European Commission v Federal Republic of Germany.
Date: 2010-01-21
21. In accordance with settled case-law, it is for the Commission to judge at what time it will bring an action for failure to fulfil obligations; the considerations which determine its choice of time cannot affect the admissibility of the action (see, inter alia, Case C‑317/92 Commission  v Germany  [1994] ECR I‑2039, paragraph 4).
22. The rules of Article 226 EC must be applied and the Commission is not obliged to act within a specific period, save where the excessive duration of the pre-litigation procedure in that provision is capable of making it more difficult for the Member State concerned to refute the Commission’s arguments and of thus infringing the rights of the defence. It is for the Member State concerned to provide evidence that it has been so affected (see, inter alia, Case C‑490/04 Commission  v Germany  [2007] ECR I‑6095, paragraph 26).
25. Furthermore, the procedure for a declaration of a failure on the part of a Member State to fulfil its obligations is based on the objective finding that a Member State has failed to fulfil its obligations under Community law, and the principle of protection of legitimate expectations cannot, in a case such as the present, be relied on by a Member State in order to preclude an objective finding of a failure on its part to fulfil its obligations, since to admit that justification would run counter to the aim pursued by the procedure under Article 226 EC (see, inter alia, Case C‑523/04 Commission  v Netherlands  [2007] ECR I‑3267, paragraph 28).
26. It is apparent from the Court’s case-law that the fact that the Commission did not take further action on a reasoned opinion immediately or shortly after its issue cannot create, on the part of the Member State concerned, a legitimate expectation that the procedure has been closed (see, inter alia, Case C‑317/92 Commission  v Germany , paragraph 4). That is a fortiori  the position where, as in the present case, it is not in dispute that efforts were made during the alleged period of inactivity, inter alia in the context of the Europe Agreement referred to in paragraph 10 of this judgment, to find a solution which would put an end to the alleged infringement.
39. It is clear from settled case-law that the freedom to provide services implies, in particular, the abolition of any discrimination against a service provider on account of its nationality or the fact that it is established in a Member State other than that in which the service is provided (see, inter alia, C‑490/04 Commission  v Germany , paragraph 83 and the case-law cited). The requirement that an undertaking create a permanent establishment or branch in the Member State in which the services are provided runs directly counter to the freedom to provide services since it renders impossible the provision of services, in that Member State, by undertakings established in other Member States (see, to that effect, inter alia, Case 205/84 Commission  v Germany  [1986] ECR 3755, paragraph 52; Case C‑279/00 Commission  v Italy  [2002] ECR I‑1425, paragraph 17; and Case C‑496/01 Commission  v France  [2004] ECR I‑2351, paragraph 65).
42. In so far as the Federal Republic of Germany submits that the disputed administrative practice is justified by the fact that the provision in question is contained in a bilateral international agreement, it must be noted that, when giving effect to commitments assumed under international agreements, be it an agreement between Member States or an agreement between a Member State and one or more non-member countries, Member States are required, subject to the provisions of Article 307 EC, to comply with the obligations that Community law imposes on them (see, inter alia, Gottardo , paragraph 33).
43. The Court has, admittedly, held that disturbing the balance and reciprocity of a bilateral international agreement concluded between a Member State and a non-member country may constitute an objective justification for the refusal by a Member State party to that agreement to extend to nationals of other Member States the advantages which its own nationals derive from that agreement (see, inter alia, Case C‑307/97 Saint-Gobain ZN  [1999] ECR I‑6161, paragraph 60, and Gottardo , paragraph 36).
44. Nevertheless, contrary to the situations at issue in those cases and that which gave rise to the judgment in D. , on which the Federal Republic of Germany relies, application of the German-Polish Agreement concerns, since the accession of the Republic of Poland to the Union, two Member States, with the result that the provisions of that agreement can apply to relations between those Member States only in compliance with Community law, in particular with the Treaty rules on the free provision of services (see, by analogy, inter alia, Case 235/87 Matteucci  [1988] ECR 5589, paragraphs 16 and 19 to 21, and Case C‑478/07 Budĕjovický Budvar  [2009] ECR I‑0000, paragraphs 97 and 98).
47. Furthermore, it is apparent from the case-law of the Court that provisions such as those of the German-Polish Agreement here at issue will not be consistent with Community law unless they fall within an express derogating provision such as Article 46 EC, to which Article 55 EC refers (see, inter alia, Case C‑490/04 Commission  v Germany , paragraph 86).
48. It follows from Article 46 EC, which must be interpreted strictly, that discriminatory rules may be justified only on grounds of public policy, public security or public health (see, inter alia, Case C‑490/04 Commission  v Germany , paragraph 86).
49. None the less, recourse to such justification presupposes the existence of a genuine and sufficiently serious threat affecting one of the fundamental interests of society (see, to that effect, inter alia, Case C‑114/97 Commission  v Spain  [1998] ECR I‑6717, paragraph 46, and Case C‑567/07 Woningstichting Sint Servatius  [2009] ECR I‑0000, paragraph 28).
51. In so doing, the Federal Republic of Germany has failed to put forward any convincing argument which could be based on one of the grounds set out in Article 46 EC, since economic considerations and mere practical difficulties in the implementation of the German-Polish Agreement are not, in any event, sufficient to justify restrictions on a fundamental freedom (see, by analogy, inter alia, Case C‑18/95 Terhoeve  [1999] ECR I‑345, paragraph 45) or, a fortiori , a derogation under Article 46 EC, which presupposes the existence of a genuine and sufficiently serious threat affecting one of the fundamental interests of society.
66. That interpretation is confirmed by the purpose of such ‘standstill’ clauses, which prohibit generally the introduction of any new measure by a Member State having the object or effect of creating more restrictive conditions than those which applied before the date from which those clauses come into force (see, to that effect, inter alia, Savas , paragraph 69, and Case C‑242/06 Sahin  [2009] ECR I‑0000, paragraph 63).