CELEX: 62003CC0110
Language: en
Date: 2004-12-16 00:00:00
Title: Opinion of Mr Advocate General Ruiz-Jarabo Colomer delivered on 16 December 2004. # Kingdom of Belgium v Commission of the European Communities. # Action for anuulment - Regulation (EC) No 2204/2002 - Horizontal State aid - Aid for employment - Legal certainty - Subsidiarity - Proportionality - Coherence of Community action - Non-discrimination - Regulation (EC) No 994/98 - Objection of illegality. # Case C-110/03.

OPINION OF ADVOCATE GENERAL
      RUIZ-JARABO COLOMER
      delivered on 16 December 2004 (1)
      
      Case C-110/03
      Kingdom of Belgium
      v
      Commission of the European Communities
      (Action for annulment – Regulation (EC) No 2204/2002 – State aid for employment – Infringement of Regulation (EC) No 994/98 – Principle of legal certainty – Principle of subsidiarity – Principles of proportionality and consistency – Principle of non-discrimination – Legal basis)1.     The Kingdom of Belgium has applied to the Court of Justice for annulment of Commission Regulation (EC) No 2204/2002 of 5 December
         2002 on the application of Articles 87 and 88 of the EC Treaty to State aid for employment, (2) on the ground that it infringes not only Council Regulation (EC) No 994/98 of 7 May 1998 (3) but also the general Community law principles of legal certainty, subsidiarity, proportionality, consistency and non-discrimination,
         in addition to having been adopted on an incorrect legal basis. 
      
      I –  Legal background
      2.     In examining the grounds for contesting the regulation which are relied on in this action, it is important to set out the
         legislative background. This consists of three successive levels, namely the EC Treaty, Regulation No 994/98 and Regulation
         No 2204/2002.
      
      A –    The EC Treaty
      3.     In a Community which seeks harmonious and balanced development of economic activities, sustainable non-inflationary growth
         and a high degree of convergence and economic cohesion (Article 2 EC), competition is of primary importance in achieving those
         goals. It affects, first, the activities of the Community, which include a system ensuring that competition in the internal
         market is not distorted (Article 3(1)(g) EC) and, second, the economic policy of the Community and the Member States, which
         must be conducted in accordance with the principle of free competition (Article 4(1) EC). 
      
      4.     Title VI, Chapter 1 of the EC Treaty sets out the relevant rules, making a distinction between those applying to undertakings
         (Section 1) and those relating to aid granted by States (Section 2). The latter section contains three rules: 
      
      (1)      Article 87 EC:
      –       Article 87(1) states that any aid which affects trade between Member States and distorts competition or threatens to do so
         by favouring certain undertakings or the production of certain goods is incompatible with the common market. 
      
      There are two exceptions to that general rule, which are set out in the subsequent paragraphs of Article 87.
      –       Article 87(2) recognises that certain types of aid which are of a social character, are related to exceptional occurrences
         or are intended to benefit certain areas of Germany are acceptable by stating that, in all cases, such aid ‘shall be compatible’.
      
      –       Article 87(3) recognises other situations which ‘may be considered to be compatible’ where aid is intended to promote the
         economic development of areas where the standard of living is abnormally low or where there is serious underemployment or
         in other specifically defined circumstances. 
      
      (2)      Article 88 EC:
      –       Article 88(1) requires the Commission to review the Member States’ systems of aid.
      –       By virtue of Article 88(2), when the Commission finds that any such aid is not compatible with the common market, it must
         require the State to abolish or alter it and may refer the matter to the Court of Justice direct. In exceptional circumstances
         the Council may override the Commission’s decision. 
      
      –       Article 88(3) requires the Member States to inform the Commission of any plans to grant or alter aid so that, in the event
         that such aid distorts the common market, it may initiate the procedure laid down in Article 88(2). 
      
      (3)      Article 89 EC:
      –       This article allows the Council to make any appropriate regulations for the application of Articles 87 EC and 88 EC and, in
         particular, to determine the conditions in which Article 88(3) EC is to apply and the categories of aid exempted.
      
      B –    Regulation No 994/98
      5.     Acting under the powers conferred by Article 89 EC, the Council adopted Regulation No 994/98. Article 1 of that regulation
         provides that the Commission may, in areas where it has sufficient experience to define general criteria, declare that certain
         categories of State aid are consistent with the common market and exempt them from the notification requirements set out in
         Article 88(3) EC. (4)
      
      6.     The justification for this delegation of authority is that the assessment of compatibility with the common market essentially
         rests with the Commission (second recital), which has demonstrable experience in such matters (fourth recital), and that ‘group
         exemption regulations will increase transparency and legal certainty’, so that they can be directly applied by national courts
         (fifth recital).
      
      7.     However, the delegation is only partial, being subject to various conditions:
      (1)      Only the following categories are covered (Article 1(1)):
      (a)      aid in favour of small and medium-sized enterprises, research and development, environmental protection and employment and
         training;
      
      (b)      aid that complies with the map approved by the Commission for each Member State for the grant of regional aid. 
      (2)      The regulations comprise a compulsory and an optional element. Hence: 
      (a)      they must specify the purpose, beneficiaries, thresholds of aid intensities, conditions governing cumulation and conditions
         of monitoring (Article 1(2));
      
      (b)      in addition, they may, in particular, set thresholds or other special conditions in individual cases, exclude certain sectors
         and attach further conditions for the compatibility of exempted payments (Article 1(3)).
      
