CELEX: 62009CC0407
Language: en
Date: 2010-12-16
Title: Opinion of Mr Advocate General Mazák delivered on 16 December 2010. # European Commission v Hellenic Republic. # Failure of a Member State to fulfil obligations - Breach of the obligation to comply with a judgment of the Court - Financial penalties - Imposition of a lump sum payment. # Case C-407/09.

OPINION OF ADVOCATE GENERAL
      MAZÁK
      delivered on 16 December 2010 (1)
      
      Case C‑407/09
      European Commission
      v
      Hellenic Republic
      (Failure to comply with a judgment of the Court – Financial penalties – Imposition of a lump sum payment)1.        This action was brought by the Commission of the European Communities against the Hellenic Republic pursuant to Article 228
         EC (corresponding now to Article 260 TFEU), for alleged failure to comply with the judgment of the Court in Case C-26/07 Commission v Greece (2) (‘the 2007 judgment’). In that judgment, the Court held that, by failing to adopt, within the period prescribed, the laws,
         regulations and administrative provisions necessary to comply with Council Directive 2004/80/EC of 29 April 2004 relating
         to compensation to crime victims, (3) the Hellenic Republic had failed to fulfil its obligations under that directive.
      
      2.        The Commission asks the Court to declare that the defendant has failed to fulfil its obligations under Article 228(1) EC,
         and to order the defendant to pay a lump sum. (4) The Hellenic Republic calls for the action to be dismissed.
      
       Pre-litigation procedure
      3.        On 29 February 2008, seven months after the 2007 judgment was delivered, the Commission sent a letter of formal notice to
         the Hellenic Republic asking it to produce, within two months, the measures adopted to comply with that judgment.
      
      4.        In replying by letter dated 10 September 2008, the Hellenic Republic failed to comply with the time-limit set by the Commission.
         In its reply, it indicated that the draft law intended to put an end to the infringement found by the 2007 judgment was in
         the final stage of being drawn up. (5)
      
      5.        On 23 September 2008, the Commission sent the Hellenic Republic a reasoned opinion, calling upon it to take the necessary
         measures to comply with the 2007 judgment within two months.
      
      6.        The Hellenic Republic once again failed to comply with the time-limit set by the Commission. It did not reply until 22 June
         2009, when it stated that the draft law transposing Directive 2004/80 would be tabled in a summer session of the Greek parliament.
      
      7.        On 25 June 2009, the Commission decided to bring an action against the Hellenic Republic before the Court of Justice. The
         action was finally brought on 20 October 2009, when the Commission asked the Court to find that the Hellenic Republic had
         failed to fulfil its obligations and to order the Hellenic Republic to pay a penalty payment and a lump sum.
      
      8.        During the period between the decision by the Commission to bring an action and the initiation of those proceedings, the Hellenic
         Republic sent two letters to the Commission containing details of the progress made in the legislative process concerning
         the law to transpose Directive 2004/80. Finally, by letter dated 10 September 2009, the Hellenic Republic informed the Commission
         of the suspension of the legislative process because early parliamentary elections had been called.
      
       Developments in the course of the present proceedings
      9.        The Hellenic Republic transposed Directive 2004/80 by Law No 3811/2009, published on 18 December 2009 in the Official Gazette of the Hellenic Republic (FEK A’ 231). 
      
      10.      The Commission was notified of this law by letter dated 22 December 2009. Despite this notification, and relying on its communication
         of 13 December 2005 on the application of Article 228 EC (6) (‘the 2005 communication’), the Commission decided not to withdraw its action. In its reply, it stated that it was no longer
         seeking the imposition of a penalty payment but that it was maintaining its claim for payment of a lump sum.
      
       The infringement
      11.      In the present case, it is quite clear that the Hellenic Republic, by failing to take the necessary measures to comply with
         the 2007 judgment, has failed to fulfil its obligations under Article 260(1) TFEU. It matters little that the Member State
         concerned finally adopted the required measures after the action was brought.
      
      12.      This finding is required in light of the settled case-law according to which the question whether a Member State has failed
         to fulfil its obligations must be determined by reference to the situation prevailing in the Member State at the end of the
         period laid down in the reasoned opinion, and the Court cannot take account of any subsequent changes. (7)
      
      13.      In the present case, compliance with the 2007 judgment involved adoption by the Hellenic Republic of the necessary measures
         to comply with Directive 2004/80. It is beyond dispute that the Hellenic Republic did not adopt those measures until December
         2009, when Law No 3811/2009 was enacted, whereas the reasoned opinion setting a time-limit of two months for compliance with
         the 2007 judgment was dated 23 September 2008.
      
