CELEX: C1996/336/35
Language: en
Date: 1996-11-09 00:00:00
Title: Action brought on 16 September 1996 by the Federal Republic of Germany against the Commission of the European Communities (Case C-301/96)

No C 336/ 18              EN                   Official Journal of the European Communities                                      9 . 11 . 96
       produced in various Member States and is the subject of            Action brought on 16 September 1996 by the Federal
       significant intra-Community trade; the production                  Republic of Germany against the Commission of the
       volume has for some years been comparable to, if not                                  European Communities
       higher than , that in Greece; feta consumption primarily                                  ( Case C-301 /96 )
       involves feta produced outside Greece . Lastly, feta is
                                                                                                   ( 96/C 336/35 )
       subject to long-standing rules in several Member States,
       dating from before the introduction of the Greek rules,            An action against the Commission of the European
       and the name 'feta ' features in various Community acts            Communities was brought before the Court of Justice of the
       adopted since 1975 , without being reserved to a product           European Communities on 16 September 1996 by the
       of Greek origin .                                                  Federal Republic of Germany, represented by Ernst Roder,
                                                                          Ministerialrat in the Federal Ministry of the Economy
 ( ! ) Regulation ( EC ) No 1107/96 of 12 July 1996 on the registration   D-53107, and Thomas Oppermann , of the University of
       of geographical indications and designations of origin under the   Tubingen, acting as Agents .
       procedure laid down in Article 17 of Council Regulation ( EEC )
       No 2081 /92 ( OJ No L 148 , 21 . 6 . 1996 , p. 1 ).                The applicant claims that the Court should :
 ( 2 ) OJ No L 208 , 24 . 7. 1992 , p . 1 .
                                                                          — annul Article 2 of Decision COM(96 ) 1844 final of
                                                                              26 June 1996 concerning aid granted by Germany to the
                                                                              Volkswagen group for its Mosel and Chemnitz factories;
                                                                              furthermore, annul Article 1 of that decision to the
                                                                              extent that it limits the amounts declared to be
                                                                              compatible with the common market to DM 418,7
Reference for a preliminary ruling from the Schleswig­                        million for direct investment grants and DM 120,4
Holsteinisches Verwaltungsgericht by order of that court of                   million for investment premiums,
22 April 1996 in the case of Erika Reimer v. Amt fur Land­               — annul Article 3 ( 2 ) of Decision COM(96 ) 1844 final of
                  und Wasserwirtschaft Flensburg                              26 June 1996 in so far as it provides that the combined
                           ( Case C-300/96 )                                  effective aid intensity, expressed as gross grant
                             ( 96/C 336/34 )                                  equivalent, must not exceed 22,3 % for Mosel II or
                                                                              20,8 % for Chemnitz II, and
Reference has been made to the Court of Justice of the                   — order the defendant to pay the costs of the
European Communities by order of the Schleswig­                               proceedings .