      (3)      Certain procedural rules, such as the hearing of interested parties (Article 6) and the consultation of the Advisory Committee
         set up for that purpose (Articles 7 and 8), must be complied with before the aid is approved. 
      
      (4)      The regulations are to have a limited period of validity, although this may be extended (Article 4(1) and (3)).
      (5)      Such regulations should be amended or repealed where circumstances have changed with respect to any important element that
         constituted grounds for their adoption or where the progressive development or the functioning of the common market so requires,
         although in that case the new regulation must set a period of adjustment of six months for the adjustment of aid payments
         governed by the previous regulation. 
      
      8.     Acting under the powers granted by Regulation No 994/98, the Commission adopted Regulations (EC) No 68/2001 and No 70/2001,
         both of 12 January 2001, on the application of Articles 87 EC and 88 EC to training aid and to State aid to small and medium-sized
         enterprises respectively. (5) It also adopted Regulation No 2204/2002 which is now being contested. 
      
      C –    Regulation No 2204/2002 
      9.     The scheme of Regulation No 2204/2002, excluding the reasons and explanations given in its preamble, can be analysed as follows:
      1.      Scope 
      10.   On the one hand, Article 1 provides that the regulation applies to three schemes, which constitute State aid within the meaning
         of Article 87(1) EC, provided that they promote, in any sector:
      
      (a)      the creation of employment,
      (b)      the recruitment of disadvantaged or disabled workers,
      (c)      covering the additional costs of employing disabled workers.
      11.   On the other hand, the following are excluded:
      –       aid to export-related activities [Article 1(3)(a)],
      –       aid contingent upon the use of domestic goods (Article 1(3)(b)), and
      –       the cases listed in Article 9, which include aid schemes targeted at particular sectors (Article 9(1)), aid granted to a single
         enterprise or establishment exceeding a gross aid amount of EUR 15 million over any three-year period (Article 9(2)), aid
         to maintain jobs (Article 9(5)) and aid for the conversion of temporary employment contracts into contracts of indeterminate
         duration (Article 9(6)). 
      
      2.      Definitions
      12.   As is the case in many Community acts, definitions are given of the terms used, such as ‘aid’, ‘small and medium-sized enterprises’,
         ‘gross’ and ‘net’ aid intensity, ‘number of employees’, ‘disadvantaged’ and ‘disabled’ worker, ‘sheltered employment’, ‘wage
         cost’, links to the ‘carrying out of a project of investment’ and investment in ‘tangible’ or ‘intangible’ assets.
      
      3.      Conditions
      a)      General conditions
      13.   Article 3 provides that for any type of aid scheme to be exempted from the notification requirements of the Treaty it must:
      –       fulfil all the conditions of the regulation, and 
      –       expressly refer to the regulation.
      14.   It should be noted that although there are specific provisions on cumulation, the ceilings for the different types of aid
         apply regardless of whether the support is financed entirely from State resources or is partly financed by the Community (Article
         8). 
      
      b)      Specific conditions
      15.   These are set out according to the objectives pursued, namely:
      –       those relating to the creation of employment, in Articles 4 and 7,
      –       those relating to the recruitment of disadvantaged and disabled workers, in Article 5, and
      –       those relating to the additional costs of employing disabled workers, in Article 6. 
      4.      Validity
      16.   Pursuant to Article 11, the regulation is to remain in force until 31 December 2006, although the following three transitional
         provisions apply: 
      
      –       Notifications pending at the time of entry into force of the regulation are to be assessed in accordance with the new provisions.
      –       Provided that they fulfil the conditions set out in the regulation, aid schemes which have already been implemented prior
         to the entry into force of the regulation and aid granted thereunder in breach of the obligation in Article 88(3) EC and in
         the absence of a Commission authorisation are exempted. 
      
      –       At the end of the period of validity of the regulation, exempted aid will remain exempted for a period of six months. 
      II –  Procedure before the Court of Justice 
      17.   On 10 March 2003 the Kingdom of Belgium lodged an application at the Registry of the Court of Justice, seeking the annulment
         of Regulation No 2204/2002 and a declaration that Regulation No 994/98 is inapplicable.
      
      18.   In its defence, the Commission of the European Communities contended that the Court should dismiss the application and order
         the applicant to pay the costs. 
      
      19.   Although the United Kingdom of Great Britain and Northern Ireland had sought, and been granted, leave to intervene in the
         proceedings, it waived its right to do so. 
      
      20.   Following the reply and the rejoinder the written procedure was closed without further formalities. 
      21.   The hearing requested by the applicant was held on 29 September 2004 and was also attended by the defendant. 
      III –  Analysis of the pleas in law
      22.   As the admissibility of the application is not in dispute, (6) the applicant’s pleas in law should be considered in the order in which they appear in the application, that is: (a) infringement
         of Regulation No 994/98, (b) breach of general principles of law, and (c) breach of the Treaty by reason of an incorrect choice
         of legal basis. 
      
      23.   However, since the applicant is asking for the whole of Regulation No 2204/2002 to be annulled and not just one of its provisions,
         and has described numerous hypothetical results of its practical application in the future, we should first remind ourselves
         of the structure of this type of action. 
      