      14.      The case-law mentioned above also rules out the argument advanced by the Hellenic Republic that the action should be dismissed
         in view of its constant close collaboration with the Commission throughout the pre-litigation procedure and of the fact that
         it complied with the 2007 judgment before delivery of the judgment in the present case.
      
      15.      I consider that these circumstances may be taken into account, if appropriate, in assessing the need to impose financial penalties
         and their amount, but not in establishing whether the Member State has failed to fulfil its obligations as alleged.
      
      16.      In this connection, I would add that it is possible to speak of ‘constant close collaboration’ on the part of the Hellenic
         Republic with the Commission only from the point at which the Commission decided to bring the present action. In my view,
         the belated replies from the Greek authorities both to the letter of formal notice and to the reasoned opinion certainly do
         not demonstrate this kind of collaboration.
      
       The financial penalty
       Arguments of the parties
      17.      Originally, the Commission asked the Court to order the Hellenic Republic to pay both a penalty payment and a lump sum. As
         noted in point 10 of this Opinion, the Commission withdrew its claim for a penalty payment following compliance with the 2007
         judgment after the present action was brought, while maintaining its claim for payment of a lump sum.
      
      18.      The Commission considers that the imposition of a lump sum is justified, in the present case, by the duration of the infringement
         (29 months) and its very serious consequences for public and private interests, given that the failure to transpose Directive
         2004/80 into Greek law obstructed achievement of the fundamental objective of freedom of movement for persons in a single
         area of freedom, security and justice.
      
      19.      The Commission also refers to the aggravating circumstances surrounding the alleged breach of obligations, such as, firstly,
         the clarity of the 2007 judgment and the provisions of Directive 2004/80 which thus present no difficulties of interpretation,
         secondly, the lack of any particular difficulties associated with the procedure for transposing Directive 2004/80 and, thirdly,
         the late response of the Greek authorities to the reasoned opinion.
      
      20.      With regard to the amount of the lump sum, the Commission proposed a daily lump sum of EUR 10 512 for each day of delay from
         the date on which the 2007 judgment was delivered until the date of delivery of judgment in the present case, or the date
         on which the measures necessary to comply with the 2007 judgment were taken if that occurred earlier. (8)
      
      21.      In accordance with the 2005 communication, this daily lump sum is calculated by multiplying a flat-rate amount, set at EUR 200,
         by a coefficient for seriousness (in this case, 12 on a scale from 1 to 20) and by a factor set for each country (the ‘n’
         factor) which takes account of both the ability to pay of the Member State concerned, represented by its gross domestic product,
         and the number of votes it has in the Council of the European Union (stated to be 4.38 in the case of the Hellenic Republic).
      
      22.      At the hearing, the Commission reduced the daily lump sum proposed initially to EUR 10 248 because of the adjustment to the
         ‘n’ factor laid down in the Commission communication of 14 September 2010 concerning the application of Article 260 TFEU and
         the updating of data used to calculate lump sum and penalty payments to be proposed by the Commission to the Court of Justice
         in infringement proceedings (9) (‘the 2010 communication’). This adjustment was based on the economic data available for 2008. For the Hellenic Republic,
         the ‘n’ factor was set at 4.27 instead of 4.38. (10)
      
      23.      The Hellenic Republic has contested the imposition of a lump sum, for several reasons. 
      
      24.      Firstly, the Hellenic Republic complied with the 2007 judgment before delivery of the judgment pursuant to Article 260 TFEU
         and, in any event, within a reasonable period given the economic difficulties that it was and still is facing. 
      
      25.      Secondly, there is no risk of a repeat infringement. Thirdly and finally, the alleged breach of obligations cannot be regarded
         as particularly serious, given that, quite apart from the specific provisions adopted in December 2009, Greek law provides
         for compensation to injured persons in general and Directive 2004/80 applies only to a limited number of cases, so that the
         effects of failure to comply with the 2007 judgment on public and private interests are not direct and are in any event uncertain.
      