Holsteinisches Verwaltungsgericht ( Schleswig-Holstein
                                                                          Pleas in law and main arguments adduced in support:
Administrative Court ) of 22 April 1996 , which was received
at the Court Registry on 16 September 1996 , for a                        Infringement of the Treaty and breach of essential
preliminary ruling in the case of Erika Reimer v. Amt fur                procedural requirements:
Land- und Wasserwirtschaft Flensburg on the following
questions :
                                                                         — the provision in Article 92 ( 2 ) ( c ) of the EC Treaty
                                                                              concerning the division of Germany is an exception by
                                                                              operation of law from the basic prohibition of aid
( a ) Is the second subparagraph of Article 9 ( 2 ) of                        contained in Article 92 ( 1 ), whereas the exceptions
        Commission Regulation ( EEC ) No 3887/92 of                           under Article 92 ( 3 ) are optional . In cases of aid falling
        23 December 1992 laying down detailed rules for                       under Article 92 ( 2 ), the procedure under Article 93 ( 3 )
        applying the integrated administration and control                    is confined to examining whether the factual criteria are
        system for certain Community aid schemes ( ] ) [as it                 met — namely, in the particular case of Article 92 ( 2 ) ( c ),
        stood before the entry into force of Commission
                                                                              whether there are disadvantages caused by division and
        Regulation ( EC ) No 1648/95 of 6 July 1995 amending                  whether aid is required to compensate for them . The
        Regulation ( EEC ) No 3887/92], which excludes a                      applicant alleges breach of the obligation to state
        farmer from any area-linked payment whatever where                    reasons laid down in Article 1 90 of the EC Treaty, in that
        the area actually determined for a particular crop is                 the Commission deliberately failed to deal with the
        found to be less than that declared in his aid application
                                                                              provision concerning division, and breach of the
        if the difference is more than 20% , even where the
                                                                              principle that action must not be unreasonable or
        discrepancy is not intentional or the result of serious               disproportionate, in that the Commission adopted the
        negligence but merely of minor negligence, compatible                 contested decision on the basis of Article 92 ( 3 ) ( c ) in
        with the principle of proportionality in Community                    accordance with the discretionary criteria of the
        law ?
                                                                              Community framework on State aid to the motor vehicle
                                                                              industry,
( b ) If not, how is the second subparagraph of Article 9 ( 2 )
        of Regulation ( EEC ) No 3887/92 [as it stood before the         — the contested decision is contrary to Article 92 ( 2 ) ( c ) of
        entry into force of Regulation ( EC ) No 1648/95 ] to be              the Treaty, relating to the division of Germany. General
        interpreted in such cases ?                                           principles of interpretation apply to that provision.
                                                                              Consequently, alongside the principle that factors giving
(!) OJ No L 391 , 31 . 12 . 1992 , p . 36 .
                                                                              rise to an exemption are to be construed narrowly,
                                                                              which the Commission has stated in formal terms, the
                                                                              principle that rules of Community law are to be
                                                                              interpreted meaningfully must in particular be observed;
 ---pagebreak--- 9 . 11 . 96                EN                     Official Journal of the European Communities                                  No C 336/ 19
     in accordance with generally accepted principles, the                       voted for, and limited to, reconstruction in the new
     interpretation called for in the strict framework of                        Lander,
     Article 92 ( 2 ) ( c ) is neither a narrow nor a liberal
                                                                             — the reasons given for the contested decision are
     interpretation but one which ensures the effectiveness of
                                                                                 contradictory in that the Commission on the one hand
     the provision .
                                                                                 assumes that the Volkswagen investments in question
     Since the reunification of Germany on 3 October 1990,                       were merely postponed, with its approval, in 1993 and
     the area to which Article 92 ( 2 ) ( c ) of the EC Treaty                   on the other hand claims that they constitute an
     applies has extended beyond the areas of the Federal                        extension of existing capacity,
     Republic affected by the division of Germany to cover                   — the Commission has inadequately assessed the relevant
     the whole of eastern Germany. Already when the                              facts and has in particular mistakenly considered that
     Saarland joined the Federal Republic in 1957 it was clear                   the restructuring measures for Mosel I/Chemnitz I were