      24.   According to the case-law, the Treaty established a system of legal remedies and procedures designed to permit the Court of
         Justice to review the legality of Community measures. (7) That function comprises, first, establishing legality in the limited sense of assessing the conformity of measures adopted
         by the institutions with the rules on which they are based. However, it also includes a secondary aspect of assessing constitutionality
         with a view to establishing whether general measures comply with the Treaties which, although legally in the form of international
         instruments, have been interpreted and applied as if they were a Community constitution. (8)
      
      25.   That is done mainly by means of three forms of action, namely the action for annulment, the action for failure to act and
         the objection of illegality. The reference for a preliminary ruling on legality also plays its part and is the final component
         of the system, while applications for compensation allow indirect review. (9)
      
      26.   The action for annulment was created with the dual aim of ensuring compliance by the institutions with Community law and safeguarding
         the rights of applicants (natural and legal persons, Member States and the institutions) vis-à-vis the institutions. (10)
      
      27.   Its scope is limited to acts adopted jointly by the European Parliament and the Council, acts of the Council, of the Commission
         and of the European Central Bank, other than recommendations and opinions, and of acts of the European Parliament ‘intended
         to produce legal effects vis-à-vis third parties’. (11) Furthermore, Article 237(b) and (c) EC contemplate the possibility of instituting proceedings for annulment against measures
         adopted by the Board of Governors and the Board of Directors of the European Investment Bank. (12)
      
      28.   The fact that locus standi is restricted is one of the main features of the action for annulment. Unlike the privileged applicants
         (the Member States, the European Parliament, the Commission and the Council), the Court of Auditors and the European Central
         Bank can only use that route to protect their prerogatives, (13) and legal and natural persons are only permitted to dispute decisions addressed to them or those that, although in the form
         of a regulation or a decision addressed to another person, are of direct and individual concern to them. (14)
      
      29.   The grounds on which an action can be brought are also limited. These are: lack of competence, infringement of an essential
         procedural requirement, infringement of the Treaty or of any rule of law relating to its application, and misuse of power.
         The first two refer to external legality and can be raised of the Court’s own motion, (15) while the last two concern internal legality and must be invoked by the applicant. The list is exhaustive (although infringement
         of the Treaty constitutes a general ground into which the others are subsumed), so that any other ground will fall outside
         the scope of the action unless it can be linked in with one of those listed, given that a strict classification is not necessary,
         provided that the infringement can be inferred from the application. (16) Nevertheless, it is worth taking into account the considerable measure of discretion enjoyed by the institutions in carrying
         out their activities. (17)
      
      30.   If the action is well founded, the Court of Justice declares the act concerned to be void (Article 231 EC), although the annulment
         may affect only some of its provisions if they are capable of being separated from the whole. In any event, in contrast to
         the case of an action for failure to fulfil an obligation, where it is only declaratory, the judgment in such an action has
         absolute effect as a final and conclusive decision in form and substance and as such seeks to recreate the legal position
         prior to its having been affected by the illegality of the Community measure.
      
      A –    Infringement of Regulation No 994/98
      31.   The Belgian Government includes two groups of arguments under this heading, claiming that Regulation No 2204/2002: (1) fails
         to guarantee the transparency and legal certainty required by the enabling provision in relation to aid for employment, and
         (2) makes the system in question stricter, thereby infringing the terms of the authority granted. 
      
      1.      Transparency and legal certainty
      a)      References in Regulation No 994/98
      32.   Belgium claims that the fifth recital in the preamble to Regulation No 994/98 requires exemption regulations to ‘increase
         transparency and legal certainty’ but that the regulation at issue is completely lacking in clarity in terms of both context
         and content. Furthermore, according to Belgium, it fails to satisfy the requirements of the second of the abovementioned principles
         which, in the context of State aid for employment, is of the utmost importance. 
      
      33.   The Commission, after first observing that the applicant is complaining of an infringement of a recital without identifying
         a substantive rule, maintains that, by making certain aid consistent with the common market, the regulation at issue has a
         positive effect. It also claims that, because it does so without affecting the Member States’ ability to make a prior notification,
         the regulation has no negative effects. Lastly, it denies the existence of any lack of clarity or breach of legal certainty.
         
      
      34.   Legislative provisions describe facts, situations or circumstances and attribute certain consequences to them. The factual
         situation and the legal result are therefore the two essential elements of a legal rule. (18) But the statement of legal grounds, preamble or introductory recitals, which merely seek to illustrate, give a basis for
         or explain, do not form part of these essential elements, since, although they accompany, and usually precede, the enacting
         terms of the measure, forming a physical part of it, they have no binding force, notwithstanding their usefulness as criteria
         for interpretation. 
      
      35.   The applicant’s argument focuses on the breach of two principles mentioned in the fifth recital in the preamble to the enabling
         regulation – that is to say, in a part of it which is not binding. Therefore, any failure to take them into account cannot
         entail the sanction of annulment. The reference in the preamble serves the purpose of explaining the objective by which the
         Council was guided in adopting the enabling measure.
      
      36.   However, both the principle of transparency and that of legal certainty must be respected by the legislature as sources of
         Community law, (19) and a failure to do so would, under Article 230 EC, (20) constitute an infringement, irrespective of whether they are referred to in the preamble to Regulation No 994/98. 
      
      37.   The Belgian Government’s arguments relating to transparency and legal certainty should therefore be seen as falling under
         the heading of infringement of Community legal principles, despite the fact that they have not been formally presented as
         such. 
      
