scrap is neither a currency nor an incorporeal monetary unit, as the applicant in another case assumed.
      We know that the u.a. came into being in the European Monetary Agreement of 5 August 1955 and that under this agreement it is assigned the task of contributing to the stabilization of the scheme for the equalization of the payments and claims between Member States having different currencies, that is to say, its task is to make possible a system of accounting and the keeping of common accounts within this system (Articles 1, 8 and 24 of the Agreement).
      As the High Authority and the Community do not enjoy sovereign powers in monetary matters (these are not transferred to them, but remain vested in the Member States), the Community organs could not make the u.a. a currency in the technical sense. It is rather to be assumed that they made use of it for the limited function intended for it by the authors of the monetary agreement. On the other hand, no special explanation is necessary to show that according to its meaning and purpose the scheme for the equalization of scrap depends upon such an accounting instrument, which provides a common reference for the amounts involved and the basis for keeping the accounts. For the purpose of reducing the prices for imported scrap the average price of scrap bought within the Community, that is to say, scrap bought and paid for in different countries and in different currencies, had to be determined. Similarly it was necessary to prepare an account of all the additional expenditure also incurred in the national currencies of Member States or third countries arising out of the importation of scrap, so that it could be apportioned equally among all consumers of scrap. For both transactions the u.a. served as the common denominator, as is shown by the many general decisions of the High Authority relating to the fixing of equalization prices, contributions and rates of contribution. It is only in the case of the last operations in this chain of financial transactions—the payment out of equalization allowances and the payment in of equalization contributions—that resort to national currency was necessary in accordance with the currency system in force.
      Therefore these considerations at least raise the presumption that, although the u.a. may have a part to play in the equalization scheme as a method of accounting for the calculation of contribution debts, as soon as a debt arises according to an objective appraisal of the legal situation, its amount was determined in the currency in which it could only in practice be paid. Accordingly—as the High Authority assumes—the conversion which had to be applied was the parity of the national currencies with reference to the u.a. at the date when payment of the equalization contributions arose.
      