      26.      The Hellenic Republic has stressed that the delay in transposing Directive 2004/80, and hence in complying with the 2007 judgment,
         was principally and objectively attributable to the need to find the necessary financial resources.
      
      27.      In the alternative, if the Court should decide to order it to pay a lump sum, the Hellenic Republic has proposed that the
         amount be reduced to the minimum lump sum specified for it by the 2005 communication, namely EUR 2 190 000. At the hearing,
         it added that it was also asking to be allowed to pay in instalments, without interest.
      
      28.      According to the Hellenic Republic, in order to rule on the amount of the lump sum to be paid, the Court must take account
         of all the circumstances of the case and particularly its ability to pay, including its present situation.
      
      29.      In this connection, the Hellenic Republic mainly disputes the ‘n’ factor used by the Commission to express Member States’
         ability to pay, which is based on gross domestic product and the number of votes the Member State concerned has in the Council.
         Although the 2010 communication reduced this factor for the Hellenic Republic in light of the economic data for 2008, the
         factor does not reflect the current economic reality, given that the gross domestic product for 2009 and 2010 is different
         again.
      
      30.      Moreover, matters such as gross domestic product and the number of votes in the Council are not sufficient in themselves to
         determine a Member State’s ability to pay. Other factors should also be taken into account, such as the public deficit, the
         national debt or inflation.
      
       Appraisal
      31.      As I have already had occasion to explain in my Opinion in Case C-70/06 Commission v Portugal, (11) I consider that, in order to apply the enforcement procedure provided by Article 260 TFEU in a consequent manner, that procedure
         must be understood as a tool for fully realising the objective of proceedings under Article 258 TFEU, which is to bring infringements
         of European Union law to an end, and at the same time as a means of dissuading Member States from failing to comply with the
         judgments of the Court establishing a breach of European Union law pursuant to Article 258 TFEU.
      
      32.      The nature of the system of financial penalties which under Article 260(2) TFEU serve to achieve these objectives follows
         from the case-law of the Court. While a penalty payment seems particularly suitable for the purpose of inducing a Member State
         to put an end as soon as possible to a breach of obligations which, in the absence of such a measure, would tend to persist,
         the imposition of a lump sum is based more on the assessment of the effects on public and private interests of the failure
         of the Member State concerned to comply with its obligations, in particular where the breach has persisted for a long period
         since the judgment initially establishing it was delivered. (12)
      
      33.      In the present case, the Commission rightly withdrew its claim seeking a penalty payment, given the function of penalty payments
         as described above and the compliance with the 2007 judgment by the Hellenic Republic. This is also confirmed by the case-law
         of the Court, under which the imposition of a penalty payment pursuant to Article 260 TFEU is, in principle, justified only
         in so far as the failure to comply with an earlier judgment of the Court persists. (13)
      
      34.      With regard to the imposition of a lump sum, I would reiterate the view expressed in my Opinion in Case C-121/07 Commission v France, (14) that a lump sum cannot be ordered automatically in all cases where a failure to fulfil obligations pursuant to Article 260(1)
         TFEU has been found. 
      
      35.      The Court has followed this approach in finding that that provision confers a wide discretion upon it when deciding whether
         or not to impose such a penalty (15) on the basis of all the relevant factors pertaining to both the particular nature of the infringement established and the
         individual conduct of the Member State involved. (16)
      
      36.      I consider that, in the present case, three facts argue for the imposition of a lump sum. 
      
      37.      First, there is the conduct of the Hellenic Republic. As I have pointed out in point 16 of the present Opinion, although the
         Hellenic Republic has referred to its ‘constant close collaboration’ with the Commission, the belated replies from the Greek
         authorities both to the letter of formal notice and to the reasoned opinion certainly do not demonstrate this kind of collaboration
         during the pre-litigation procedure. The change in the Greek authorities’ conduct came about only after the Commission’s decision
         to bring the present action.
      
      38.      Second, there is the duration of the infringement. In my view, the period of 29 months that passed from the date on which
         the 2007 judgment was delivered to the date of adoption of the law transposing Directive 2004/80 into Greek law may be regarded
         as a significant length of time, particularly given the circumstances also highlighted by the Commission, namely the clarity
         of the 2007 judgment and of Directive 2004/80, which consequently present no difficulties of interpretation, and the lack
         of any particular difficulties associated with the procedure for transposing Directive 2004/80.
      