      38.   That was also how the Commission interpreted them, and it formulated its arguments from that standpoint. 
      b)      Transparency
      39.   The applicant claims that there is a lack of clarity in two respects: (i) in terms of its legal context, and (ii) in terms
         of the provisions of the regulation. 
      
      i)      Lack of clarity of legal context 
      40.   In the applicant’s view, the scope of the regulation in question partially overlaps with that of the Guidelines on national
         regional aid, (21) the Multisectoral framework on regional aid for large investment projects (22) and Regulation No 70/2001. (23) That overlap could give rise to various conflicts and shows that the text is confused and inconsistent. 
      
      41.   It should be noted that, as a matter of law, such a conflict could only arise in respect of other legal provisions of equal
         rank, since the principle of the hierarchy of norms resolves conflicts which arise in relation to higher or lower-ranking
         provisions. Consequently, the abovementioned guidelines cannot be invoked even though the Court of Justice has acknowledged
         that they are binding on the Commission. (24)
      
      42.    In the case of Regulation No 70/2001 a clash cannot be ruled out since the various provisions do not apply to mutually exclusive
         fields. However, this situation can usually be resolved by looking to general principles relating to the application of laws
         over time, their specificity in terms of subject-matter and other relevant principles in the event that both sets of rules
         apply to any particular case. 
      
      43.   Lastly, the fact that the provisions of one regulation may contradict those of another does not mean that the first regulation
         can be treated as being unclear or incoherent, and certainly not in its totality. 
      
      ii)    Lack of clarity of the provisions of the regulation
      44.   Transparency is concerned with the quality of being clear, obvious and understandable without doubt or ambiguity. The application
         of this principle in the field of law is something of an aspiration, as the translation of the law into everyday life is not straightforward and does not always offer clear answers. 
      
      45.   Although the preciseness of a legal rule can be inferred from its wording, it is only when it comes to applying it that its
         degree of complexity becomes more apparent. Many factors are relevant, among which the extent of the discretion granted to
         the legislature is foremost. 
      
      46.   An examination of the applicant’s arguments relating to the lack of clarity of the contested regulation prompts two observations.
         The first is that the discrepancies in the manner in which the Community provisions are set out stem from the potential consequences
         of their application. Second, the applicant appears to be asking the Court to give an interpretative judgment in order to
         resolve doubts which the applicant has on a theoretical level. (25)
      
      47.   In this action, the annulment is sought of an entire regulation. However, as I have previously indicated, this form of action
         has a limited and very precisely defined scope, which would be exceeded if each and every one of the applicant’s complaints
         of inconsistency and ambiguity were to be addressed.
      
      48.   No evidence of the alleged confusion has been produced. (26) Only if, on a straightforward analysis, it can be established that the measure as a whole lacks clarity, is excessively obscure
         or meaningless, or is irreconcilable with other provisions would it be appropriate to declare it void. It would not be appropriate
         in a case such as this, where the allegation is based on conjecture, although the conclusion might be different in the case
         of implementing acts, which are also subject to judicial review. 
      
      49.   The allegation of lack of transparency should therefore be rejected. 
      c)      Legal certainty
      50.   One of the main grounds invoked for annulment of this measure is that it contravenes the principle of legal certainty. That
         principle is often linked with other general principles of law and given that, as I have noted above, it is not relevant to
         the delegation of authority, it is convenient to address this point at a later stage in the section dealing with the breach
         of such principles. 
      
      2.      Application of a stricter regime for aid
      51.   The applicant Government considers that adopting stricter rules for aid for employment goes beyond the authority given by
         the Council, which is limited to simply codifying existing practice. In that regard it points out the differences which, in
         its opinion, exist between the old and the new regimes. 
      
      52.   The defendant argues that the purpose of the enabling legislation was not only to reflect existing practice but also to keep
         open the possibility of introducing more rigorous requirements. It also emphasises that the applicant is not alleging a breach
         of any legal rule but only of the fourth recital in the preamble to Regulation No 994/98.
      
      53.   The legal context of the contested regulation explains why this plea should be rejected. 
      54.   The Treaty entrusts the task of ensuring that aid is compatible with the common market to the Commission and therefore requires
         the Member States to notify such aid to the Commission in advance. It also permits the Council to adopt rules for implementation
         of the system, as in the case where the Commission is authorised to adopt general provisions exempting from the prior notification
         requirement aid schemes which fulfil the compatibility criteria. 
      
      55.   The justification for granting that power to the Commission is that it has ‘considerable experience’, but it would not be
         correct to say that the Council authorised only codification of the existing regime and ruled out the possibility of any stricter
         regulation. Previous practice does not have to be documented in legal rules; it is sufficient if it is put to good use. It
         should be noted that the seventh recital in the preamble to the delegating regulation states that ‘it is appropriate to enable
         the Commission, when it adopts regulations exempting certain categories of aid from the obligation to notify … , to attach
         further detailed conditions to ensure … compatibility …’. Furthermore, in order to assess such compatibility it is necessary
         to apply general criteria to the facts of each particular case, taking into account the circumstances obtaining at that time,
         and practice may well change over time for good reason. 
      
