CELEX: 61983CC0276
Language: en
Date: 1985-06-11 00:00:00
Title: Opinion of Mr Advocate General Lenz delivered on 11 June 1985. # Commission of the European Communities v Hellenic Republic. # Removal from the register. # Case 276/83.

OPINION OF MR ADVOCATE GENERAL
      LENZ
      delivered on 11 June 1985 (
            *1
         )
      
         Mr President,
      
      
         Members of the Court,
      
      
               A. 
            
            
               It was provided in Decision No 608 TK of 19 February 1977 of the Greek Monetary Committee that the sale of private motor cars on credit terms was authorized only where they had been manufactured or assembled in Greece and where the national added value represents at least 30% of the total cost of construction. Consequently, that method of acquisition is excluded in the case of imported motor vehicles.
               The Commission considers that that provision is incompatible — by virtue of Article 35 of the Act concerning the Conditions of Accession of the Hellenic Republic and the Adjustments to the Treaties (Official Journal 1979, L 291, p 17) — with the prohibition of quantitative restrictions on imports and all measures having equivalent effect contained in Article 30 of the EEC Treaty, which applies without restriction to the Hellenic Republic as from 1 January 1981.
               When the Commission informed the Greek authorities thereof — apparently in June 1981 — its view was accepted and it was agreed that the difference in treatment which had been established would be terminated.
               Since it was not terminated (the legal position in Greece has, moreover, not been altered to this day — contrary to what was said by the representative of the Greek Government at the hearing on 21 November 1984,) the Commission initiated a procedure under Article 169 of the EEC Treaty by letter dated 24 March 1982. It contended, with regard to Article 30 of the EEC Treaty, that the decision at issue favoured the sale of motor cars manufactured in Greece, that it made the importation of motor cars more difficult and expensive than the sale of national products and that it made access to the Greek market for foreign vehicles dependent upon a condition which did not apply to national products. It was also pointed out that the laying down of conditions of payment applicable to imported products alone was contrary to Commission Directive 70/50/EEC of 22 December 1969 on the abolition of measures which have an effect equivalent to quantitative restrictions on imports (Official Journal, English Special Edition 1970 (I), p. 17).
               On 3 June 1983, since the Greek Government failed to respond to that letter, the Commission issued a formal opinion in like terms in which it required the necessarymeasures to be adopted within one month of delivery thereof.
               By a letter dated 13 October 1983 the Greek Government responded to that opinion. It pointed out in the first place that since the decision at issue was a measure for securing payment in cash it constituted a measure taken with a view to redressing the deficit on the Greek balance of payments. It stated, secondly, that the decision was also intended to encourage the development of the Greek motor car industry, which was in its infancy. In that context it was necessary to take into consideration not only the fact that the national industry did not account for a large part of the supply on the Greek market and that therefore the measures at issue did not affect imports to a significant extent, but also the fact that the special characteristics of the Greek economy were expressly recognized in Protocol No 7 to the Act of Accession ‘ on the economic and industrial development of Greece’ (Official Journal 1979, L 291, p. 177), in the Commission's reply to a memorandum drawn up by the Greek Government and dated 22 March 1982 and in the conclusions of the European Council meeting held at Stuttgart. Finally, the Greek Government contended that the rules at issue were to be regarded as a form of aid within the meaning of Article 92 of the EEC Treaty but not, when considered in the light of Article 2 of the EEC Treaty, as contrary to the common interest.
               The Commission was not convinced of the soundness of those arguments and consequently, on 19 December 1983, it brought an action before the Court of Justice for a declaration that, by prohibiting the sale on credit terms of imported motor cars intended for private (and not public) use, the Hellenic Republic has failed to fulfil its obligations under Article 30 of the EEC Treaty and Article 35 of the Act concerning the Conditions of Accession of the Hellenic Republic to the European Communities.
            
         
               B. 
            
            
               My views on that application, which the Greek Government considers to be unfounded, are as follows.
               
