Commission of the European Communities v Italian Republic.
Date: 1986-06-05
2 ACCORDING TO THE DOCUMENTS IN THE CASE ARTICLE 13 OF LAW NO 308 OF 29 MAY 1982 , PUBLISHED IN THE GAZZETTA UFFICIALE DELLA REPUBBLICA ITALIANA NO 154 OF 7 JUNE 1982 , PROVIDES FOR AN APPROPRIATION OF LIT 6 000 MILLION , CONSISTING OF LIT 2 000 MILLION FOR 1982 AND LIT 4 000 MILLION FOR 1983 , FOR GRANTS IN AID OF UP TO 20% OF THE COST OF VEHICLES AND FIXED INSTALLATIONS FOR UNDERTAKINGS OPERATING PUBLIC TRANSPORT SERVICES ON BEHALF OF THE LOCAL AUTHORITIES IN CITIES WITH A POPULATION OF OVER 300 000 IF THOSE UNDERTAKINGS BUY BATTERY ELECTRIC OR BI-MODE VEHICLES FOR URBAN SERVICE MANUFACTURED IN ITALY .
8 THE ITALIAN GOVERNMENT ' S ARGUMENT CANNOT BE ACCEPTED . IT SHOULD BE NOTED FIRST THAT THE REASONED OPINION WAS DELIVERED DURING THE PERIOD COVERED BY ARTICLE 13 OF LAW NO 308 AND THAT THE ITALIAN GOVERNMENT DID NOT ADOPT ANY MEASURES TO COMPLY WITH THAT OPINION WITHIN THE TIME-LIMIT . THE FACT THAT TIME ELAPSED BETWEEN THE END OF THE PERIOD DURING WHICH THE SAID LAW WAS IN FORCE AND THE BRINGING OF THIS ACTION CANNOT LEAD TO THE CONCLUSION THAT THE COMMISSION NO LONGER HAS A LIVE INTEREST IN BRINGING THE ACTION . ACCORDING TO THE JUDGMENT OF THE COURT OF 7 FEBRUARY 1973 ( CASE 39/72 COMMISSION V ITALIAN REPUBLIC ( 1973 ) ECR 101 ), THE SUBJECT-MATTER OF AN ACTION BROUGHT UNDER ARTICLE 169 IS ESTABLISHED BY THE COMMISSION ' S REASONED OPINION AND EVEN WHERE THE DEFAULT HAS BEEN REMEDIED AFTER THE PERIOD PRESCRIBED IN THE SECOND PARAGRAPH OF THAT SAME ARTICLE HAS ELAPSED , AN INTEREST STILL SUBSISTS IN PURSUING THE ACTION .
9 SECONDLY , IT IS NOT POSSIBLE TO CONCLUDE THAT LAW NO 308 HAS REMAINED A DEAD LETTER . THE ITALIAN GOVERNMENT INDICATES IN ITS REPLIES TO THE QUESTIONS PUT BY THE COURT THAT OF THE 11 APPLICATIONS RECEIVED FOR AID UNDER ARTICLE 13 OF LAW NO 308 , NINE WERE IN THE FORM OF MERE STATEMENTS OF AN INTENTION TO BUY VEHICLES AND WERE NOT FOLLOWED UP , AND THE TWO OTHERS MUST BE REGARDED AS ' SHELVED '  BECAUSE ALL THE DOCUMENTS NECESSARY FOR THE GRANTING OF AID WERE NOT SUPPLIED . HOWEVER , AT THE HEARING , THE ITALIAN GOVERNMENT WAS NOT ABLE TO EXCLUDE THE POSSIBILITY THAT ARTICLE 13 MIGHT STILL PRODUCE EFFECTS IN REGARD TO THE LATTER TWO APPLICATIONS , WHICH MAY NOT YET THEREFORE BE REGARDED AS REJECTED . UNDER THOSE CIRCUMSTANCES , IT CANNOT BE CONCLUDED THAT LAW NO 308 WILL PRODUCE NO EFFECTS AND THERE IS THUS NO LACK OF INTEREST FROM THAT POINT OF VIEW IN OBTAINING A DECLARATION THAT IT IS INCOMPATIBLE WITH THE TREATY . THE COURT HAS HELD THAT SUCH AN INTEREST MAY CONSIST IN ESTABLISHING THE BASIS FOR A LIABILITY WHICH A MEMBER STATE MAY INCUR , BY REASON OF ITS FAILURE TO FULFIL ITS OBLIGATIONS , TOWARDS THOSE TO WHOM RIGHTS ACCRUE AS A RESULT OF THAT FAILURE ( JUDGMENT OF 7 FEBRUARY 1973 , CITED ABOVE , AND JUDGMENT OF 20 FEBRUARY 1986 IN CASE 309/84 COMMISSION V ITALIAN REPUBLIC ( 1986 ) ECR 599 ).