      56.   None of the rules contained in Regulation No 994/98 prevents the Commission from adopting rules which differ from those previously
         applying or obliges it simply to carry out a redrafting exercise. That institution has a duty to monitor compliance and, in
         the same way as it can adopt guidelines at a given point in time, it can amend them or withdraw them at a later date, provided
         always that it respects the limits laid down by Community law. (27)
      
      57.   The objection relating to the absence of a transitional period for adjustment is also unfounded, since Article 11 of Regulation
         No 2204/2002 contains provisions on the matter, which one may disagree with but cannot ignore. (28)
      
      58.   A different question (and one which has not been raised in these proceedings) is whether the regulation adopted by the Commission
         on the basis of the enabling legislation complies with the general and specific conditions contained therein. (29)
      
      B –    Breach of general principles of law 
      1.      The principle of legal certainty 
      59.   The application contains repeated references to the principle of legal certainty, even though in terms of formal presentation
         the alleged infringement is linked to that of a recital in the preamble to Regulation No 994/98. I have covered this aspect
         earlier and explained the need to examine this complaint individually at the same time as those relating to the general principles
         of Community law. 
      
      60.   First, it should be noted that Regulation No 2204/2002 does not detract from legal certainty, according to the defendant’s
         understanding, (30) since that principle, which is of very wide scope in so far as it encapsulates other principles, assumes the existence of
         a reasonably founded expectation concerning the behaviour of the Community institutions in applying the law. The statement
         in the fifth recital in the preamble to the enabling provision that ‘exemption regulations will increase transparency and
         legal certainty’ should therefore be understood in that light since it implies that, by means of the regulations adopted by
         the Commission on the basis of the authority given, the Member States are made aware of the requirements for the exemption
         from the obligation of prior notification of proposed State aid. 
      
      61.   The contested regulation seeks to satisfy the demands of legal certainty by clearly setting out the conditions of compatibility
         required by the institution to which the Treaty entrusts the duty of supervision. However, it is only possible to assess in
         a general, theoretical way the greater or lesser extent to which that aim has been achieved when it is apparent from an overall
         view of its provisions that there is clearly some uncertainty. 
      
      62.   Uncertainty is not the impression which emerges on a close examination of the content of the disputed regulation, which describes
         its scope in both positive and negative terms, defines the concepts used, sets out the conditions for exemption and the particular
         conditions applying to each type of aid scheme and includes rules on cumulation, transparency, monitoring and period of validity. (31)
      
      63.   The charge of uncertainty is further weakened because, under the Treaty system, the requirement to notify is a general rule,
         whereas exemption is more limited and is consequently subject to stricter interpretation. Therefore, should any doubt about
         its scope arise, the basic rule applies. In any event the regulation is not intended to govern the whole field but only to
         apply to particular areas.
      
      2.      The principle of subsidiarity
      64.   Although formally the applicant State refers to a breach of the principle of subsidiarity, in the relevant part of its submissions
         it mentions the principles of legal certainty and proportionality. These will be examined separately and in this section I
         will deal with subsidiarity, which affects the constitutional arrangements of the Member States, as is the case with Belgium,
         where matters of employment fall exclusively within the competence of the regions. It is claimed that the exemption from the
         notification requirements is ineffective because it fails to take that fact into account. 
      
      65.   In the Commission’s view, the principle of subsidiarity is meaningless in this case. 
      66.   The second paragraph of Article 5 EC embodies the principle of subsidiarity and limits it to those areas that are not allocated
         to the exclusive competence of the Community. (32)
      
      67.   The legal context of Regulation No 2204/2002 shows that it is concerned with an area whose regulation has been entrusted to
         the Community alone because of the way in which State aid is monitored in order to assess its compatibility with the common
         market. (33)
      
      68.   Consequently, the principle of subsidiarity is both irrelevant and inapplicable in this case and therefore cannot be said
         to have been breached. 
      
      3.      The principles of proportionality and consistency
      a)      The principle of proportionality
      69.   According to the applicant, the contested regulation gives rise to a state of uncertainty. Furthermore, the fact that Article
         2(f) contains an exhaustive list of the categories of disadvantaged workers means that the regional circumstances and social
         policy of the Member States cannot be taken into account. This, taken together with the possibility of having to notify the
         Commission of measures promoting employment of types other than those mentioned in that provision, is disproportionate having
         regard to the objective of reducing unemployment. 
      
      70.   The Commission underlines the importance of the context of the regulation and maintains that the requirement of prior notification
         of aid not covered by the regulation stems from the Treaty. 
      
      71.   According to the case-law, the principle of proportionality requires that the means employed by a Community provision be appropriate
         to attain the objective pursued and must not go beyond what is necessary to achieve it. (34) Proportionality therefore suggests an accord and a harmony between the aim pursued and the measures adopted to achieve it.
         
      
      72.   However, that relationship is undermined unless it is analysed bearing in mind the true purpose of the regulation. The Belgian
         Government has not followed this logic in formulating its pleas for annulment since, although promoting employment is of vital
         importance in the economic and social policy of both the Community and its Member States (it is even mentioned in the sixth
         recital in the preamble to Regulation No 2204/2002), it does not have the same status in relation to the disputed measure,
         although it has a bearing on it. The regulation was adopted under the authority given by the Council to the Commission for
         the purposes – and I emphasise this – of assisting in the application of Articles 87 EC and 88 EC. 
      
      73.   Furthermore, in an area which, as indicated above, falls exclusively within the competence of the Community, the legislature
         must be allowed wide discretionary powers so that only if the measures adopted are manifestly inappropriate having regard
         to the objective sought could their legality be affected. (35) That is not the case here, and any defects which came to light as a result of the application of the rules would not affect
         their proportionality. (36)
      
      74.   The applicant State’s claim that the principle of proportionality has been infringed should therefore be rejected. 
      b)      The principle of consistency
      75.   In the applicant’s view, the principle of consistency of Community acts has been infringed because the ability of Member States
         to formulate a real employment policy has been restricted. 
      