      I must however concede at once that this result does not follow conclusively from these considerations alone. Up to what point in time the u.a. operates in the scheme for the equalization of scrap, whether it does not after all remain the determining factor until payment has been effected, can in the final analysis only be ascertained by applying in their entirety the principles which govern the equalization of scrap and reveal its essential nature.
      The main purpose of the scheme for the equalization of scrap is to place the consumers of imported scrap and the consumers of Community scrap on approximately the same footing. This equality of treatment must obviously be applied with reference to a specific period of time, which ideally should be the day when the scrap is acquired as the High Authority expressly concedes. In practice this is not however feasible, and for this reason the High Authority adopted monthly accounting periods. This means that in the end there must be no difference in costs, if in month X of year Y during the operation of the scheme for the equalization of scrap Community or imported scrap is used for the production of steel. The charge for the costs of the primary product must to that extent be approximately the same for the steel producers.
      This connexion between the aim of the scheme for the equalization of scrap and the time factor caused the High Authority to consider all the relevant events and factors, including currency parities, with reference to the equalization month relevant at the time, that is to say, to the period during which the participants were aware also of the economic advantages of the scheme for the equalization of scrap. The High Authority is of the opinion that it was only by so doing that it could take account of the horizontal relationship in which all scrap consuming undertakings stood to each other, in a way which led to a reasonably satisfactory and non-discriminatory equalization.
      I am certain that the High Authority is right on this point. This means that the scheme must be applied retroactively—we are concerned here with a fiction, but with one which is indispensable—as if all the equalization transactions such as purchases of and payment for imported scrap at higher prices, purchases of and payment for Community scrap at lower prices, refunds of the difference between these two prices to the consumers of imported scrap and apportionment of the expenditure connected therewith among all consumers of scrap within the Community were concluded in the relevant equalization month.
      I do not see how any other arguments could upset the correctness of this point of view. In particular I have not been convinced by the applicant's view that, so far as the payment of contributions is concerned, it is also possible to achieve an equal imposition of charges on consumers and equality of treatment of consumers by applying the parity in force on the day of payment. The opposite will be seen to be the case if we imagine for example the case of two German undertakings, one of which paid its equalization contributions in national currency before the revaluation of the DM, while the other after
      the revaluation of the German DM had to pay an amount smaller than the amount of DM originally demanded. In this example the undertaking which paid first was obviously placed at a disadvantage. The observation that the undertaking paying later uses as much international spending power (in spite of the lower nominal amount in DM) has no effect on this finding. If it was correct the creditor would logically have to be treated in the same way, that is to say, German creditors who had not yet been satisfied would have to be paid on the basis of the existing parity, which the applicant itself agrees cannot be done. The fact is that the external value of a currency is only one of the factors to be taken into account in assessing the effect of the equalization charge and possibly, from the point of view of business management, not even the most important for the average undertaking. If attempts are made to introduce this kind of distinction into the scheme for the equalization of scrap, in order to ensure rigorous compliance with the prohibition of discrimination, other considerations would have to be taken into account, for instance that an undertaking as large as the applicant, accustomed to provide for contingent financial liabilities, almost certainly set aside reserves in DM to cover possible equalization debts. It is unnecessary to explain that kind of distinction would make the speedy equalization of a large number of claims and debts between a large number of undertakings practically impossible for a considerable period of time.
      Even if the applicant calls attention to the fact that there has been discrimination against it compared with the French undertakings in arrears with their payments, which according to the rules applied by the High Authority can pay their contributions on the basis of the old French parity, that is to say, with a smaller number of u.a. by reference to the parity now existing, the abjection must be raised against this argument that it only considers one aspect of the matter. If the parity at the date of payment is applied, this means accepting discrimination against other French debtors which discharged their obligations before the devaluation of the franc and were therefore able to pay their equalization charges with a smaller number of francs per u.a. It is not the small number of debtors in arrears with their payments but the large number of undertakings which have discharged their liability to pay contributions punctually which must be regarded as the decisive criterion in answering the question of discrimination. Finally I fail to understand what the applicant intends to achieve with the argument that the parity for the equalization month cannot be decisive, because the parity problem does not arise at all for a part of the expenditure of the Fund, namely the payment of interest, administration expenses or bonuses payable under the equalization scheme. This view is certainly not entirely correct, because the said expenditure also arises in national currency and at least part of it is properly brought into the equalization month, as is the case with the bonus for the use of pig iron which must influence the conditions of production during the equalization month. Although the use of the equalization month as a reference point does not appear strictly speaking to be possible, nevertheless the practical requirements of the scheme for the equalization of scrap do not permit any distinction in dealing with the currency problem to be drawn in the sense advocated by the applicant. The preparation of the statements of account would thereby be made even more difficult than it is already.
      The examination of all aspects of this matter strengthens the conviction that it is not in keeping with the aim of the scheme for the equalization of scrap to take account of the currency parities which happen to be in force at the date of payment. I feel that there would be a greater degree of discrimination if profits and losses arising out of changes in currency parities were credited or debited to the individual accounts of creditors and debtors under the scheme for the equalization of scrap than there would perhaps be if such currency profits and losses were included in the general account of the equalization scheme as a whole.
      This view cannot be shaken by the applicant's references to the way in which currency problems are dealt with in other connexions, for example in the case of the collection of the general levy under the ECSC Treaty, or the payment of contributions by Member States under the EEC Treaty to the general budget, to the European Social Fund or the Agricultural Guidance and Guarantee Fund.
      The essential factor on this point—to which the High Authority has called attention—is that no valid comparison can be made, because these other financial arrangements do not have the characteristics of the scheme for the equalization of scrap which I have mentioned, namely that, since a large number of undertakings stand in the same horizontal relationship to each other, they must be treated as between themselves on exactly the same footing and receive equality of treatment.
      With regard to the levy under the ECSC Treaty I must moreover mention that it is the practice of the High Authority to convert it into national currency at the currency parity applicable at the date when it falls due and not at the date of payment.
      It is a characteristic of the institutions of the Common Market and the Treaties of Rome that, unlike the ECSC Treaty, there are express provisions guaranteeing exchange rates, which can perhaps be explained by the fact that in those institutions the contributions are paid by Member States to the Community and not by private undertakings for the purpose of compensating other private undertakings (cf. budgetary regulations relating to the Agricultural Guidance and Guarantee Fund of 5 February 1964—Official Journal 1964, p. 599—Articles 11 and 12; budgetary regulations relating to the rules and procedure for the payment of contributions of Member States under Article 200 (1) and (2) of the EEC Treaty to the Commission and relating to the technical conditions for implementing the financial operations of the European Social Fund of 31 January 1961— Official Journal 1961, p. 509—Articles 7, 8, 21 to 24).
      To conclude this part of my argument it seems to me that the solution of the currency problem adopted by the High Authority cannot be challenged having regard to the principles governing a priori the equalization of scrap. It follows therefore that not only the complaint of infringement of the Treaty but also the complaint of disregard of the rules governing the High Authority's powers resulting from non-participation of the Council of Ministers are unfounded, because the assent of the Council would only have been necessary if an answer to the parity problem could not have been found by a clarification of the objectives and principles of the scheme for the equalization of scrap.
      Fifth complaint: Infringement of the principle that taxation must not be retroactive
      