      39.      The arguments put forward by the Hellenic Republic seeking to justify the duration of the infringement on the basis of the
         problems relating to the need to gather the financial resources necessary for transposing Directive 2004/80 or to the holding
         of elections cannot be upheld. The Court has clearly stated that a Member State cannot plead provisions, practices or situations
         prevailing in its domestic legal order to justify failure to observe obligations arising under European Union law. (17)
      
      40.      Thirdly, the seriousness of the infringement also argues for the imposition of a lump sum. Account must be taken of the fact
         that the Hellenic Republic was the last Member State to transpose Directive 2004/80, and did so almost four years after the
         expiry of the time-limit for transposing it. (18)
      
      41.      However, recital 7 in the preamble to Directive 2004/80 states:
      
      ‘This Directive sets up a system of cooperation to facilitate access to compensation to victims of crimes in cross-border situations, which should operate on the basis of
         Member States’ schemes on compensation to victims of violent intentional crime, committed in their respective territories.
         Therefore, a compensation mechanism should be in place in all Member States.’ (19)
      
      42.      It follows that, by its failure to act in connection with Directive 2004/80, the Hellenic Republic has also to some extent
         compromised the measures adopted by the other Member States and reduced the effectiveness of their compensation mechanisms.
      
      43.      Furthermore, as the Commission has rightly pointed out, failure to transpose Directive 2004/80 into Greek law obstructed achievement
         of the fundamental objective of freedom of movement for persons in a single area of freedom, security and justice. This finding
         is supported by recital 2 in the preamble to Directive 2004/80, which reads as follows: 
      
      ‘The Court of Justice held in the Cowan … Case that, when Community law guarantees to a natural person the freedom to go to
         another Member State, the protection of that person from harm in the Member State in question, on the same basis as that of
         nationals and persons residing there, is a corollary of that freedom of movement. Measures to facilitate compensation to victims
         of crimes should form part of the realisation of this objective.’
      
      44.      In view of the conduct of the Hellenic Republic and the duration and the seriousness of the infringement, as resulting from
         the circumstances described above, I consider that the Hellenic Republic should be ordered to pay a lump sum.
      
      45.      As for the amount of this lump sum, it should be noted at the outset that the Court is not bound by the proposal from the
         Commission and that the amount of the lump sum is a matter for its own discretion. (20)
      
      46.      It can be seen from the judgments in which the Court has ordered Member States to pay a lump sum (21) that, in contrast to the fixing of a penalty payment, the Court has not adopted the method of calculation proposed by the
         Commission in its 2005 communication.
      
      47.      For this reason, I consider it neither helpful nor necessary to examine whether the calculation of the ‘n’ factor is correct,
         which the Hellenic Republic disputes, or to seek an answer as to whether this factor, based on gross domestic product and
         the number of votes in the Council, is sufficient in itself to determine a Member State’s ability to pay. (22)
      
      48.      It follows from case-law that, when conducting the assessment required in order to set the amount of a lump sum payment, the
         Court must ensure that that penalty is appropriate to the circumstances and proportionate both to the breach that has been
         established and the ability to pay of the Member State concerned. The relevant factors to be taken into account include, in
         particular, factors such as how long the breach of obligations has persisted since the judgment which initially established
         it was delivered and the public and private interests involved. (23)
      
      49.      In the present case, in addition to the considerations set out in points 37 to 43 of this Opinion, account should be taken
         of the fact that the Hellenic Republic complied with the 2007 judgment during the present case.
      
      50.      Given all the considerations set out above, a sum of EUR 2 million seems appropriate to the circumstances of the case.
      
       Conclusion
      51.      Having regard to the foregoing considerations, I propose that the Court should:
      
      –        declare that, by having failed to take, on expiry of the period set for this purpose by the European Commission in the reasoned
         opinion, the measures necessary to comply with the judgment of 18 July 2007 in Case C‑26/07 Commission v Greece, the Hellenic Republic has failed to fulfil its obligations under Article 260(1) TFEU;
      
      –        order the Hellenic Republic to pay to the European Commission, into the account ‘European Union own resources’, a lump sum
         of EUR 2 million;
      
      –        order the Hellenic Republic to pay the costs.
      1 –	Original language: French.
      
      2 –	Judgment of 18 July 2007.
      