      76.   The defendant, on the other hand, after again expounding the meaning of the contested provision, maintains that as part of
         the broad discretion which the Community institutions enjoy in developing common policies, established case-law has recognised
         that the institutions have the power to bring into harmony different Community objectives.
      
      77.   In examining this plea, the context of the contested regulation should be emphasised. Thus, as a general rule, payments made
         by Member States which distort or threaten to distort competition are declared to be incompatible with the common market,
         although in certain circumstances they may be considered compatible. In any event the Commission must be notified of proposed
         schemes to grant or amend such aid so that it can decide whether or not they are compatible. In the interests of facilitating
         that task, the Council empowered the Commission to list the conditions upon which certain aid, including that relating to
         ‘employment and training’, would be exempted from prior notification, provided that certain requirements were met (Regulation
         No 994/98, Article 1(1)).
      
      78.   The requirement of prior notification derives, therefore, not from the contested measure but, as the Commission points out,
         from the Treaty itself. The contested regulation sets out, in accordance with the powers conferred, the conditions for the
         exemption of certain aid schemes from the notification requirement. 
      
      79.   The employment policies of the Member States are not directly affected by the disputed Community measure, which operates in
         a different area. 
      
      4.      The principle of non-discrimination 
      80.   The Belgian Government takes the view that maintaining the aid schemes previously authorised but introducing a stricter system
         for new schemes breaches the principle of non-discrimination as between undertakings which received aid prior to the entry
         in force of the regulation and those applying for it afterwards. 
      
      81.   In that respect the defendant points out that, in accordance with its legal basis, the regulation seeks only to remove the
         prior notification requirement in respect of aid which satisfies the conditions set out. It does nothing more, since, if it
         had cancelled aid previously authorised or made it subject to the currently applicable regime, it would have infringed Regulation
         No 994/98 as well as the Treaty itself. 
      
      82.   The case-law established long ago that the Community legislature is in breach of the non-discrimination rule if it treats
         comparable situations differently (37) or different situations in a similar manner, (38) unless the difference is objectively justified. (39)
      
      83.   In these proceedings, it is the opinion of the applicant State that the change in legal regime would lead to inequality. However
         that is just an objective explanation of the different effects brought about. If the argument of the Kingdom of Belgium were
         to be followed through, this would lead to the legal system becoming paralysed and obsolete because no new measures different
         from those previously in force would ever be passed. The impact on the regulation of other general principles of law such
         as non-retroactivity, respect for acquired rights, the protection of legitimate expectations or those mentioned above, particularly
         that of legal certainty, is another question.
      
      84.   The difference in treatment complained of does not therefore appear unjustified. 
      C –    Incorrect choice of legal basis
      85.   The final plea in law which Belgium puts forward relies on Article 241 EC. It argues that the addition by the Treaty of Amsterdam
         of paragraph 3 to Article 137 EC entrusts the Council with the task of adopting, on a unanimous basis, measures in the area
         of ‘financial contributions for promotion of employment and job creation’, and that this has the effect of excluding all Commission
         competence in that area. That amendment means that Regulation No 994/98 ceased to be the correct legal basis for Regulation
         No 2204/2002, as the authorisation given therein breaches the abovementioned Treaty rule, in its amended form. 
      
      86.   The Commission contends that Article 137(3) EC became law after the entry into force of Regulation No 994/98 and does not
         have retroactive effect. Furthermore, according to its understanding, that Treaty rule is not applicable to these proceedings.
         
      
      87.   There is no alternative but to accept that analysis in its entirety. 
      88.   The Court of Justice has held that the choice of legal basis for a measure must be based on objective factors which are amenable
         to judicial review, such as the aim and content of the measure. (40) If there are several aims then regard must be had to the main aim. (41)
      
      89.   Achieving a high level of employment is a fundamental objective of the Community (Article 2 EC), which the coordination between
         the policies of the Member States in this area must promote (Article 3(1)(i) EC). The Member States also regard that area
         as a matter of great concern and introduce economic measures to try to achieve that objective. 
      
      90.    The granting of this type of aid affects the operation of the common market and distorts competition. (42) The system therefore provides for various means of regulation, which no doubt do affect employment, amongst which is Regulation
         No 994/98, on which the contested regulation is based. The legal basis of that regulation is not Article 137 EC or any other
         Article in Title XI of the EC Treaty (social policy, education, vocational training and youth) or in Title VIII (employment),
         but Article 89 EC, which is part of Title VI (competition, taxation and approximation of laws). That is the correct choice
         of legal basis because its main objective is the application of Articles 87 EC and 88 EC, even though, I repeat, it does affect
         employment. 
      
      91.   It should be noted, moreover, that the enabling regulation also covers other types of aid, such as aid for small and medium-sized
         enterprises, for research and development and for the protection of the environment (Article 1(1)), so that, if the Kingdom
         of Belgium’s argument were accepted, the enabling regulation would have to have as its legal basis all the Treaty provisions
         allowing the Community to act in those areas. 
      
      92.   Consequently, Article 137 EC is not helpful in this case. There is no breach of Community law resulting from Regulation No
         2204/2002 being legally founded on the Treaty provisions on competition since its fundamental aim is to simplify the procedure
         provided for in Article 88(3) EC by means of the authorisation given by the Council to the Commission. 
      