      The applicant makes the further complaint in the context of currency problems that Decision No 21/60 imposed on the applicant new charges which, being retroactive, are unlawful. This complaint is based primarily on the argument that the High Authority has in all its decisions always adopted the u.a. both for the purposes of the general levy and of the rules relating to the equalization levy. The applicant should not therefore have had to reckon with the change-over to the system contained in Decision No 21/60. For this reason, as I understand the applicants' pleadings, it complains of an infringement of the principle that long-established legal positions should not be disturbed (‘Vertrauensprinzip’).
      It is in my opinion easy to show that this complaint too is unfounded. First, as I have already mentioned, during the procedure it became clear that the High Authority, the Brussels Fund and the regional offices invariably issued demands for payment in national currencies. That being the case it was therefore unreasonable to imagine that under the equalization scheme debts would be expressed in u.a. But even if it is admitted that statements of account expressed in u.a. were in fact previously served on debtors, there was no reason at the very least until the first change in currency parities in the Community, why this fact should lead to definite conclusions for the purpose of answering the question at what point in time the necessary conversion into national currencies, which is the only effective means of payment, is to take place, because this question was obviously of no importance for the former accounting periods.
      Finally—and this argument may in the final analysis be conclusive—I have shown that the principle adopted by the High Authority in dealing with changes in currency parities, which it had already laid down in Decision No 21/60 before the change in the parity of the DM, is based on an objective interpretation of the principles governing the scheme for the equalization of scrap as laid down in the first general decisions.
      There can therefore be no question of a retroactive change in the legal position of the applicant or of any disturbance of what the applicant legitimately believed to be a securely established legal position (‘Vertrauensposition’).
      Sixth complaint: Inadmissible interference in the monetary sovereignty of the Federal Republic of Germany
      
      In another complaint under the heading ‘currency problems’ the applicant submits that the High Authority is not entitled to regard its own view of the relationship between the DM and the u.a. as being conclusive, because the fixing of currency parities falls within the competence of the Member States.
      Unless I am mistaken the High Authority does not dispute that this power is vested in the Member States. Neither has it endeavoured to exercise this power in the place of Member States or to influence its exercise. It is only in such circumstances that, strictly speaking, there could be said to be an interference with the sovereign powers of Member States in monetary matters.
      In fact all the High Authority did was to incorporate as data into the framework of the scheme for which it is responsible the parity changes adopted by Member States. The fact that it applies the old parity to debits and credits, which arose before the change in currency parity having regard to the particular rules for the equalization of scrap, does not encroach upon the powers of Member States, because, so far as the High Authority is concerned, the equalization contributions and credits arose in national currencies during the equalization month and the amounts calculated in this way remained unchanged. By acting in this way, as has been said, it acknowledged the sovereign powers of Member States in monetary matters, to the extent to which they were exercised at the time when the credits and debts arose.
      Contrary to the view of the applicant the High Authority did not have to resort to Article 67 to offset the effects connected with the changes in currency parities, and this was because it was possible for the High Authority to take this phenomenon into account in the context of the special equalization scheme, applying generally beyond the frontiers of the individual Member States, with its reciprocal relations between undertakings of those States according to the provisions of Article 53 — a lex specialis.
      