      3 –	OJ 2004 L 261, p. 15.
      
      4 –	Originally, the Commission also called for the imposition of a penalty payment. It has withdrawn this claim in view of
         the subsequent compliance by the Hellenic Republic with the 2007 judgment.
      
      5 –	It should be noted that the same claim had already been made in the Hellenic Republic’s defence dated 27 February 2007
         lodged in the proceedings leading up to the 2007 judgment.
      
      6 –	SEC(2005) 1658. According to paragraph 10 of this communication, the Commission will henceforth systematically propose
         that a defaulting Member State be ordered to pay a lump sum, and it will persist with such a request, and no longer withdraw
         its action, even where the Member State has rectified the situation after the bringing of the action before the Court and
         before delivery of the judgment pursuant to Article 228 EC.
      
      7 –	See Case C‑121/07 Commission v France [2008] ECR I‑9159, paragraph 22, and Case C-568/07 Commission v Greece [2009] ECR I‑4505, paragraph 24.
      
      8 –	At the date of the Commission’s decision to bring the present action, 25 June 2009, the amount of the lump sum stood at
         EUR 7 431 484.
      
      9 –	SEC(2010) 923.
      
      10 –	According to the 2010 communication, although the Commission would apply the updated figures to decisions to bring proceedings
         before the Court of Justice under Article 260 TFEU from ten working days after the date of adoption of the communication,
         once the Commission had revised the ‘n’ factor of the calculation, it would adapt its calculation to the new ‘n’ factor for
         cases brought before the Court in 2009 under Article 260 TFEU if the new ‘n’ factor was lower than the factor initially applied
         when the case was brought. This is the position in the present case.
      
      11 –	[2008] ECR I-1.
      
      12 –	See Case C-304/02 Commission v France [2005] ECR I‑6263, paragraph 81; Case C-121/07 Commission v France (cited in footnote 7), paragraph 58; and Case C-568/07 Commission v Greece (cited in footnote 7), paragraph 45.
      
      13 –	See Case C-568/07 Commission v Greece (cited in footnote 7), paragraph 42 and the case-law cited.
      
      14 –	Cited in footnote 7.
      
      15 –	See, to this effect, Case C-121/07 Commission v France (cited in footnote 7), paragraph 63, and Case C-369/07 Commission v Greece [2009] ECR I‑5703, paragraph 144.
      
      16 –	See, to this effect, Case C-121/07 Commission v France (cited in footnote 7), paragraph 62; Case C-568/07 Commission v Greece (cited in footnote 7), paragraph 44; Case C-109/08 Commission v Greece [2009] ECR I‑4657, paragraph 51; and Case C-369/07 Commission v Greece (cited in footnote 15), paragraph 144.
      
      17 –	See Case C-568/07 Commission v Greece (cited in footnote 7), paragraph 50 and the case-law cited.
      
      18 –	Article 18 of Directive 2004/80 provides that Member States are to bring into force the laws, regulations and administrative
         provisions necessary to comply with the directive by 1 January 2006 at the latest.
      
      19 –      Emphasis added.
      
      20 –	See, to this effect, Case C-121/07 Commission v France (cited in footnote 7), paragraph 64.
      
      21 –	To date, there have been five judgments: in Case C-304/02 Commission v France (cited in footnote 12), where the Court imposed a lump sum of EUR 20 million; in Case C-121/07 Commission v France (cited in footnote 7), where the Court imposed a lump sum of EUR 10 million; in Case C-568/07 Commission v Greece (cited in footnote 7), where the Court imposed a lump sum of EUR 1 million; in Case C-109/08 Commission v Greece (cited in footnote 16), where the Court imposed a lump sum of EUR 3 million; and in Case C-369/07 Commission v Greece (cited in footnote 15), where the Court imposed a lump sum of EUR 2 million.
      
      22 –	At the same time it should be noted that the Court has accepted that, for the purpose of calculating a penalty payment,
         the method consisting of multiplying a basic amount by an ‘n’ coefficient is an appropriate means of reflecting the ability
         to pay of the Member State concerned while keeping the variation between Member States within a reasonable range (Case C-369/07
         Commission v Greece (cited in footnote 15), paragraph 123 and the case-law cited).
      
      23 –	See Case C-369/07 Commission v Greece (cited in footnote 15), paragraphs 146 and 147 and the case-law cited.