                        1.
                     
                     
                        There can be no doubt that the measure at issue must be regarded fundamentally as an obstacle to imports for the purposes of Article 30 of the EEC Treaty.
                        As a result of the aforementioned difference in treatment, the importation of motor cars is more difficult and expensive than the sale of national products. In addition, sales of the latter are favoured, for purchasers who are unable to pay cash choose Greek cars and consequently fewer vehicles are imported than would be the case in the absence of the rules in question. That situation is clearly covered by the formulation developed by the Court in its case-law concerning Article 30 according to which ‘all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade’ are to be considered as measures having an effect equivalent to quantitative restrictions. (
                              1
                           ) Reference may also be made to Article 2 (2) of the aforementioned Commission directive which defines measures having an effect equivalent to quantitative restrictions as including those which subject imported products to a condition which is required in respect of imported products only and to Article 2 (3) (h) and (k) thereof which refers to conditions of payment in respect of imported products only and preferential treatment for domestic products only.
                        It is also clear from the decided cases (see the Court's judgment in Joined Cases 177 and 178/82 (
                              2
                           )
                        Similarly, there is no merit in the Greek Government's argument to the effect that Greek industry does not obtain from that situation a major advantage over the automobile industry in other Member States in which interest rates on capital are much lower and in which — in contrast to Greece — self-restraint agreements affect imports of Japanese cars. The Commission countered that argument by rightly pointing out that account could easily be taken of the said circumstances without infringing the Treaty by the application — in the case of imports of Japanese cars — of measures similar to those adopted in the other Member States and — in the case of interest on capital — by having recourse, where need be, to aid, subject to approval by the Community.
                     
                  
                        2.
                     
                     
                        In essence the Greek Government attempted to defend itself against the charge that it had infringed Article 30 of the EEC Treaty by pointing to the deficit on its balance of payments, by reliance on Protocol No 7 to the Act of Accession ‘on the economic and industrial development of Greece’ and by reference to its memorandum of 22 March 1982 headed ‘Position of the Greek Government on Greece's relations with the European Communities’ and to the Commission's opinion thereon of 29 March 1983 (no reference was made at the hearing — in my view correctly — to the conclusions of the European Council's meeting held in Stuttgart).
                        However, it is comparatively easy to show that these arguments do not constitute a valid defence to the Commission's application for a declaration that the Treaty has been infringed.
                        
                                 (a)
                              
                              
                                 That is manifestly the case as regards the argument concerning the Greek balance of payments problem.) that the degree of hindrance is not important in that context and that therefore the question does not depend on there being an ‘appreciable’ hindrance. Consequently, the argument of the Greek Government — supported by statistics on imports into and production in Greece — that the measure in question does not affect the common market to a disproportionate extent because Greek industry does not have a very large share of the Greek market is irrelevant. One may also ask, as the Commission rightly did, whether the 10% share of the Greek market held by Greek industry, which manufactures a few types of vehicle only, can really be regarded as insignificant in comparison with the share of the other Member States, when the remaining 90% share originates in various places, both Member States and nonmember countries.
                                 It has to be said that it is a priori improbable that that problem could have been the principal reason for adopting measures which affect only a single economic sector. In addition, the Greek Government made it fairly clear during the hearing that in reality the main reason for the adoption of the rules at issue was to protect the Greek automobile industry which was relatively new and was still in the process of being organized. In that connection it is to be noted, moreover, that balance of payments difficulties do not of course automatically justify derogation from the general principles of the Treaty. Article 108 of the EEC Treaty makes specific provision for such a situation (Commission recommendations; mutual assistance; authorization of the adoption of protective measures); apparently, however, the Hellenic Republic has not initiated that procedure.
                              