      Taking all these arguments into account I have therefore come to the conclusion that the applicant's complaints relating to the currency problem cannot justify the annulment or partial annulment of the contested decision.
      II — The arrangements with regard to interest under Decision No 7/61
      The largest item in the contested decision is made up by the debit balance of interest calculated by the High Authority. A second category of complaints, to which I will now turn my attention, refers to this item.
      Under this head in the first place two submissions of a formal nature arise, namely the complaint that Decision No 7/61, which lays down rules for the calculation of interest, was taken without the assent of the Council of Ministers and the complaint that the statement of the reasons upon which Decision No 7/61 is based is inadequate.
      1. Absence of the assent of the Council of Ministers upon the issue of Decision No 7/61
      The applicant calls attention to the fact that Decision No 16/58 introduced with the assent of the Council of Ministers a system for charging interest on overdue payments. These rules were repealed without the collaboration of the Council by Decision No 7/61 which for a great many undertakings—including the applicant—entailed a considerable increase in charges owing to changes in the factors to be included in the equalization calculations. The High Authority counters this argument by submitting that it did no more than lay down the technical rules of procedure for the equalization of scrap, which fall within its executive powers.
      In connexion with this issue I should first like to stress that no decisive conclusions in support of the applicant's arguments can be inferred from the assent of the Council of Ministers to Decision No 16/58. Such conclusions would presuppose that the assent of the Council of Ministers related to the rules for charging interest on overdue payments and was necessary not only in the opinion of the Council of Ministers but by virtue of the Treaty. On the other hand the fact that, after the issue of Decision No 7/61, no protests were made and no proceedings were commenced by Member States on the ground that the High Authority had disregarded the powers of the Council of Ministers, does not in any way support the High Authority's view, because Article 53 is a mandatory provision, which even the Member States and the Council of Ministers cannot override.
      If the question of the collaboration of the Council of Ministers is considered independently of these two aspects, it is possible to hold the view that its powers were fully respected when the financial arrangements were made because these arrangements, involving the collection of contributions from and the distribution of equalization payments to undertakings, must in the nature of things include rules with regard to interest. However, anyone who is disposed to construe Article 53 strictly will, bearing this fact in mind, be inclined to the view that rules with regard to interest—as is shown by the present case—can be established according to several different systems, that is to say, can produce results which vary considerably, and that consequently the Council of Ministers has to have some say in the choice of the most effective form for such a system and therefore in the fixing of the essential details of the equalization rules.
      As was the case in the examination of the corresponding complaint relating to the currency problem, this question cannot in the final analysis be decided until the legal examination of the substance of the question of interest has been concluded. The examination may lead to the conclusion that only one system with regard to interest, the one finally chosen, complies with the principles of the scheme for the equalization of scrap. If this is the case, that is to say, if the system already in force with regard to interest arises logically out of the basic structure of the equalization scheme as set out in the original decisions, which were issued with the assent of the Council of Ministers, its publication at a later date is not to be regarded as an indepenent and new measure establishing this system within the framework of the equalization scheme, but only as a technical implementing decision in the sense claimed for it by the High Authority.
      We must therefore deter the examination of this question for the time being and return to it later after examining the substance of the essential legal problem.
      2. Inadequate statement of the reasons upon which Decision No 7/61 is based
      In the opinion of the applicant the statement of the reasons upon which Decision No 7/61 is based is inadequate because its recitals are not conclusive. The applicant states that the High Authority relied primarily on the consideration that under the old system interest was charged on provisional debts, the amount whereof can change, so that the interest paid might not correspond to the principal debt. The new system, on the other hand, is said not to be affected by variable factors. This object, in the applicant's opinion, can also be achieved with the help of the old system by an adjustment in the final statement of account. It concludes from this that the High Authority must in fact have had a different object in mind when it established the new system with regard to interest, which is not covered by any recitals in the statement of the reasons upon which the decision is based.
      It seems to me that this complaint that the statement of reasons is inadequate, just like the complaint relating to the currency problems, to say the least almost falls outside the field of formal complaints, because it refers essentially to substantive legal questions. But quite apart from this argument it does not seem that it can enable the applicant to succeed. If I understand the application correctly, the applicant when formulating its application only quoted a part of the statement of the reasons upon which the decision was based. The decision also states that the new rules with regard to interest are intended to provide compensation for the fact that payments were made at different times, which can be regarded as a reference to what the High Authority calls nondiscrimination in ‘time’. This concept, which was not included in the applicant's case, could be an adequate reason for giving the High Authority's decision a meaning other than the one attributed to it by the applicant. In any case it is a sufficient reason in the present context for dismissing the complaint that the statement of reasons is not conclusive.
      3. Infringement of the Treaty
      With the complaint of an infringement of the Treaty we come face to face with the main issue of the second category of questions, that is to say, with the substantive legal examination of the system with regard to interest introduced by Decision No 7/61. This calls for observations on several aspects of this issue.
      I will first of all once more call attention briefly to the main innovation introduced by Decision No 7/61. Under the old system, as I will call it from now on, interest was credited to the undertakings entitled to equalization payments which had not received their equalization grants during the equalization month. Further, if I correctly understand the system, interest was credited to those debtors under the equalization scheme who had paid too much, as was sometimes discovered during a later adjustment of the equalization account, and had claims for repayment of the corresponding amount. By virtue of several resolutions of the Board of the Equalization Fund up to 1958 a system for charging interest on overdue payments was applied if payment of the contribution demanded by the Fund had not been paid punctually. After the transfer of the administration to the High Authority, as from 1958 interest on overdue payments had to be paid by undertakings which had not discharged their liability to pay contributions within 25 days after the publication of the decisions fixing the rate of their contributions.
      The new system laid down in Decision No 7/61 on the other hand is based on the actual payments by each debtor undertaking the situation of creditor undertakings under the equalization scheme has not changed and under this system interest is credited from the date of payment to the date of the final equalization account at the rate of 5 % on the principal debt. The amounts required for this purpose are charged to all undertakings liable to pay contributions in proportion to the quantities of scrap subject to equalization. After the entry into force of Decision No 7/61 interest on overdue payments which had been paid before was deducted from the principal debt and the accounts relating to such interest were thus closed off. As the High Authority maintained and endeavoured to prove with several examples, the new system is not unlike a system for charging interest when a debt falls due (‘Falligkeitszinsen’), that is to say, to a system which does not take into consideration demands for payment, delay, default, etc.
      