      IV –  Costs
      93.   In accordance with Article 69(2) of the Rules of Procedure, the applicant, having been unsuccessful, should be ordered to
         pay the costs. 
      
      V –  Conclusion
      94.   In accordance with the foregoing analysis, I propose that the Court: 
      (1)      Dismiss the action for annulment brought by the Kingdom of Belgium against Commission Regulation (EC) No 2204/2002 of 5 December
         2002 on the application of Articles 87 EC and 88 EC to State aid for employment;
      
      (2)      Order the Kingdom of Belgium to pay the costs. 
      1 –	 Original language: Spanish.
      
      2  –	OJ 2002 L 337, p. 3. Corrigendum OJ 2002 L 349, p. 126.
      
      3  –	On the application of Articles 92 and 93 of the Treaty establishing the European Community (now, after amendment, Articles
         87 EC and 88 EC) to certain categories of horizontal State aid (OJ 1998 L 142, p. 1).
      
      4  –	Article 2 enables the Commission to adopt regulations, stating that ‘having regard to the development and functioning
         of the common market, certain aids do not meet all the criteria of Article 87(1) and that they are therefore exempted from
         the notification procedure provided for in Article 88(3), provided that [they do] not exceed a certain fixed amount’. That
         was the legal basis for Commission Regulation (EC) No 69/2001 of 12 January 2001 on so-called de minimis aid (OJ 2001 L 10, p. 30).
      
      5  –	OJ 2001 L 10, pp. 20 and 33 respectively.
      
      6  –	The pleadings of both the Belgian Government and the Commission nevertheless address the issue of admissibility on a number
         of occasions. This argument was not formally put forward and does not arise out of the proceedings because (although this
         was disputed) the fact that no objections were raised when Regulation No 2204/2002 was adopted does not mean that it cannot
         be challenged subsequently, provided that the time-limits and other conditions are observed. In this regard, Case 166/78 Italy v Council [1979] ECR 2575, cited in the reply, should be mentioned. In that judgment it was stated that ‘the first paragraph of Article
         173 of the EEC Treaty [now, after amendment, Article 230 EC] confers on every Member State the right to challenge, by an application
         for annulment, the legality of every Council regulation, without the exercise of this right being conditional upon the positions
         taken up by the representatives of the Member States of which the Council is composed when the regulation in question was
         adopted’.
      
      7  –	Case 294/83 Les Verts v Parliament [1986] ECR 1339. Along similar lines is Case C‑50/00 P Unión de Pequeños Agricultores v Council [2002] ECR I‑6677.
      
      8  –	Rodríguez Iglesias, G.C., ‘El Tribunal de Justicia de las Comunidades Europeas’, in El derecho comunitario europeo y su aplicación judicial, Civitas, Madrid, 1993, p. 384.
      
      9  –	Liñán Nogueras, D., and Mangas Martín, A., Instituciones y Derecho de la Unión Europea, 4th edition, Tecnos, Madrid, 2004, p. 459.
      
      10  –	As I stated in my Opinion in Case C‑315/99 P Ismeri Europa v Court of Auditors [2001] ECR I‑5281. See also Waelbroeck, M., and Waelbroeck, D., ‘Article 173’, in Louis, J.-V., Vandersanden, G., Waelbroeck,
         D., and Waelbroeck, M., Commentaire Mégret: Le droit de la Communauté Économique Européenne, vol. 10 (La Cour de Justice. Les actes des institutions), Éditions de l’Université de Bruxelles, Brussels 1993, p. 98, and Vandersanden, G. and Barav, A., Contentieux communautaire, Bruylant, Brussels 1977, p. 127.
      
      11  –	Liñán Nogueras, D., and Mangas Martín, A., op. cit., p. 460.
      
      12  –	Castillejo Manzanares, R., ‘El recurso de anulación’, in Mariño, F., Moreno Catena, V. and Moreiro, C. (eds.), Derecho procesal comunitario, Tirant lo Blanch, Valencia 2001, p. 151.
      
      13  –	Restricting locus standi according to the objective sought by the proceedings is not unusual in the legal world. One example
         can be found in the 1985 European Charter of Local Self-Government which requires local authorities to have available to them
         a mechanism specifically safeguarding local autonomy in the context of the territorial distribution of State powers. In the
         case of Spain this has meant granting provinces and municipalities the right to bring disputes relating to legislative provisions
         which have the rank of national or regional law before the Tribunal Constitucional (Constitutional Court) if they consider
         that such provisions have an adverse effect on local autonomy (Article 75a(1) of Ley Orgánica 2/1979 del Tribunal Constitucional
         of 3 October (Organic Law 2/1979 on the Constitutional Court)). This procedural mechanism can be used only for safeguarding
         such autonomy. 
      