     that the area in which the rule in that subparagraph                        temporary measures of employment policy pending the
     applied was extended to the region then joining the                         construction of the new Mosel II/Chemnitz II,
     Republic, in accordance with the principle of
     international law that treaties apply to States as their                — ( in the alternative :) in the context of its assessment of the
     frontiers exist for the time being. This was again                          aids under Article 92 ( 3 ) of the Treaty, the
     confirmed during the negotiations for the Maastricht                        Commission :
     Treaty on European Union; a proposal from the                               — dealt with aid granted on 22 March 1992 essentially
     Luxembourgish Presidency of the Council for an                                  on the basis of the Community framework on State
     amendment to the EEC Treaty in the autumn of 1991                               aid to the motor vehicle industry ( l ), even though
     initially no longer contained the provision in                                  that framework was to expire at the end of 1990 ,
     Article 92 ( 2 ) ( c ) of the EC Treaty . In 1992, furthermore,
     a provision worded identically to Article 92 ( 2 ) ( c ) of the             — ruled out, in formal terms, subparagraph ( b ) which
     EC Treaty was included in Article 61 ( 2 ) ( c ) of the EEA                     the German Government had, as a precaution , given
     Agreement; that would no longer have had any sense                              as a legal basis,
     unless the area of the nine new Federal Lander had also                     — did not apply subparagraph ( a ), even though the
     been meant .                                                                    conditions for its application were met,
     The contested aids for ' Mosel II/Chemnitz II ' are                         — unjustifiably and contrary to long-established
     required in order to compensate for the economic                                practice, regarded the Mosel II/Chemnitz II project
     disadvantages caused by the division of Germany in the                          as expansion investment and not as new
     motor vehicle region of Saxony . Unlike Article 92 ( 2 ) ( b ),                 investment,
      subparagraph ( c ) does not speak of aid to 'make good                     — made non-reconstructible calculations and failed to
      . . . damage' but — more flexibly — to 'compensate for'                        take the supporting documents submitted by
      disadvantages caused by division . Measures serving to                         Volkswagen into acount,
      reestablish comparable economic and social structures
      as between eastern and western Germany are measures                    — breach of the principle of the protection of legitimate
      which compensate within the meaning of                                     expectations by the Commission's surprising
      Article 92 ( 2 ) ( c ). The aim of that provision, which is to             ' about-turn' in no longer regarding Mosel II/Chemnitz II
                                                                                 as new investment but as expansion investment.
      compensate for disadvantages caused by division within
      Germany, is fundamentally different from that of                       (') OJ No C 123 , 18 . 5 . 1989 , p . 3 .
      facilitating the development of certain economic areas or
      activities, provided for in Article 92 ( 3 ). Compensation
      under Article 92 ( 2 ) (c ) involves overcoming, as rapidly
      and effectively as possible, the effects of division . The             Action brought on 16 September 1996 by the Commission
      aids referred to in Article 92 ( 3 ) ( a ) and ( c ), however, lie     of the European Communities against the Federal Republic
      within the different context of the policy of economic                                             of Germany
      and social cohesion within the Community under                                                 ( Case C-302/96 )
      Article 130a of the EC Treaty . That aim is pursued by the
      Community through its regional policy in the                                                     ( 96/C 336/36 )
      framework of Title XIV of the Treaty. The Community                    An action against the Federal Republic of Germany was
      has included eastern Germany in that policy as a                       brought before the Court of Justice of the European
       'Target 1 ' area . That does not, however, entail the                 Communities on 16 September 1996 by the Commission of
      withdrawal of the special development possibilities                    the European Communities, represented by Paul Nemitz, of
      which Germany uses to compensate as rapidly as                         the Commission's Legal Service, with an address for service
      possible, with its own resources and on the basis of the               in Luxembourg at the office of Carlos Gomez de la Cruz, of
       special provisions of Article 92 ( 2 ) ( c ) of the EC Treaty,        the Legal Service of the Commission, Wagner Centre 254,
       for the consequences of division.                                     Kirchberg.
      When examining under Article 93 of the Treaty whether                  The applicant claims that the Court should :
       aid falling under Article 92 ( 2 ) ( c ) is 'required', it must be
       borne in mind that the German legislation practically                 — declare that, by reason of the payment by the Free State
       precludes any misuse . The authorities may not award aid                   of Saxony to Volkswagen Sachsen GmbH and
       ' on the open market'; under the applicable German                         Volkswagen       Immobilienverwaltung           GmbH       of
       legislation , the purpose and amount of possible aids are                  investment aid for their investment projects in Mosel