               (a)
            
            
               Is this system in fact, as the applicant claims, discriminatory, because all undertakings in arrears with their payments are treated on the same footing without considering whether there has been delay or whether, as in the applicant's case, there has been no service of a notice of default, having regard to the existing objective difficulties in deciding how to deal with group scrap within the framework of the equalization scheme.
               There is no doubt that the answer to this question is likely to be in the affirmative, if the system for charging interest on overdue payments is regarded as a ‘classified’ system generally applied and recognized, that is to say, a system which in dealing with delayed payment of financial obligations comes closest to the concept of justice, and if payments of sums due under the equalization scheme are considered to be similar to payments arising under contractual relationships in general and under normal relationships governed by public law (Revenue law).
               But at this point, and quite correctly, the High Authority raises an important objection which is directed to the special nature of the equalization scheme and to the need to apply under the scheme a system for charging interest specially adapted to it.
               As I have repeatedly mentioned, the equalization scheme is intended to ensure a kind of compensation of charges arising out of the purchase of scrap, which means that it must in practice see to it that, with reference to specific periods, no distinction is made between undertakings which consumed Community scrap and those which used imported scrap. Such a system of equaliza tion would operate perfectly, if all the necessary accounts could be drawn up in a short time and if, on the basis of these accounts, an effective equalization could be carried out shortly afterwards. This would result in all undertakings consuming scrap receiving the maximum equality of treatment.
               However the reality fell short of this ideal situation, either because declarations of purchases and consumption of scrap were not supplied, or because payments were withheld, or because disputes arose which were objectively complicated and which took a very long time to settle. Payment of considerable sums of money required for equalization was for this reason delayed and the default in payment could not always be penalized by charging interest for delay in payment. Therefore, and I can only make a passing reference to the matter here, having regard to the objective difficulties involved in the scheme for the equalization of scrap, it will only be possible in very exceptional cases to allege that the High Authority has been guilty of an unlawful act or omission with the result that it will have to answer for the delay by a payment out of its general budget.
               On the other hand, as I have already mentioned, the equalization scheme requires that interest be credited to undertakings entitled to equalization, with reference to the various equalization months, because otherwise the equalization, to the detriment of those undertakings, would be incomplete. It was only possible to put this matter right under the old system by debiting the deficit not covered by interest for overdue payment to the general expenses of the fund and to charge the contributions necessary to fill this gap to all debtors subject to equalization.
               
