Italian Republic v Council of the European Union.
Date: 2002-03-14
42 Whilst the protection of legitimate expectations is one of the fundamental principles of the Community, economic operators cannot have a legitimate expectation that an existing situation which is capable of being altered by the Community institutions in the exercise of their discretionary power will be maintained; this is particularly true in an area such as the common organisation of the markets, which involves constant adjustments to meet changes in the economic situation (Joined Cases C-133/93, C-300/93 and C-362/93 Crispoltoni and Others [1994] ECR I-4863, paragraph 57, and Pontillo, cited above, paragraph 22).
56 As the Italian Government points out, the third recital in the preamble to Regulation No 1361/98 does indeed show that the Council formed the view that Italy could no longer be classified as a deficit area for the 1998/99 marketing year.
57 Whilst such reasoning may appear open to criticism on account of its extremely succinct nature, it cannot be regarded as failing to comply with the obligation to provide a statement of reasons as laid down by Article 190 of the Treaty and interpreted by settled case-law.
58 As is apparent from paragraph 38 of the judgment of 6 July 2000 and the case-law cited therein, the statement of reasons must be appropriate to the nature of the measure in question and must show clearly and unequivocally the reasoning of the institution which adopted the contested measure so as to inform the persons concerned of the justification for the measure adopted and to enable the Court to exercise its powers of review.
59 In defining the scope of the obligation laid down in Article 190 of the Treaty, the Court has held that the statement of the reasons on which regulations are based is not required to specify the often very numerous and complex matters of fact or of law dealt with in those regulations, provided that the latter fall within the general scheme of the body of measures of which they form part (see, in particular, paragraph 40 of the judgment of 6 July 2000). It has also held that the question whether a statement of reasons meets the requirements of Article 190 must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see, in particular, paragraph 41 of the judgment of 6 July 2000).
60 It is apparent from the set of rules of which Regulation No 1361/98 forms part, and from the economic context in which that regulation was adopted, including in particular the developments which have occurred in the sugar market during recent marketing years, that neither the Italian Government nor economic operators in the sugar sector could have been unaware of the reasons for classifying Italy as a non-deficit area.
61 The Italian Government, as a member of the Management Committee for Sugar, and pursuant to its obligation under Commission Regulation (EC) No 779/96 of 29 April 1996 laying down detailed rules for the application of Regulation No 1785/81 as regards communications in the sugar sector (OJ 1996 L 106, p. 9) to notify at regular intervals figures concerning both current production and actual consumption, was closely associated with the process of evaluating the ratio between production volumes not yet harvested and consumption not yet commenced. Moreover, it is apparent from the detailed description of that process given by the Council in the proceedings culminating in the judgment of 6 July 2000 that the sugar market operators, that is to say the sugar manufacturers and beet producers, took part in that process through the intermediary of their representatives. Thus, they were also aware of the assessments carried out with a view to fixing the intervention prices and minimum prices for the 1998/99 marketing year.
62 In addition, neither the Italian Government nor the beet producers could have been unaware of the way in which the sugar market had developed during the course of the 1990s. As is clear from paragraph 67 of the judgment of 6 July 2000, those developments were characterised, in particular, by a slow but constant fall in consumption.
63 It follows from the foregoing that, in the context of the set of rules in issue and the way in which the market concerned has developed, the statement of reasons given in Regulation No 1361/98 for the classification of Italy as a non-deficit area for the 1998/99 marketing year, whilst very succinct, sufficiently fulfils the requirements laid down in the Court's case-law regarding the statement of reasons.
The complaint alleging the absence of a statement of reasons for a change in forecasting method
Arguments of the parties
71 As a preliminary point, it must be stated that, had there been a change in the method used to assess future production and consumption, Regulations Nos 1360/98 and 1361/98 would not have contained an adequate statement of reasons clearly and unequivocally informing the Italian authorities and economic operators of the justification for classifying Italy as a non-deficit Member State and enabling the Community judicature to exercise its powers of review.
72 However, the Italian Government has not proved to the requisite legal standard the existence of such a change of method.
73 It is not in dispute that, for the 1998/99 marketing year, the method used by the Commission and the Council to assess Italy's future situation consisted in comparing available production, made up of the foreseeable quantities of A sugar and B sugar, plus any C sugar carried forward, with foreseeable consumption. Thus, in order to show that a change of method had occurred for the 1998/99 marketing year, the Italian Government would have had to prove that the Commission and the Council had used another method for the previous years.
74 According to the Italian Government, proof that another method was used emerges either from the regime applicable before the introduction of Regulation No 1785/81 or from the marketing-year regulations adopted prior to that regulation. The method in question was based on the quantity of unrefined sugar imported less exports.
75 First, the fixing of a derived intervention price was not governed, prior to the entry into force of Regulation No 1785/81, by the same rules as those applicable thereafter, particularly at the time of the 1998/99 marketing year.
76 Second, in relation to the two years before the 1998/99 marketing year, it is quite clear from the judgment of 6 July 2000, as regards the 1996/97 marketing year, and from the judgment of 12 March 2002 in Case C-160/98 Eridania [2002] ECR I-2533, as regards the 1997/98 marketing year, that the Commission and the Council used the same method of assessment as that used by them for the marketing year at issue in the present case, by establishing the ratio between the estimated production and consumption for the coming marketing year. According to paragraph 46 of the judgment of 6 July 2000 and point 14 in the Opinion of Advocate General Mischo in Case C-160/98, there is a deficit within the meaning of Regulation No 1785/81 where the total available production falls short of consumption. It is on that basis that the Commission and the Council assessed the foreseeable situation in Italy for each of the 1996/97 and 1997/98 marketing years and that the Court and Advocate General Mischo considered whether those assessments had been properly carried out.
77 Furthermore, the Italian Government raised no protest at the time and did not even express any reservations concerning the method used, of which it was well aware on account of its close collaboration with the Commission in the context of the sugar COM.
78 Consequently, the plea that no statement of reasons was given for the alleged change in the method of assessment cannot be accepted.
The plea alleging breach of the principle of equal treatment
Arguments of the parties