      14  –	The locus standi of individuals to bring an action for annulment has given rise to restrictive case-law of the Court of
         Justice, which has been the subject of much criticism on the part of commentators (for example, Sarmiento, D., ‘La sentencia
         UPA (C‑50/2000), los particulares y el activismo inactivo del Tribunal de Justicia’, in Civitas, Revista Española de Derecho Europeo, no. 3, July-September 2002, pp. 531 to 577; see also Ortega, M., El acceso de los particulares a la justicia comunitaria, Ariel Practicum, Barcelona 1999, particularly chapter 6, ‘Hacia una mejora del sistema de protección jurisdiccional de los
         particulares’ (Towards an improved system of legal protection for individuals). In his Opinion in Unión de Pequeños Agricultores v Council, cited, Advocate General Jacobs suggested a broad interpretation which recognises that ‘an applicant is individually concerned
         by a Community measure where the measure has, or is liable to have, a substantial adverse effect on his interests’ (point
         102(4)). The Treaty establishing a Constitution for Europe adopts a position consistent with this broader approach in that
         Article III‑365(4) sets out two alternatives by allowing any natural or legal person to challenge ‘an act addressed to that
         person or which is of direct and individual concern to him or her’ and also ‘a regulatory act which is of direct concern to
         him or her and which does not entail implementing measures’.
      
      15  –	For example, the judgment in Case 19/58 Germany v High Authority of the ECSC [1960] ECR 225 noted, in relation to lack of competence, that, although it was true that that ground had not been formally
         set out in the application or in the reply, it was appropriate to examine it. 
      
      16  –	Case 4/73 Nold v Commission [1974] ECR 491.
      
      17  –	Case 57/72 Westzucker [1973] ECR 321 and Case 55/75 Balkan-Import-Export [1976] ECR 19. See also Bernad, M., Salinas, S., and Tirado, C., Instituciones y Derecho de la Unión Europea, Realizaciones, Informes y Ediciones Europa, Zaragoza 2003, p. 402.
      
      18  –	Guasp, J., Derecho (no publisher), Madrid 1971, p. 7 et seq., defines law as the sum of the relationships between human beings which a society
         deems necessary, and identifies the two factors that encapsulate the essence of this concept, namely the substance, comprising
         the relationships between human beings, and the form, which is the necessity for such relationships. 
      
      19  –	On the other hand, Case C-150/94 United Kingdom v Council [1998] ECR I‑7235, paragraph 37, suggests that general principles must be respected even if they are not referred to in the
         preamble. 
      
      20  –	Case 112/77 Töpfer v Commission [1978] ECR 1019, paragraph 19.   
      
      21  –	OJ 1998 C 74, p. 9.
      
      22  –	OJ 2002 C 70, p. 8 (not OJ 2000 as mistakenly stated in footnote 24 of the application). 
      
      23  –	Referred to at point 8 of this Opinion.
      
      24  –	Case C‑313/90 CIRFS and Others v Commission [1993] ECR I‑1125, paragraph 35, and Case C‑311/94 Ĳssel-Vliet [1996] ECR I‑5023, paragraph 42.
      
      25  –	It is a case of seeking to solve the problem before it arises, and overlooking the fact that if difficulties occur there
         are several remedies available, such as disapplication, contesting the implementing acts or seeking amendment of the regulation
         or a preliminary ruling on interpretation. 
      
      26  –	The European Parliament reached the same conclusion in its resolution on the draft Commission Regulation (OJ 2003 C 272,
         p. E/405), taking the view that the proposed text ‘substantially improves administrative transparency and also makes it easier
         to monitor the criteria laid down ...’ (paragraph 2).
      
      27  –	By way of example, the Commission communication concerning the guidelines on State aid for employment (2000/C 371/05,
         OJ 2000 C 371, p. 12) states that such schemes will continue to be assessed ‘against the criteria set out in the existing
         guidelines, which will therefore remain in force, until the entry into force of revised guidelines on aid for employment or
         of an exemption regulation on aid for employment’.
      
      28  –	See point 16 of this Opinion.
      
      29  –	See point 7 of this Opinion.
      
      30  –	The European Parliament took the same view, stating its opinion in the resolution on the draft regulation referred to
         in footnote 26 that the proposal established a ‘coherent system for authorising aid, ... encouraging the principle of legal
         certainty’ (paragraph 3).
      
      31  –	See points 9 to 16 of this Opinion.
      
      32  –	This idea is reiterated in point 3 of the Protocol on the application of the principles of subsidiarity and proportionality
         annexed to the Treaty establishing the European Community.
      
      33  –	Without prejudice to the option granted to Member States in the third subparagraph of Article 88(2), to apply to the Council
         for a declaration that aid is compatible with the common market if exceptional circumstances justify it. 
      
      34  –	Case 122/78 Buitoni [1979] ECR 677, paragraph 16; Case 137/85 Maizena [1987] ECR 4587, paragraph 15; Case C‑491/01 British American Tobacco (Investments) and Imperial Tobacco [2002] ECR I‑11453, paragraph 122; and Case C‑15/00 Commission v EIB [2003] ECR I‑7281, paragraph 161.
      
      35  –	In this regard see British American Tobacco (Investments) and Imperial Tobacco, paragraph 123, and Commission v EIB, paragraph 162.
      
      36  –	Commission v EIB, paragraph 165.
      
      37  –	Amongst the first cases was Case 6/71 Rheinmühlen Düsseldorf [1971] ECR 823.
      
      38  –	Case 147/79 Hochstrass v Court of Justice [1980] ECR 3005 and subsequent cases.
      
      39  –	Case 245/81 Edeka [1982] ECR 2745, amongst others.
      
      40  –	Case C‑300/89 Commission v Council [1991] ECR I‑2867, paragraph 10.
      
      41  –	Case C‑377/98 Netherlands v Parliament and Council [2001] ECR I‑7079, paragraph 27.
      
      42  –	See points 3 and 4 of this Opinion.