               It is easy to see that this procedure represented a big departure from the principle of treating all undertakings participating in equalization on the same footing. For instance debtors who had paid punctually had now to make additional payments to cover the expenditure in the way of interest which I have mentioned, while debtors in arrears with their payments (which had not defaulted in payment) could enjoy for years the benefit of sums of money which really belonged to the equalization fund.
               I am quite certain, therefore, that it is not the new regulations and apportionment of interest charges, as laid down in Decision No 7/61, but the old regulations—having regard to principles necessary for the equalization—which are discriminatory.
               If this view is accepted, it follows that not only the applicant's complaint of discrimination but also its complaint that the failure to obtain the consent of the Council of Ministers to the introduction of the new system was unlawful are both unfounded, because this new system, as I have endeavoured to show, is based directly on the principles of equality of treatment and non-discrimination, which applied to the equalization scheme from its inception.
            
         
               (b)
            
            
               I must however also pose the question whether there are any other grounds for the view that the remodelling, which only took place in 1961, of the rules with regard to interest, was illegal, even though it complied in principle with the basic rules of the equalization scheme.
               Several submissions of the applicant have to be considered on this question, and they are very difficult to distinguish from each other from the legal point of view.
               
                        —
                     
                     
                        In the opinion of the applicant exception must be taken to the fact that the High Authority when it introduced Decision No 7/61 infringed a principle, which it had laid down earlier and in accordance with which it selected a system relating to interest to be applied to the equalization scheme. The applicant should have been able to rely on the legal validity of this choice. The High Authority would then only have been justified in going back on its choice if the rules laid down originally proved to be illegal.
                        In my opinion it cannot however be shown that such principles must be applied to legislative measures of the High Authority which have general application. Even if, conversely, there is no general principle that a legislator must be free to replace at any time rules which have proved to be inadequate by more suitable ones, there is nevertheless in the case-law of the Court, at least in connexion with the equalization scheme, some indication that this view is correct (Case 19/61, Rec. 1964, pp. 707-708). This is explained primarily by the fact that the later general decisions did not make any fundamental change in the scheme for the equalization of scrap, but were rather aimed at the adjustment of those principles arising out of the first decisions relating to the equalization of scrap, even if—so far as details are concerned—this was perhaps only done imperfectly. Further, as I have shown, the original system of charging interest is not only incomplete and therefore ineffective, but is also discriminatory, which, having regard to the basic principles of the equalization of scrap, proves that in the sense of the applicant's complaint it is unlawful.
                     
                  
                        —
                     
                     
                        Similar considerations apply in this connexion to a second observation of the applicant that the retroactive charging of interest on overdue payments is unlawful. The particular answer to this argument is that the Court, bearing in mind the special nature of the equalization of scrap in these matters, has interpreted very liberally the right of the High Authority to take retroactive measures of a corrective nature and involving the imposition of charges, in particular when an unjustified benefit has to be withdrawn. On this point I refer to the decided cases of the Court quoted by the High Authority during the oral procedure.
                     
                  
                        —
                     
                     
                        Finally the High Authority cannot either be accused of failing to take vital interests into consideration and neglecting in this case to the detriment of the applicant the principle of legal certainty by departing from the rules laid down in Case 19/61.
                     
                  As Decision No 7/61 is a measure of general application, the consideration of individual interests separately cannot arise. If the High Authority were obliged under the general decisions which it issues to consider individual cases in such detail, it could only perform its legislative function with great difficulty. With regard to the principle of legal certainty the applicant wrongly relies on the judgment in Case 19/61. In that case the principle of legal certainty was applied in a different sense to justify legal criteria which could be clearly and unequivocally delimited, that is to say, in the interests of legal certainty for all consumers of scrap, whereas in this case the applicant invokes this principle in support of the reservation of one individual legal position, which, as has been shown, cannot be reconciled with the principles governing the equalization of scrap.
            
         Therefore I adhere to the view that none of the submissions put forward establishes that the retroactive replacement of the original rules for charging interest by Decision No 7/61 can be said to be illegal.
      III — Summary and conclusion
      All these considerations lead me to give the following opinion: the application of the Mannesmann company directed against the decision of the High Authority of 8 July 1964 is admissible but unfounded. For the reasons given it must be dismissed with the result that the applicant must bear the costs of the proceedings.
      (
            1
         )	Translated from the German.