18 THE FIRST ARGUMENT , WHICH ASSERTS ESSENTIALLY THAT THE NATIONAL MEASURE IN QUESTION IS OF RELATIVELY LIMITED ECONOMIC SIGNIFICANCE AND THEREFORE DOES NOT REALLY CONSTITUTE A HINDRANCE TO THE FREE MOVEMENT OF GOODS , CANNOT BE ACCEPTED . IT IS THE SETTLED CASE-LAW OF THE COURT THAT ALL TRADING RULES OF MEMBER STATES WHICH ARE CAPABLE OF HINDERING , DIRECTLY OR INDIRECTLY , ACTUALLY OR POTENTIALLY , INTRA-COMMUNITY TRADE MUST BE REGARDED AS MEASURES HAVING AN EFFECT EQUIVALENT TO A QUANTITATIVE RESTRICTION ON IMPORTS . EVEN IF ARTICLE 13 OF LAW NO 308 MAY BE REGARDED AS A MEASURE OF RELATIVELY MINOR ECONOMIC IMPORTANCE , WHICH IS NOT IN FACT THE CASE BECAUSE THE SUBSIDY REPRESENTS 20% OF THE PURCHASE PRICE OF A VEHICLE AND IS CAPABLE OF AFFECTING TRADE BETWEEN THE MEMBER STATES HAVING REGARD TO THE SUBSTANTIAL SUMS AVAILABLE , IT MUST NOT BE FORGOTTEN , AS THE COURT HAS SAID ON SEVERAL OCCASIONS , THAT A NATIONAL MEASURE DOES NOT FALL OUTSIDE THE SCOPE OF THE PROHIBITION IN ARTICLE 30 MERELY BECAUSE THE HINDRANCE TO IMPORTS WHICH IT CREATES IS SLIGHT AND BECAUSE IT IS POSSIBLE FOR IMPORTED PRODUCTS TO BE MARKETED IN OTHER WAYS ( JUDGMENT OF 5 APRIL 1984 IN JOINED CASES 177 AND 178/82 VAN DE HAAR AND ANOTHER ( 1984 ) ECR 1797 AND JUDGMENT OF 14 MARCH 1985 IN CASE 269/83 COMMISSION V FRENCH REPUBLIC ( 1985 ) ECR 837 ).
19 WITH REGARD TO THE QUESTION OF WHETHER THE SUBSIDIES PROVIDED FOR IN LAW NO 308 MAY BE REGARDED AS STATE AID WITHIN THE MEANING OF ARTICLE 92 OF THE TREATY , IT MUST BE POINTED OUT , IN THE FIRST PLACE , THAT THE MEASURE WAS NEVER NOTIFIED TO THE COMMISSION UNDER THAT ARTICLE . IN THE SECOND PLACE , AS THE COURT EMPHASIZED IN ITS JUDGMENT OF 7 MAY 1985 ( CASE 18/84 COMMISSION V FRENCH REPUBLIC ( 1985 ) ECR 1339 ), ARTICLE 92 MAY IN NO CASE BE USED TO FRUSTRATE THE RULES OF THE TREATY ON THE FREE MOVEMENT OF GOODS . THE COURT HAS CONSISTENTLY HELD THAT THE PROVISIONS RELATING TO THE FREE MOVEMENT OF GOODS AND THOSE RELATING TO STATE AID HAVE A COMMON PURPOSE , NAMELY TO ENSURE THE FREE MOVEMENT OF GOODS BETWEEN MEMBER STATES UNDER NORMAL CONDITIONS OF COMPETITION ( JUDGMENT OF 22 MARCH 1977 IN CASE 74/76 IANNELLI AND VOLPI V MERONI ( 1977 ) ECR 557 AND JUDGMENT OF 7 MAY 1985 , CITED ABOVE ). AS THE COURT ALSO MADE CLEAR IN THE LATTER JUDGMENT , THE FACT THAT A NATIONAL MEASURE MIGHT BE REGARDED AS AID WITHIN THE MEANING OF ARTICLE 92 IS THEREFORE NOT A SUFFICIENT REASON TO EXEMPT IT FROM THE PROHIBITION CONTAINED IN ARTICLE 30 . THE ITALIAN REPUBLIC ' S ARGUMENT BASED ON THE COMMUNITY RULES CONCERNING STATE AID CANNOT THEREFORE BE ACCEPTED .
22 WITH REGARD TO THAT POINT , IT SHOULD NOT BE FORGOTTEN THAT , ACCORDING TO SETTLED CASE-LAW , ARTICLE 36 OF THE TREATY MUST BE INTERPRETED STRICTLY , THE EXCEPTIONS THEREIN CONTAINED MAY NOT BE EXTENDED TO CASES OTHER THAN THOSE EXPRESSLY REFERRED TO AND , FURTHERMORE , THE ARTICLE REFERS TO NON-ECONOMIC MATTERS ( JUDGMENT OF 19 DECEMBER 1961 IN CASE 7/61 COMMISSION V ITALY ( 1961 ) ECR 317 AND JUDGMENT OF 7 FEBRUARY 1984 IN CASE 238/82 DUPHAR V NETHERLANDS ( 1984 ) ECR 523 ).
24 ON THE BASIS OF THE FOREGOING , AND IN ACCORDANCE WITH THE COURT ' S PREVIOUS DECISIONS , INCLUDING THE JUDGMENT OF 11 DECEMBER 1985 ( CASE 192/84 COMMISSION V HELLENIC REPUBLIC ( 1985 ) ECR 3967 ), IT APPEARS THAT THE ITALIAN PROVISION AT ISSUE , BY VIRTUE OF THE FACT THAT IT ENCOURAGES THE PURCHASE OF VEHICLES OF NATIONAL MANUFACTURE , MUST BE REGARDED AS A MEASURE HAVING AN EFFECT EQUIVALENT TO A QUANTITATIVE RESTRICTION ON IMPORTS , AND AS SUCH IS PROHIBITED BY ARTICLE 30 OF THE TREATY .