                           
                                 (b)
                              
                              
                                 In Protocol No 7, which was adopted in order ‘to settle certain special problems of concern to Greece’, and which was the basis of the Greek Government's main argument, reference is made initially to the fundamental objectives of the Community and the Hellenic Government's objectives in implementing a policy of industrialization and economic development. It is recognized that the attainment of the objectives of that policy is in the common interest. It is also stated that the contracting parties are in agreement ‘to recommend to this end that the Community institutions implement all the means and procedures laid down by the EEC Treaty, particularly by making adequate use of the Community resources intended for the realization of the Communities aforementioned objectives’; finally, it is recognized in particular that, ‘in the application of Articles 92 and 93 of the EEC Treaty, it will be necessary to take into account the objectives of economic expansion and the raising of the standard of living of the population’.
                                 In view of the structure of the protocol and in particular the wording of the last two paragraphs concerning the measures to be adopted, it is clear to me that the protocol does not authorize a general derogation from the rules of the Treaty and the rules of the Act of Accession (which would in fact be surprising in view of Article 35 of the Act of Accession and the specific derogations from the prohibition of quantitative restrictions on imports and exports provided for in Article 36 et seq.). On the contrary, it is clear that account must be taken of the particular interests of Greece within the framework of the application of the rules of the Treaty, in particular by giving effect to the means available to the Community institutions and by developing Community policies (which, as the Commission has shown by means of examples, has already been the case and continues to be the case).
                                 It is therefore certainly quite wrong to use the reference to the fundamental objectives of the Community in the first paragraph of Protocol No 7 (which correspond to the objectives contained in Article 2 of the EEC Treaty) as a basis for concluding, in contradiction with the penultimate paragraph of that protocol, that the adoption of measures which are not provided for in the Treaty (such as quantitative restrictions on imports) is permissible. It is quite certain that a teleological interpretation — as suggested by the Greek Government — does not extend to justifying such a conclusion. The mere fact that the measure at issue does not fall within the category of aid — since it does not involve the expenditure of State financial resources — is, however, sufficient to exclude the application of the final paragraph of the protocol to this case. Even the Greek Government now seems to take that view — if I am correct in my understanding of its written submissions.
                              
                           
                                 (c)
                              
                              
                                 It must be acknowledged that the Greek memorandum (Bulletin of the European Communities 1982 No 3, at p. 100 et seq.), which was also relied upon by the Greek Government, refers, inter alia, to derogations from specific Community rules (see Point 9). However, the Commission's detailed response to that memorandum sets out clearly the only measures to which the Community may have recourse with a view to dealing with the Greek problems (namely measures contributing to the realization of a five-year plan, the allocation of Community resources to Greek industry or the approval of national aid). On the other hand, there is nothing to be found in the Commission's response which amounts to a consent to measures which infringe the Treaty (which the Commission would in any event not be empowered to give); on the contrary, in Point 14 of that response, where reference is made to the possibility of the Community's contributing to the development of the Greek economy in the implementation of its policy, derogations from the Treaties are expressly excluded. Consequently, those documents cannot be relied upon to justify disregard of the prohibition contained in Article 30 of the EEC Treaty.
                              
                           
                  
         
               C. 
            
            
               Accordingly, all that remains to be said is that the Commission's view of the Greek measures at issue is correct and that it is necessary to declare, in conformity with the terms of its application to the Court, that, by prohibiting the sale on credit terms of imported motor cars intended for private (and not public) use, the Hellenic Republic has failed to fulfil its obligations under Article 30 of the EEC Treaty and Article 35 of the Act concerning the Conditions of Accession of the He enic Republic to the European Communities. In those circumstances the Hellenic Republic must also be ordered to pay the costs.
            
         (
            *1
         )	Translated from the German.
      (
            1
         )	Judgment of 11 July 1974 in Case 8/74, Procureur du Roi v Benoit and Gustave Datsonville, [1974] ECR 837, paragraph 5 of the grounds of judgment, p. 852.
      (
            2
         )	Judgment of 5 April 1984 in Joined Cases 177 and 178/82, Criminal Proceedings against Jan van de Haar and Kaveka de 0 Meern BV[I984] ECR 1797.